As Amazon, product profit has always been one of the most concerned issues for sellers when choosing products. Today's article mainly talks about how Amazon sellers estimate their product profits when choosing products?

Here we estimate our product profit from 7 points:

1. Proportion of product cost:

This is generally set at 22%-25%. Sellers can calculate and fine-tune according to their own company's definition of gross profit. The algorithm is: product cost / selling price * 100%. This value can directly determine whether your pricing is reasonable. For example, if my income statement shows that my product cost accounts for 35%, then it is obvious that I may be a new product or clear inventory, and I need to rely on low prices to offset sales. At this time, combine your other data to make a comprehensive judgment. Whether to adjust the price.

2. Proportion of first-way freight:

This is generally set at 5%-7%, and the algorithm is: product first process / selling price * 100%. Here you can see whether your headway is reasonable. Generally, a certain product is best to be shipped by sea combined with air. Of course, this is still related to your gross profit requirements. It’s just that, this way, for your capital turnover, etc., would be a better measure.

3. Percentage of refund fees:

This is generally controlled within 5%. Two results are usually seen here, one is to help us improve our product, and the other is to rethink whether the product is in line with ourselves.

4. Proportion of promotion expenses:

This can be the total proportion of advertising plus evaluation, or it can be calculated separately. Generally speaking, the total is no more than 10 points. It is recommended that you calculate it separately. For example, advertising costs 8 points and evaluation points 3 points, but The gross profit of the actual order is not ideal, and the keywords are not on the homepage, so you have to adjust your promotion ratio. For example, if the advertisement is reduced to 2 points, and the evaluation is pulled to 8 points, then your actual effect will definitely be better than the previous one. The effect is much better. After all, the evaluation is relatively speaking, and it can still do what it means.

5. Storage fee ratio:

This can be basically ignored if it is a small product, mainly for a slightly larger volume, but in fact, no matter what product, the profit saved every month is profit. Here, we generally control it to 2.5%. If it is too high, then we will speed up the turnover, that is, reduce the price, etc., and adjust the later delivery plan to avoid excessive storage due to excessive goods. Here is also a suggestion for everyone, one shipment, with multiple frequent words, do not ship the goods for one month at a time. If you need to ship by sea and it is a very stable explosion, it is recommended to ship the goods for half a month at a time, and then continue to send them. If it is a small volume that can be shipped by air, it can be shipped once a week, which can make your turnover very good and achieve a very high capital utilization rate.

6. Available days:

This depends on your delivery time and logistics time, depending on the situation. Generally , 10 orders can be placed every day, but the delivery time is 2 months, and then 1 month by sea. This kind of product is basically a product that will be abandoned by me later. Because of this, your available days are basically It will be more than 120 days, it will be very hard to do, and it will take up your funds very much. So generally our available days are 30 days for shipping and 30 days for delivery, so I can give him a maximum of 90 days for sale. If your product is delivered quickly and does not require shipping, then you can increase the number of days available for sale.

7. Inventory age:

This must be taken seriously. If your inventory is more than 120 days old, it is actually quite dangerous. You must break it immediately to improve your sales rate. Either you have too much stock, or the product is out of stock. It’s good that there is too much stock. At least it can be sold. If it is out of stock, then you can sell 5 orders a day now, and there may not be even 5 orders in a few days. So in this case, it is the same as the principle of clearing the goods. Hurry up and sell the goods. If the goods are sold out, you still have money to take them. If you go, you will lose all the money, which is a big problem for the use of your funds.

Under normal circumstances, the net profit is generally about 40-70 of the sales, and the profit will be higher if the selection is good.

If there is a deviation in the profit accounting data, the seller will not be able to optimize the listing in time or stop the loss in time, which is why many sellers are busy for a long time without making any money. Failure to account for profits may even lead to difficulties in capital flow or affect the overall business layout. The financial profit analysis of Accumulation Plus ERP solves the difficulties of Amazon profit accounting one by one, abandons complex reports, cumbersome excel, bids farewell to manual accounting, and automatically provides sellers with multi-dimensional profit analysis reports for stores and products, for cost optimization and profit improvement Provide more accurate decision-making direction .

Profit is an important indicator to measure the operating efficiency of an enterprise, and profit accounting is one of the important entry points for a store to reduce costs and increase efficiency.