I tried Amazon FBA for 12 Months (My Actual Profit!)

I finally crossed over the $1 million mark on Amazon FBA for the last year. And don't take my word for it. Here's my Amazon account. Let's go ahead and refresh that. As you can see, last 12 months, right over $1 million in revenue. And again, it's a great accomplishment, but instead of going ahead and patting myself on the back, maybe go ahead and call myself an Amazon FBA guru and start selling courses, I want to be real with you guys because Maybe a lot of people go ahead and advertise that $1 million in revenue and think that somebody actually made $1 million selling on Amazon, but we might know that revenue does not equal profit. So that's why in this video I wanna kind of break down every single expense that I currently have and find out what my true profit margin is because that's what ultimately matters. Because if I was actually making $1 million profit every single year, I might not be in front of this camera right now talking about Amazon FBA. I would probably be in Italy, in Positano somewhere, Going ahead and sipping on some limoncello. But who cares, right? I enjoy going ahead and being here, and that's why I make these videos to better help you guys with your Amazon FBA business and basically tell you what I'm doing to see if it's a little bit different than what you're doing in your business. So if you guys appreciate that, I would really appreciate a like on this video and a subscription to this YouTube channel. And I worked really hard for this because I mostly use Helium 10 to keep track of every single one of my expenses, but Helium 10 can't keep track of everything. All know that 2021 has been very drastic. Freight cost has gone up dramatically. We have a storage facility now. We have to pay Amazon and UPS to basically get it shipped into an Amazon fulfillment center. And that's a lot of things that Helium 10 might not catch in the backend. So I went over all of my bank accounts and saw every single transaction and whatever Amazon FBA went ahead and charged me, I went ahead and included this. So again, if you appreciate that, hit a like on this button. And I also had A big, big expense. And spoiler alert, it has to do with me actually getting sued with my Amazon FBA business. But more on that later on in this video. And there's one thing to consider before we dive into my actual numbers, and that's that I've actually been selling on Amazon FBA for right over 3 years. But these last 12 months, I actually haven't come out with any new products because of this lawsuit. I basically couldn't come out with any new products until we settled. But I like to say that because whenever you're coming out with a new product on Amazon FBA, there's a lot of one-time upfront costs, and that might happen do with maybe product labeling, uh, package design, label design, uh, professional photos for your actual listing page, and different vendors that you might have to use in order to come out with a product the very first time. So again, I didn't have those upfront costs right now because I didn't come out with a new product, but just something to keep in mind. So I went ahead and used a timeframe from November 1st, 2020 all the way up until October 26th, 2021. And as you can see, the revenue here was right over $1 million at $1.04 million. Again, It's a great accomplishment, but I wish this was all profit. The very first expense you have to realize is there's a 15% fee for whenever your item sells on Amazon. Basically, this is the fee for us using Amazon and then funneling all this traffic onto your listing page. And that from that 15%, I actually paid $144,000, which again, it's a lot of money, but Amazon has built a website with so much traffic that is well worth that price. And after that, it's a fulfillment cost, which is basically Amazon having their warehouse workers go ahead and pick my product and hiring UPS or their own Amazon fulfillment services to deliver the products. And with that price, I actually paid $169,000 for that. So right around $170,000. And just like any business, you're going to have refunds. Customers are not going to like your item. Maybe some, some of my items came leaked. So on refunds itself, I actually had to pay out $17,000, right? So it's a lot of money, but assuming that we had over $1 million, this might not be such a big number after all. So the next expense right over here is going to be cost of goods sold. So this is basically what it costs to manufacture my products and to get it from China into the United States. This does not account for the fee that I went ahead and paid to get my items from my garage or my storage unit into Amazon. This is just to get it here into the United States. States. And I paid roughly right around $197,000. So right around $200,000 in just cost of goods sold, which again, I had to dig deep into this one here because freight cost has gotten out of control that in the first half of 2021, the price was just increasing every time I shipped out my item until just recently, the items and prices have been going down on freight costs. And just like any business, if we want our business to grow, we have to run promotions and advertising. And what I did here on PPC is I spent right around $179,000 just on PPC on Amazon, which it's a big number and it's still crazy to me thinking that I spent this much money. But if it's resulting in sales and my ACOS is down, I have no problem going ahead and spending more money if that results in more profit at the end of the day. But I also offer 5% coupon code for all of my products here. It's a nice trick that has helped me, um, basically decrease my sales rank, so increase my sales. And based on coupons itself and promo, I have spent $15,000. And the next one, you might see taxes here and it might be taxes that I have to pay, but this is the actual sales tax that customers have paid for my items. Luckily, Amazon goes ahead and keeps it on the side and they're responsible to go ahead and pay the sales tax to every single state. But I did pay around $67,000 in those sales tax to these different states. So after all of those expenses, which is basically the normal type of expenses you can anticipate with your Amazon FBA business, I went ahead and profited $256,000. So again, right over $1 million to now $256,000 actual profit. So right around a 25% profit margin, which is great. But as you can see, there are still different types of expenses here that I had to go ahead and take on for my Amazon FBA business. Some of it has to do with the lawsuit, others because I'm growing my business. I want to go ahead and scale it even further. But the main one here you can see is FBA inventory and inbound fee. So Before 2020, you could basically go ahead and ship your items straight from China into an Amazon fulfillment center because of COVID All these storage restrictions, a lot of that has changed. So again, what used to be a 25% profit margin is basically no more into the foreseeable future. And we're going to go straight back to the iPad to show the different type of expenses. But I don't want to give away the actual profit margin as of yet. But the FBA inventory and inbound fee, I paid Amazon $24,600 on that, which is a lot of money. That was more of an inconvenience because of the storage restrictions. But after that, we have VA, which is a virtual assistant and software type of fees, basically like a Helium 10, the Amazon $40 a month that adds up. And that was $20,000. And you might be asking, what do I need a virtual assistant for? Basically, I want to grow my brand outside of Amazon. So this virtual assistant that I hired from Upwork is basically in charge of growing an influencer program for my brand. So they're in charge of basically Instagram, TikTok, any type of social media outlets where I'm giving away products to influencers to better help my brand. It might be a lot of money, but hopefully it pays off in the long term. And then after that, you might've seen a lawyer and I talked about this lawsuit that I've been going to. And if you guys want more information as far as why I got sued, I'll go ahead and link it up above. But basically the lawyer fees that I paid in 2021 amounted to right around $25,000. Again, it is a lot of money in just fees and lawsuits. And I always suggest never to go into a lawsuit. It's always better handled outside because you're wasting so much money here, which can go into your business. But then I had miscellaneous charges, basically different types of nicks and fees, warehousing fees that Amazon might have charged me, maybe other fees like tape or labels that I had to go ahead and purchase. And that rounded up to $5,000. So at the end of the day, my true profit margin of what I actually took home from $1 million was $181,000. So right around an 18% profit margin that I'll go ahead and write down right over here, 18%. Again, usually you make that $256,000, but because I've been trying to grow my business and because of that FBA inventory fee, it goes from 25% profit margin to 18% profit margin, right? So again, it's still a lot of money, but obviously revenue does not equal profit. And I want to be as transparent as possible. And look, even from that $181,000, there might be some expenses that I missed. For example, I'm finally paying myself every single month, meaning I am a W-2 employee in my own business where I have to do payroll every single month. And I also use that $181,000 to reorder my current inventory now that I'm done with the lawsuit, come out with different products, expand on my actual brand, right? So again, it's always reinvesting because at the end of the day, even if you're making a lot more profit or you have a fatter profit margin, that just means you're paying a lot more in taxes. So I'd rather reinvest into my business to know that I'll I'll continue growing that business for as long as I can. Right? So again, if you appreciate this level of transparency, maybe I missed some expenses that you currently have in your Amazon FBA business. I would love for you guys to comment below, but until next time, guys, peace.