An Amazon FBA seller reveals why most sellers fail: not tracking expenses as percentages of revenue. His $5 million business runs at 22% COGS, 22% TACoS, and 30% Amazon fees. Understanding these numbers lets you scale from $10k to $100k monthly revenue.
If you're an Amazon FBA private label seller, listen to me. This one mistake that you make in your business will guarantee that you actually fail. And how do I know this? Well, I will do $5 million in revenue this year alone in 2025. And obviously I'm not the biggest seller, but I have been over so many different things. I have failed brands, I had failed products, and now I'm in a position right now where I'm just scaling my business as much as I can. But this one thing will make sure that you actually fail. And that is not understanding your expenses. And it sounds very easy, but you have to break things down in percentages, right? So let's say you sell a $100 item, right? That's what you're selling it for. Obviously you're not making profit on that $100 item, but what is your cost of goods sold as far as a percentage? What is the Amazon fees as a percentage? What is the TACoS, which is the money that you're going ahead and investing into advertising in those TACoS? You see, I analyze a lot of different businesses. I'm actively purchasing Amazon FBA businesses. And this is the one thing that is a low-hanging fruit that can go ahead and take your business from, you know, $10,000 a month to $100,000 per month very quickly. And that's understanding every single expense in percentage form. So let's say for my business, for example, right? Like I own a business called Maverick that does over $5 million. 22% of all of my expenses is cost of goods sold. That's basically manufacturing your product and shipping it into Amazon. Another 22% is actually going ahead and doing TACoS. That's how much I invest. So if I'm going ahead and making $100,000 in revenue, I'm spending $22,000 in advertising. What's another expense? It's Amazon expenses. So with Amazon expenses, it's right there at 30%. So I have 30%, 22%, 22%. So I still have some money left over that I could go ahead and actually have as profit before I pay myself, before I have outside services. But you only know this when you understand every aspect of every single expense in your actual business.
