Selling a lot on Amazon does not mean making money. Between referral fees, FBA, advertising, returns and VAT, real profit hides behind revenue. This guide sets out the method for managing it.
The revenue trap
An account can show €50,000 in sales and still lose money. Revenue is only a starting point; what matters is net profit after all costs. The first discipline: never reason in terms of revenue.
Building your profit and loss statement (P&L)
An Amazon seller P&L stacks up, line by line: sales, customer refunds, referral fee, FBA fees, storage, advertising (PPC), cost of goods sold (COGS), VAT, miscellaneous fees. The bottom line = net profit.
The KPIs to track every week
- Net profit and net margin
- ROI per product
- Advertising as a share of revenue (TACoS)
- Available cash vs upcoming restocks
- Loss-making products
Cash flow, the lifeblood of the business
Amazon pays out with a delay (disbursement cycle): a profitable business can run short of cash to restock. Managing available cash matters as much as margin.
From data to decisions
Your dashboard should answer three questions: Am I making money? Where is my margin leaking? Do I have the cash to scale? The articles on this blog cover each building block in detail. Profit+ automates the P&L, real fees, FBA reimbursements and cash flow.