While mentoring I find that the question of “How do I know my numbers, Jess?” comes up quite often. In this video, I explain that the industry standard for selling is 2% of the in-stock retail value of what you have in the Amazon warehouses.
Here is my example:
If you have $1000 in retail value of the inventory at the Amazon FBA warehouses then you should be selling 2% of that inventory per day. Thus you should be selling $20 per day.
When I look at Inventory Lab-> Accounting-> FBA Sales my average profit is $8.83 and my average sale price is $19.21. Take 8.83 divided by $19.21 and you get the % profit that I get back from each sale. This number is about 44% conservatively.
Then you can calculate that $20 in sales per day x 0.44= $8.80 paid per day.
I then talk about the Profit First Methodology. I split mine into 3 buckets:
30% into profit bucket- this is your goal bucket. In my example, you would take a payout ONLY when your bucket reaches $1000. Your goals may vary.
15% into taxes bucket
55% into the operating costs bucket. ( Services, Inventory, Supplies)
These percentages are just an estimate or a blueprint for you to use in your eCommerce business.
Now you can take your in-stock retail value found in Inventory Lab x 0.02= your daily sales number
If you are not selling 2% per day then you need to dive deep into your inventory and optimize all listings. Add new photos, add updated bullet points and descriptions. The better optimized your listings are on any eCommerce platform the better the velocity of your sales.
Now you can calculate your sales against industry standards and set up your business to obtain your payouts.