April COVID19 update at $598K

April COVID19 update at $598K 1

Here’s the current Gorilla ROI Amazon sales progress. To see the interactive version, go to our income reports page.

Note: These monthly updates are for educational purposes.


If March was crazy, April was just insane. We hit record highs.

Many times we were definitely overwhelmed. Even had a week where everyone had to work in the warehouse to fulfill orders and ship inventory.

All hands on deck.

April COVID19 update at $598K 2

But we got through it.

Some points I’ll be talking about.

  • Inventory issues… in a different form
  • FBM processes
  • Basic shipping supplies
  • Finding help

April highlights

  • Ended the month with $598k in sales
  • 221% growth from the same month last year
  • 84% growth from last month
  • Conversion rate across the account jumped to 29.9%. Normally between 20-21% before COVID.
  • Bestseller took off and got the best seller badge in the category for a 4 days
  • FBM sales continued to increase (which is also bad because products are switching to FBA)
  • ACoS dropped to 12.4%. Normally 25-30% before COVID.

Lowlights for April

  • One of our main suppliers refusing to give us enough product
  • Majority of products still showing delayed FBA delivery dates
  • Dealing with FBM refunds and customer service issues
  • 7 out of our top 10 best sellers still classified as non-essential
  • Increase in expenses to keep up and trying to stay ahead of the sales
  • Not enough manpower
  • Had to turn off PPC for best seller to reduce velocity

Inventory/supply chain capacity

A couple of months back, I mentioned that we purchased a year’s worth of inventory in order to get ahead of the virus and to make sure we didn’t go out of stock while the country was in lock down mode.

The thinking behind this was believing the global supply chain would be broken. It didn’t break as much as I thought, but boy, am I glad we ordered a year’s worth of product – because we are nearly out after only 3 months. Another order is on the way.

However, one supplier we rely heavily on in the US, is operating at max capacity and cannot meet customer orders.

This has resulted in the manufacturer allocating inventory to their biggest accounts, leaving smaller accounts (us included) fighting for rations.

We are now at the mercy of our supplier who is reducing our quantities, delaying shipments and limiting how many pallets they will ship us per order.

If there’s ever a way to p*ss off customers, this is at the top. We are moving forward with replacing them.

April COVID19 update at $598K 3

We could easily be doing 40-60% higher sales. But we are forced to shut down all PPC related to this product line and let SKUs “glide” out of stock. Better to slow it down and try to keep things steady as opposed to going out of stock quickly and giving up a high ranking spot to a competitor.

For the first time, this isn’t the typical out of stock inventory issue or inventory projections that we could blame ourselves. Our numbers and projection models have been working brilliantly the past couple of months.

We know what to order, when to order, how much to order, even with the days where products are spiking. All thanks to the flexibility of our custom spreadsheets and calculations. Being able to update numbers on the fly and calculate new scenarios is keeping our operations ahead.

amazon warehouse dashboard
Our Amazon warehouse dashboard

Now that we’ve had a taste of the velocity needed to run at $600k/mo ($7.2M annual run rate), I’m confident our current operations can keep up if sales continue at this rate.

Sales will slow down for sure. May looks to be slowing down as summer rolls in and people get out more.

FBM is a pain in the ***

FBA has problems for sure. But dealing with FBM is a massive pain in the butt.

We’ve got our FBM to where we can support 200 orders per day, but I’d be more than happy to offload it back to Amazon.

  • Picking and packing orders
  • higher shipping costs
  • more supplies
  • extra tables
  • extra space needed
  • more shelves
  • and pretty much double all the basic stuff

Trying to be quick and accurate is not easy. Goes to show how easy FBA makes life on sellers even with all the mistakes they make.

The increase in customer service and extended return period is piling up. We have a new shelf to hold all the returned items we need to check and request reimbursement for and the mountain keeps growing.

April COVID19 update at $598K 4

I’ve seen some companies take down their phone numbers from their website citing “high demand”. It’s tempting to do the same and make support only available via email.

Basic shipping supplies

A heads up.

Basic shipping supplies are going out fast. Everyone is shipping online and this is causing a shortage of affordable poly mailers, barcode labels and other basic shipping supplies.

Took about 10-14 days to get USPS flat rate padded envelopes. Every USPS we visited didn’t have them or wouldn’t give us any.

The most popular poly mailer sizes continue to go out of stock and barcode labels for the size we need jumped in price by 30-50%.

Like everything else this year, I highly recommend to stock up on the basic essentials. No point in having product if you are blocked because of something as basic as not having the proper size bag.

Back to basics during these times.

Getting help off Craigslist

I’ve had some extreme good fortune hiring off Craigslist. A key employee came in through Craigslist and worked his way up from the warehouse to being my right hand in operations.

But lately, (in the US) specifically, it’s been a train wreck. For all the news you hear about people wanting to work and looking for jobs, 8 out of 10 people end up no showing.

Looks like my main competitor, is not other businesses, but the unemployment office giving people an extra $600 per week.

Here’s a system that’s working though.

I’ve turned the job post into a “schedule your own working day” type appointment booking. People see the ad, if they want to work, they use the calendar link and schedule themselves.

If you find yourself in a similar positions, here’s how I did it.

  1. Using a free account on calendly.com, I’ve hooked it up to a shared company Google calendar and created an event.
  2. I first set the limit of people per day to 5, but raised it to 10 when no one showed up after all slots were full. (Depending on your area, you could have 20 people book themselves and have nobody show up.)
  3. Put up the ad on Craigslist with the link to the calendar included in the ad.
  4. Tell them to schedule themselves and not to contact or reply to the ad.
  5. Automatically gets added to the calendar with text and email reminders.

April COVID19 update at $598K 5

Using this shotgun method, went from 2 people showing up in the week, to 9 people and managed to ship out a boat load of product.

Wholesale and our online store

No wholesale orders.

Online store sales is immaterial compared to Amazon, but traffic is up, SEO is improving and sales are coming in consistently.

Hard to tell whether it’s due to our content marketing finally getting recognized by Google after the major updates, or whether it’s because the retailers that sell our products are all closed.

Walmart is also another surprise. Sales have increased 2-3x what it used to do. I think it also has to do with extra products we’ve added to the catalog. Looks like there is more potential on Walmart for one of our product lines.

New updates and tutorials

We’ve published some awesome tutorials and guides for Amazon sellers.

Free Amazon FBA spreadsheets for all

If you have messy sheets and need something refined to help run your numbers, get the free Amazon spreadsheets.

pro spreadsheets fba pricing

You can download it immediately without having to sign up for anything.

Just copy straight to your account.

If you want to get updated data straight into your own Google sheets, you can use Gorilla ROI. It makes work so easy when you don’t have to manually update data or log into accounts constantly and wasting time.

March COVID19 monthly update at $325K

march 2020 fba sales income chart and goals

Here’s the current Gorilla ROI Amazon sales progress. To see the interactive version, go to this page.

Note: These monthly updates are for educational purposes.


What a crazy March.

  • Stay at home orders
  • safety precautions
  • limited maneuverability
  • inbound products blocked
  • delay in shipments to customers
  • surge in sales
  • and more

A shout out to~

I feel very much for the sellers who are unable to restock, sell and operate. As small business owners or operators, there aren’t many people who understand what we go through.

A shout out to you guys. We are in this together.

March highlights

  • Finished the month at $325k in sales
  • 45% growth from the same month last year
  • 36.5% growth from last month
  • 2020 Q1 was up 36% from 2019 Q1
  • Conversion rate across the account jumped to 24.4%. Normally between 20-21%.
  • Bestseller was not blocked from inbound or delayed shipping
  • Amazon finally switched the algorithm to favor FBM
  • Drastically cut Amazon PPC

Lowlights for March

  • COVID making each day interesting and scrambling to keep ahead of changes
  • 7 out of our top 10 best sellers were classified non-essential
  • Our #2 and #3 best seller were in the wrong category so it doesn’t look like it will be released anytime soon
  • Increase in expenses for all the changes

How inventory planning has helped us thrive during this Coronavirus scramble

First, we are definitely lucky.

Our main category is consumer cleaning goods, so we are considered part of the “essential” products.

Still, a lot of our products were blocked from inbound but the saving grace is that our #1 best seller is whitelisted and that has picked up the slack to offset the other products and more.

If your products are whitelisted and shipping at Prime speeds, I published a detailed article on what we can do to be proactive during this time.

We are putting new product development on the backburner while we focus on making sure our products do not go out of stock.

Inventory planning is critical at this point and we’ve also benefited from the majority of our competitors going out of stock, while we are maintaining a 20-40day supply of inventory.

This has been possible because of our GORILLA_INVENTORY() formula. Sure this is a plug, and it’s not for everyone, but for our needs and many of our users, they are ahead of the competition who are relying on stale data from Amazon or getting behind by doing it manually.

If you can stay in stock 1 extra day thanks to GorillaROI, the tool has paid for itself.

We have been closely tracking daily and 3-day sales. Then comparing it against the last 7 days and 30 days to see how big the spike is compared to historical trends.

We’ve also updated our seasonality weighting to assign greater emphasis to the last 7 days. Both of these factors help us project inventory better based on current sales data. Not based on last 30 days data.

If we were using our old calculations, or software that couldn’t adjust to a tweaking of time periods and weightings, we were out of stock on many occasions.

amazon inventory days left table highlighted showing the actual days

The virus exposes your business weakness

The important things are never urgent.
The urgent things are usually never important.

This quote is one I try to base my life and business on.

Unfortunately, we all need something like this pandemic to show us what’s urgent (and not important) vs what’s important.

On the business side of things, examples of the urgent stuff are:

  • getting shipments out on time
  • calculating numbers
  • writing reports
  • phone calls and meetings
  • new product development

The important stuff is pushed down the to-do list until it’s too late.

  • regular review of financial health
  • creating a rainy day fund
  • diversifying channels and business industries
  • working on operational preparedness
  • ways to improve employee retention and morale

I’ve been using some downtime to beef up the above points and other important parts to our business.

Our weaknesses exposed

For us, this virus has exposed the following weaknesses:

  • lack of manpower to handle an increase in sales
  • focused too much on FBA (struggling to keep up with FBM)
  • lack of automated equipment
  • inefficient and bad layouts of workstations

With this clearer view of where we need to improve, we are in the process of looking into and implementing:

  • automation in our warehouse for packing
  • have 2 separate workstations dedicated to FBM and our direct orders
  • duplicate equipment so that printers and laptops don’t become an unnecessary bottleneck
  • find ways to sell more product off of FBA

Amazon changed algorithms to promote FBM for delayed products

I don’t know when everything will return to normal.

Prepare for the worst. Hope for the best.

The article I recently published on COVID operational strategies is still very relevant. Be sure to check it out if you haven’t.

We’ve switched over our products that are delayed and blocked inbound, to FBM.

Currently, we are fulfilling 120-200 orders a day.

Our set up is best for about 50 orders a day. The current 3-4x demand is putting everything into overdrive and straining our operations.

It’s a shame that we don’t have massive margins like other industries.

There isn’t enough buffer to use a 3PL for kitting and shipping.

  • Shipping to the 3PL
  • Per unit fee for kitting
  • Warehousing fee
  • Shipping cost

The extra layers of cost will eat up the margins. We are looking at long term solutions like auto bagging machines to improve ROI.

Prepare for congestions

Talking about continued changes, congestion at the port is heavy. Not because business is booming, but because the number of cargo ships in operation is down and the people working at the ports are down.

Imagine how worse it will be if businesses start to come back on.

The backlog is going to be massive.

If you can, order inventory early, have it ready early, ship it to Amazon earlier.

When all sellers are back in full force, Amazon’s inbound department will be slammed with shipments.

Slashed PPC spend for delayed products

The big win for us is being able to slash our PPC spend. No reason to advertise and fight for top spots when you know your product won’t ship for a month.

Customers will click your ad and then bounce, or buy and then cancel.

It’s a lose-lose-lose.

  1. You lose money on the click
  2. Your listing metrics go down because of the lower conversion
  3. Your keyword rank goes down because of the lower conversion

PPC spend the past few weeks has dropped 40-50% which all goes towards profitability.

Booyah.

It’s also a great opportunity to “restart” our PPC campaigns and start fresh.

Wholesale and our online store

Zero.

No retail customer is buying anything wholesale at the moment.

Online sales have increased slightly.

Walmart has doubled, but still a fraction of Amazon.

New updates and tutorials

We’ve published some awesome tutorials and guides for Amazon sellers.

Books read and recommend

Recommending this, especially during this time.

Profit First

March COVID19 monthly update at $325K 6

It’s a very easy book. You probably don’t have to buy it.

It’s as easy as:

  1. Create multiple bank accounts (checking and savings) for “profit” and “savings”
  2. Profit = excess cash that you can draw or distribute at the end of the year
  3. Savings = taxes and required expenses
  4. Transfer money to each account every 2 weeks
  5. Transfer based on your current situation and cash flow

Looking at it in hindsight, this sub $20 purchase potentially saved our business. I started this at the end of 2018 and transferring cash to a different account gives it a “physical” separation where you know you can’t touch it and the business has to run with what it has.

Making work visible

March COVID19 monthly update at $325K 7

Another simple book. Mostly related to Kanban process like Trello.

It’s great for teams and eliminates asking or questioning what people are working on.

We utilize Trello heavily and have it integrated into our systems.

Quick and easy read with some refreshing insights.

Free FBA spreadsheets for all

If you have messy sheets and need something refined to help run your numbers, get the free Amazon spreadsheets.

pro spreadsheets fba pricing

You can download it immediately without having to sign up for anything.

Just copy straight to your account.

If you want to get updated data straight into your own Google sheets, you can use Gorilla ROI. It makes work so easy when you don’t have to manually update data or log into accounts constantly and wasting time.

Feb FBA monthly update at $238K

 

Feb FBA monthly update at $238K 8

Current Gorilla ROI Amazon sales progress. To see the interactive version, go to this page.

Note: These monthly updates are for educational purposes.


I’ve updated the chart to show the last 12 month (LTM) revenue compared to the goal of hitting $5M. Still a long way off, but the path to get there is clear.

Sales were down from January, which is expected because Dec and Jan are our best months. Then again, Jan this year was the best Jan we’ve ever had, so it’s hard to top that.

Nevertheless, this February was still a 20% improvement compared to Feb of last year.

Here are the stats and my thoughts.

Feb FBA monthly update at $238K 9

February highlights

  • Finished last month at $238k in sales
  • 20% growth from the same month last year
  • Margins increased slightly again as we had to raise prices to slow down sales
  • Removed all coupons without any drop in sales
  • Consistent conversion rate. Increased 1% to 21.1%.

Lowlights for February

  • Best sellers out of stock (note the plural)
  • Coronavirus, port congestion and delays
  • PPC spend over budget

How did Feb 2020 do overall?

If I was a robot and didn’t understand the current market sentiment, February did quite well.

There were hiccups in terms of supply chain and going out of stock which I get to in the next section.

Being up 20% compared to last year is a great start.

For a deeper context, in Feb of 2019, we had an average offer count of 59. This Feb, we had a total of 90. The 50% increase in SKUs was not a result of launching loads of new products, but simply creating more bundles and selling horizontally and vertically with our existing products.

We are now at a point where if we do bring on a new product, we can turn it into 10 different SKUs.

We’ve worked hard to go an “inch wide, mile deep” and now we can try and cast our net a little wider.

It’s still a numbers game because only 1 out of 10 listings will be a hit.

Based on our Amazon business model, I define a standard successful product as:

  • selling over 1,000 units a month
  • about 40% gross margins and 15% operating margins

There are different forms of successful products such as loss leaders, highest quality, highest margins and so on. It depends on your strategy, but to keep things simple, I’m just referring to the standard successful product definition for us.

Now, if the hit rate for a successful product is 1 out of 10, then it comes down to creating more variations and listing. To get 2 winners, it’s likely that I need 20 listings. To discover 3 winners, I’m going to need 30.

This is where the keyword siloing strategy I shared last month will help.

There are a lot of different ways to create variations so use some creativity because you just don’t know what people will like.

This is what we’ve experienced. Our hit rate total is going up and sales come with it.

The next thing I need to figure out is how to automate or at speed up the process of creating new Amazon listings using existing product information.

If you know of “flexible” software that can create new listings (not existing listings), please let me know – or maybe our Gorilla ROI team needs to create one.

Stopped all coupon sales

I’m a big supporter of coupons, and until the start of this year, I ran it on every product that could support it.

But it’s not cheap because coupons have an ACoS of 10% for us. 5% coupon plus the fee comes out to 10%.

If your products are priced $20+, the ACoS will be lower, but you are still giving up 5% at a minimum.

My reasoning for using coupons was to display the green coupon badge and get extra attention. Same goes for lighting deals.

amazon coupons lightning deal

But after checking how much I had spent on coupons in 2019 using the new profit and loss spreadsheet, I knew I had to stop. We ended up spending $18k on coupons.

coupon fee at amazon

Looking back, this was $18k that we could have saved. It would have been easy and wiser to run coupons for a month, measure the sales and conversion rates, and then turn it off and measure again. If there is no significant difference, there’s no reason to throw money at it.

Lesson learned.

At least in 2020, I’ll be using this $18k somewhere else.

As you can see, turning off our coupons has bumped up our margins a fraction. This is always welcome.

But if you have high priced products and a big market like the bluetooth earbuds industry, and huge competition, applying the coupon makes sense as it can absorb the cost.

Just remember to factor it into your operational expenses because this is on top of the PPC you are already spending on the product.

If the first earbud listing has a PPC ACoS of 30% and then 10% on top of that, the ad cost is 40% on this product. Whether that makes sense is up to the seller.

Higher PPC costs

We ran aggressive bids in Jan to capture the spillover from Dec. Looks like we were are little too aggressive towards the end of Jan and starting Feb though.

My optimal level is to keep total ACoS across the company down to 10%. That hasn’t happened for several years though. A realistic target is now 13%.

However, YTD total ad spend is 14.2% so I’m spending too much and need to reign it in.

But there are always different ways to go about it. Normally, you’d just turn off ads or reduce the bids. That’s the easiest and most obvious way.

The other two methods are to:

  1. Not go out of stock. If the Amazon listing says “in stock on March xx”, but the customer clicked an ad to the listing and they bounce, that’s a waste of ad spend.
  2. Sell more, higher margin products. More profit for the same cost.

We’ve reduced the bids for crazy high keywords. That’s a no brainer and the products that went out of stock, we’ll monitor it again this month and adjust as needed.

Out of stock, supply chain, Coronavirus

Our calculations and forecasting were doing so well until it wasn’t.

We get 1/3 of our products from China, 1/3 from Korea and 1/3 from the USA.

Yup.

China got hit with the virus and we were glad we had diversified to Korea. But then Korea got hit…

Feb FBA monthly update at $238K 10

In January, our Korean manufacturer just missed the container loading cut-off date so we lost 2 days until the next loading date.

But this was just before China got worse, so the next container we were waiting for at the Korean port, was stuck in China for 10 days before it finally arrived in Korea and our product got loaded.

This led to us going out of stock as sales kept increasing. Slight price increases, turning off the PPC helped a little, but not enough.

We went out of stock for about 3 of our best sellers in Feb.

Other supply chain issues came up like our US supplier missing our PO for 8 days.

It looks like more stock out.

Feb FBA monthly update at $238K 11

We try to implement as much redundancy and checks to prevent this, but there’s only so much we can handle as they are external factors.

That’s the frustrating part.

I’ve been communicating with our manufacturers and while some are operating, many are still struggling to ramp up production.

A lot are still working from home, some say they’ve started production again, but it’s at limited capacity.

Another one of my manufacturers quoted a lead time reduction of 30%. I don’t know whether that’s a good or bad thing.

Our position is to remain cautious as I don’t believe anything the Chinese government puts out.

Financial performance benchmarks

I’m leaving the 2019 numbers here because doing these numbers on a month to month basis doesn’t make sense. There are high fluctuations from one month to another. Easier and better to do it quarterly to see if we are hitting our objectives.

For 2020, my goals are:

    • COGS of 22% vs 23.3% in 2019
    • Amazon fees of 40% vs 40.6% in 2019
    • Gross profit of 34% vs 32.9% in 2019
    • Amazon ad spend of 12% vs 12.4% in 2019
    • Total operating expenses of 25% vs 25.5% in 2019
    • Operating margin was 9-10% vs 7.3% in 201

Wholesale and our online store

I had some bad news about our wholesale customers trying to go around our back. Our products are patented (utility+design) so I’ll have our lawyer take care of it.

Otherwise, wholesale and online sales are still a fraction of our Amazon sales. Not much to share than that.

New tutorials and guides

We’ve published some awesome tutorials and guides for Amazon sellers.

People ask about advanced techniques and how to build better and dynamic spreadsheets. The first and easiest is to understand how to structure your spreadsheet.

Follow the first link on the Amazon inventory management system, or you can read this simplified best practice to creating spreadsheets.

Free FBA spreadsheets for all

If you have messy sheets and need something refined to help run your numbers, get the free Amazon spreadsheets.

pro spreadsheets fba pricing

You can download it immediately without having to sign up for anything.

Just copy straight to your account.

If you want to get updated data straight into your own Google sheets, you can use Gorilla ROI. It makes work so easy when you don’t have to manually update data or log into accounts constantly and wasting time.

Jan FBA monthly update at $282K

amazon income report Jan 2020

Gorilla ROI Amazon sales progress. To see the interactive version, go to this page.

Note: These monthly updates are for educational purposes.


I’m surprised by our January results.

January is usually good to us, but normally it translates to numbers that are in line with December results.

After all, December is a shopping bonanza and the best month of the year. But January was much better than usual.

Here are the stats and my thoughts.

January highlights

  • Finished January at $282k in sales
  • Margins increased from December as we kept prices steady but also raised prices on our best sellers to try and slow the sales
  • New bundles and variations we created boosted our presence even further
  • 11% growth from Dec
  • 35% growth from last year Jan
  • Consistent conversion rate of 20.5%
  • Cleaned up and switched accounting from cash to accrual (finally)
  • New keyword/content siloing strategy going into effect for new listings

Lowlights for January

  • Coronavirus
  • Sales spikes and supply chain management
  • Wasted spend on failed lightning deals
  • Port congestion and delays
  • Going out of stock

How did January 2020 grow?

Did you read our 2019 end of year results and thoughts?

Why are we up 11% from December?

Jan FBA monthly update at $282K 12

I did lay out some growth plans in the December report, but to say it’s working within 1 month or implementation is a stretch.

I admit, I don’t know the single reason. And that’s OK because it’s likely a result of multiple factors.

  • People usually buy our cleaning products to start the new year
  • People received Amazon gift cards for Christmas and want to spend it
  • Economy is better than what the news makes it out to be
  • Amazon’s recent review count updates where they’ve merged products again and many buyer accounts had their reviews deleted again

These reasons are mostly secondary and a by-product of putting in the groundwork.

I would say the biggest contributor to the increase in revenue though are the new listings of variations and bundles we created throughout Oct and Nov.

I can instantly grab monthly sales stats per sku and then use Google Sheets sparkline feature to create small charts and show the monthly sales trend.

monthly amazon sales stats gorilla salescount

Side note: to get monthly data, enter the dates as YYYY-MM. Then use the format of the formula below for each month.

=GORILLA_SALESCOUNT("2020-01", "US"A4:A500"all")

I’m looking forward to creating more listings and casting our net wider and farther to dominate the search results, sponsored ads areas and getting our listing to be synonymous with our target keywords.

Which brings me to…

Keyword Siloing

Jan FBA monthly update at $282K 13

If you are familiar with SEO, siloing content and keywords is a polarizing topic. But in Amazon’s world, it works.

What is siloing?

By definition

Silo = isolate (one system, process, department, etc.) from others.

For listings, keywords and Amazon SEO, it’s allowing a listing to rank for a single purpose keyword.

I’m going to assume that most people (myself included) started out by creating product listings and threw in hundreds of keywords into the listing and backend keyword boxes. The intention was to try and get on the first page for all those keywords with the single listing.

More keywords = more traffic = more sales.

Right?

Wrong.

Since you are trying to win the Amazon’s choice award, there has to be correlation with the keywords your listing is targeting and what the shopper is searching.

You can only win one Amazon’s Choice badge at a time.

Here’s an example for “bluetooth speaker”.

Jan FBA monthly update at $282K 14

This listing is going after keywords such as:

  • portable outdoor speaker
  • portable outdoor bluetooth speaker
  • shower bluetooth speaker
  • bluetooth speaker

The listing has 3 variations using the same title and information.

This is how we built most of our listings early on, and now as we try to improve them, it is a major pain. Since the title contain too many keywords, the listings that sold well cannibalized the other variations.

Jan FBA monthly update at $282K 15

In the bluetooth speaker listing, they have 3 child variants.

They could have given a unique keyword to each of the color variants such as:

  • Black = portable outdoor speaker
  • Green = shower bluetooth speaker
  • Blue = waterproof bluetooth speaker

This way, each variant has a specific objective and they aren’t stepping on each other’s toes.

Trying to fix this later when you have sales is going to be tougher because it could break the entire family of listings and sales will tank.

Try doing an assessment of your products to see what keyword it is converting for.

If the black speaker above is converting the highest for “portable outdoor speaker”, the entire listing should be updated to go all in on that keyword.

Other words will naturally be created in the copy, but you’ll be sending signals to Amazon and shoppers that the black speaker is THE product for “portable outdoor speaker”.

This is what we are doing for all of our younger listings. By siloing keywords and content we can make sure we aren’t overlapping and cannibalizing sales of what could be deemed similar.

Applying such changes to mature and strong listings is a different story and requires more precision and analysis. No need to fix what’s working well.

Coronavirus and impact to sellers

Jan FBA monthly update at $282K 16

If you do not source from China, what a huge relief.

For the rest of us, it’s trying to figure out the impact it will have. There are many people saying that this isn’t a big deal and downplaying what’s been going on.

I’m talking from business side here and not on the disaster itself.

I’ve found it helpful to be realistic and prepare for bad case scenarios versus being optimistic and being caught flat footed. That’s how businesses went out of business.

Jan FBA monthly update at $282K 17

Blackberry and Samsung laughed at Apple when they first launched the iPhone. I know because I was part of the Samsung mobile division that launched phones for the US market from 2006-2014.

Blackberry is now dead in the water. Samsung scrambled and got back to #2.

You don’t have to go into full emergency mode, but factoring in 1-2 months of delays and rehearsing scenarios on how your team should handle and make decisions in these situations is a helpful and preventative measure. It’s also great training.

I would rather have an extra 1-2 months worth of inventory (overstock) of best sellers than be out 1-2 months of best sellers.

The coronovirus is going to impact:

  • delays from raw material suppliers as they can’t make enough
  • delays from manufacturers not being able to produce at full capacity
  • delays because bigger companies may have placed massive orders and takes priority over yours
  • delays as quality goes down because manufacturers are scrambling to manufacture and QA is a distant second
  • delays because you have to find new or more inspectors
  • delays as more paperwork from China is required for exporting and backlog of outgoing shipments at the port
  • delays as manufacturers will play the force majeure hand and demanding an adjustment of the costs

Dismissing the impact of coronavirus means you are saying that none of the above are big risks and your supply chain is perfect.

It’s also a wake up call because China wasn’t a big deal for Amazon sellers in 2003 during SARS. In 2020, it’s safe to say that most US sellers rely too much or exclusively on Alibaba and Chinese suppliers.

Diversifying supply chains to different countries is never a bad idea. It’s a lot of work, but it can pay dividends later on.

For sellers who created their entire business based on Amazon+Alibaba, that’s a double whammy.

Even if you source 100% from USA or another country, you will have all your eggs in one basket. If a black swan event happens in America, the same issues apply. Having backup manufacturers to existing manufacturers is something we try to do in order to diversify the risk and once it is set up, it isn’t as hard to shift manufacturing from one place to another.

Again, it’s a lot of work. It’s like insurance. When you need it, you are super glad you have it.

Mismanagement of lead times… argh

Jan FBA monthly update at $282K 18

In my December report, I was all proud that we didn’t run of stock for the Christmas rush.

Well, I spoke too soon.

Our sales have been spiking (good problem to have) but that means our inventory is running on fumes. A steady increase in sales is something we can project, but sudden 30-40% surges lasting for several weeks to a month means our buffer inventory is depleted.

To add to that, our containers were and is delayed at the port of departure, got held up in customs for exams and x-rays, and has been sitting idle for over a week.

Frustrating.

We’ve recalled other variant bundles from Amazon inventory that aren’t as important so that we can reallocate the product to more important listings.

This got me thinking about calculating lead times.

To date, we’ve used a simple method of the manufacturing lead time + 15 days.

No wonder I’ve gone out of stock so often. I realized that calculating the lead time is just like calculating the landed cost.

With landed costs, you have to factor into the pricing:

  • cost to manufacturer
  • packaging components
  • handling charges
  • duties
  • taxes
  • shipping
  • and anything else that goes into making the product.

With leadtimes, I’ve only been thinking about:

  • time to manufacture
  • time it takes to arrive

When it should be broken into every detailed step.

  • time from order submission to get raw materials
  • time from start to end of production
  • time for QA or send inspectors
  • time to remake failed units
  • time to pack and ship
  • time at the port of departure
  • time on the boat
  • time at the port of arrival
  • time of potential x-rays and exams
  • time of delivery
  • time to inspect
  • time to repack
  • time to ship to Amazon
  • time to get to Amazon’s warehouse
Jan FBA monthly update at $282K 19
source: oracle blog

My standard leadtime calculation turned out to be the best case scenario with no delay calculation.

In reality, it should have factored every single touch point for a realistic lead time.

Now that we’ve updated our lead times into our calculations, I’ll keep you updated on how it works out.

Financial performance benchmarks

I’m leaving the 2019 numbers here because doing these numbers on a month to month basis doesn’t make sense. There’s high fluctuations from one month to another. Easier and better to do it quarterly to see if we are hitting our objectives.

For 2020, my goals are:

  • COGS of 22% vs 23.3% in 2019
  • Amazon fees of 40% vs 40.6% in 2019
  • Gross profit of 34% vs 32.9% in 2019
  • Amazon ad spend of 12% vs 12.4% in 2019
  • Total operating expenses of 25% vs 25.5% in 2019
  • Operating margin was 9-10% vs 7.3% in 201

Wholesale and our online store

Wholesale is slower this month. January doesn’t have much going on as customers already stocked up during Christmas.

Found one customer who is now selling under our listing on Amazon.

That’s the problem if customers lie about selling on Amazon. Only thing to do is cut them off the wholesale list.

New automation and operational articles

More articles, tutorials and operational articles were posted.

Free FBA spreadsheets for all

If you have messy sheets and need something refined to help run your numbers, get the free Amazon spreadsheets.

pro spreadsheets fba pricing

You can download it immediately without having to sign up for anything.

Just copy straight to your account.

If you want to get updated data straight into your own Google sheets, you can use Gorilla ROI. It makes work so easy when you don’t have to manually update data or log into accounts constantly and wasting time.

December FBA monthly update at $252K

Gorilla ROI Amazon sales progress

2019 Gorilla ROI Amazon sales progress. To see the interactive version, go to this page.

Note: These monthly updates are for educational purposes.


For the first time, our financials was the easiest to organize this year.

Used Gorilla ROI to pull in my inventory history for Dec 31, units sold, finances, fees and charges and finished the books in less than a day.

I skipped November numbers and since it’s the end of the year, I’ll focus on December and 2019 total figures.

I’m also going to share P&L percentages that should make you think about your performance.

We aren’t perfect, but when you look at our percentage of revenue we spent on ads, operating expenses, rent, and inventory, it will help you gauge the health of your business and figure out what your benchmark it.

By knowing your percentages, it makes it easy to track the progress and performance of your business.

You’ll see what I mean below.

Let’s begin.

December highlights

  • First time passing the $250k threshold
  • Ended December 2019 with $252k in revenue vs $201k in 2018.
  • 25% growth from last year
  • Consistent conversion rate of 20.5%
  • New SKUs launched at the end of the October and November pushed sales and visibility throughout Dec and into January 2020

Year-end highlights

December FBA monthly update at $252K 20

  • $2.45M in revenue vs $1.85M in 2018
  • Ended the year strong to push the annual growth to 32%
  • Able to increase margins in the 2nd half of the year to boost cash flow
  • Added 10 SKUs at the end of October and November which boosted sales
  • More bundles and combinations of existing added – not new products
  • Focused on leveraging existing strong sellers instead of trying to launch and compete with new products with no track record
  • Operational efficiency stayed the same = more margin
  • Working to build a team. Get away from being a jack of all trades.
  • Made in China products made up 1/3 of total sales.

Lowlights for December and year-end

  • Gross profit down due to more losers than anticipated
  • Inventory increases due to slow-selling and dud products
  • Got killed in competitive categories
  • Losing my shirt on Amazon EU
  • Facebook ads didn’t work out as well as I hoped. Got some results, but still a long way to go.
  • Chinese copycats outselling our first to market products.

December, 2019, and beyond on Amazon

2019 is in the books.

December FBA monthly update at $252K 21

In my Amazon newsletter, I mentioned a couple of vital trends you must be aware of.

  1. Amazon will continue growing despite its dominance in e-commerce.
  2. Long-term profitability and performance will be built on finding products with competitive advantages that Chinese sellers can’t copy.

If 1-day prime continues to improve, it will be a huge boost to Amazon’s market share and sellers will benefit. Amazon got slammed with orders and delayed shipments in December 2019, so they have a long way to go.

The flipside is that more shoppers will shop on Amazon for fast(er) shipping, and the conversions on your own website will likely drop if you can’t offer a similar service.

Keep in mind that “Free” fast shipping has become a right more than a benefit. People are willing to spend $15 on a product vs $10 for the product + $5 shipping.

If you want to take advantage of Amazon’s platform, what’s a seller to do nowadays?

Amazon keeps courting China manufacturers directly.

Sooner or later, you will be fighting against the manufacturer and they can either stop selling to you OR undercut you on Amazon directly.

If you are serious about winning against Chinese sellers, then you have to go where they can’t.

The higher the barrier the entry, the safer you will be. Long term, you will be safer with these types of products.

  • Requires local licenses
  • Needs FDA or EPA registrations/certificates
  • You hold utility patents (not trademarks)
  • Requires strict quality control
  • You own intellectual property or formulations
  • Regulated food and digestible goods
  • Sourcing from outside of China

These are the areas that copycats can’t follow. Otherwise, you end up with products like… herb scissors.

December FBA monthly update at $252K 22

If you go through the trouble of creating barriers, and sellers find your listing using scouting software, they’ll skip it as the barrier to entry is higher than normal.

Most people won’t even try because they want to follow the “low risk & guaranteed” blueprint sold on youtube and through courses.

Growth plans for 2020

At the end of the year, our small team sat down and we did a post mortem analysis of every SKU for why it did well or not.

This was a fantastic exercise because it identified key factors for our business.

We were wasting a lot of time, energy, money and inventory by trying to launch products in different categories instead of focusing on our existing strong sellers and figuring out how to take them further.

If growing means launching more products, rather than launching random products like a shoe, lawnmower, hairdryer, and becoming another Walmart, we realized it is wiser to launch the same number of SKUs by going horizontal AND vertical and using variation listings.

Horizontal is where we come with a line extension that is similar in terms of price and quality. This could be a different color, size or scent.

Vertical extension is to create a cheaper or more expensive version.

Until now, if we were selling beach balls, we were only selling 3 colors for the longest time.

I didn’t think about expanding to different sizes, quantities, colors, bundles, and other combinations to go horizontal and vertical.

The 10 new SKUs we launched in Q4 were all variations and it worked.

Before, if we owned 2 spots on the first page. We now hold about 3-4 spots on the first page results – before PPC. More visibility equals more sales.

We’ll be focusing on creating and sourcing products that we can create bundles out of. Rather than keeping a SKU to itself, I want to be able to sell a single SKU in 5 to 10 SKU variations and bundles.

Based on our failed products last year, I told the team that I want to reduce the number of new products developed. That’s always harder said than done because I have far too many (bad) ideas pop up.

But our focus will be to continue improving our product launch process to get the ball rolling. The cost per review is getting higher because of the strict rules Amazon lays out.

If you do the math and find that your cost per review is less than $20, you have a gold mine.

With one of our newer products, it’s costing about $60-$100 to get a single review through discounts, Facebook ads and ManyChat bots.

Ouch.

Always use Amazon vine review program and Amazon’s reviewer program when you can. It’s now the cheapest way to get your initial reviews.

If we can find the secret sauce on product launches, then it’s just a matter of feeding new products into the system and scaling up.

Measuring performance with Gross Margin Return on Investment (GMROI)

Our margins really picked up in Q4 compared to last year. That’s the beauty of bundling.

Creating bundles allows you to:

  • target a different set of keywords
  • increase the total price
  • Amazon fees become cheaper
  • fatten margins
  • leverage existing listings
  • increase inventory turnover

If that doesn’t convince you, I don’t know what will.

Conversions stayed the same at 20%, fees were also the same, but the order value went up.

For the first time, we also didn’t run out of stock on any of our products during December. This time, we marked on the calendar to pad up our best selling inventory to last us through Q4 and Chinese new year.

But how do you know your gross margins and inventory levels are effective.

This is where GMROI (Gross Margin Return on Investment) comes in.

GMROI = Gross Profit / Inventory

This is something I’ve implemented recently to track the effectiveness of our inventory.

It achieves two things:

  1. shows you a single number which I can relate to inventory valuation
  2. shows you how effective the inventory is working for your business

No one wants excess inventory, but because of growth, how do you know what is a healthy amount of inventory?

The higher the GMROI, the quicker your inventory turnover is, and your cash is not being locked up in inventory.

The lower the GMROI, the slower you are selling and more cash is being locked up.

In retail, a rule of thumb is to have a GMROI from 2.5 to 3.2. This means that for every $1 of inventory, it generates $2.5 to $3.2 in gross profit.

For our Q4 numbers, we did around $600k in sales and our inventory value was $170k.

Our Q4 GMROI = 600k/170k = 3.5

2019 annual GMROI was between 12.5 to 14.7 depending on how I calculate the average inventory. But I’ll use 12.5 to be on the conservative side.

12.5 is a healthy number, but I know we can do better considering our small size.

I should be aiming for a quarterly GMROI of 4. This means that Q4 should have achieved either:

  1. sales of $680k or
  2. inventory value of $150k

The answer is that #2 should have happened. I overstocked some items and also had underperformers.

I find this to be easier than calculating Inventory turnover or Days Sales in Inventory (DSI). It doesn’t make sense to track only the inventory value as it doesn’t mean anything on its own. It needs something to be measured against to be effective, and in this case, it is gross profit.

As usual, I find it important to compare against public companies because that’s the type of group I want to visualize competing against.

No point in feeling good when you compare yourself with weaker competitors.

  • Proctor & Gamble (PG) annual GMROI = 6.4
  • Helen of Troy (HELE) annual GMROI = 2.1
  • Nike (NKE) annual GMROI = 3.1
  • Target (TGT) annual GMROI = 2.3
  • Apple (AAPL) annual GMROI = 23.9
  • Johnson & Johnson (JNJ) annual GMROI = 6.3
  • Johnson Outdoors (JOUT) annual GRMOI = 2.65

Apple has an exceptional GMROI of 23.9. That’s elite.

Above average is 6.0+.

Looks like bigger established companies happily fall between 2.3 to 3.1.

We are looking good, but our small size makes us look better than we really are. Despite our tiny size compared to Apple, they are kicking our butts.

If you use this metric, make sure your inputs are consistent with comparables. Don’t compare annual to quarterly and vice versa.

Financial performance benchmarks

Here are some broad numbers of how 2019 went down.

  • COGS was 23.3% compared to 26.1% in 2018 ✔️
  • Amazon fees came down to 40.6% of revenue compared to 42.4% in 2018 ✔️
  • Gross profit of 32.9% vs 28.6% in 2018 ✔️
  • Amazon ads increased to 12.4% vs 10% in 2018 ❌
  • Total operating expenses came to 25.5% vs 23.8% in 2018 ❌
  • Operating margin was 7.3% vs 4.8% in 2018 ✔️

The biggest improvement for us is the reduction in Amazon related fees as it makes up a huge chunk up for all Amazon businesses.

2018 was a bad year where costs got out of control, and in 2019 we saved money by eliminating bad products that we had to continually discount and promote to liquidate.

As I noted above, this was the first year we didn’t run out of anything in December. We projections were right on target using our inventory forecasting calculator. You need at least 1 year of sales history to make it work.

This helped lower our storage costs as we didn’t have excess sitting at the FC and we were able to take advantage of Amazon’s discounted rates for keeping products in stock at optimal levels.

It also helped us improve our replenishment by sending in pallets. We weren’t rushing to catch up and having to send via UPS.

The savings from planning ahead and sending pallets were huge. Especially if you sell heavy stuff like we do where the cost per pound via UPS adds up quickly.

For 2020, my goals are:

  • COGS of 22% vs 23.3% in 2019
  • Amazon fees of 40% vs 40.6% in 2019
  • Gross profit of 34% vs 32.9% in 2019
  • Amazon ad spend of 12% vs 12.4% in 2019
  • Total operating expenses of 25% vs 25.5% in 2019
  • Operating margin was 9-10% vs 7.3% in 2019

China tariffs still ongoing

Sales from our made in China products made up close to 1/3 of our total revenue.

This is where we want it to be as it gives us some protection from geopolitical risk. If the trade war doesn’t get any better, we can switch to our manufacturers in other countries.

You know that you should have a backup plan for Amazon, and it’s the same for China suppliers. Tariffs on most products are now at 20-25%. Margins are feeling it.

I like to have a backup supplier that can take over manufacturing and switch production around as needed.

Manufacturing in EU was easier than I thought. The downside is the slow speed and the time difference. European companies aren’t as proactive and fast to respond as Chinese manufacturers. You need to fly over and hash out all the details to get things moving.

Books I read in 2019 to become operations and execution focused

I’m building up my team to be operational experts because if the business operates efficiently and can execute on tasks, any business can get to 7 figures.

I also realized that getting from $1M to $10M in sales is simply scaling products more than anything else.

If the operational bedrock is solid, it makes scaling easier and faster.

I see from Facebook or forum questions that most sellers are focused on product expansion before they are ready, or they are limited to thinking about day to day sales and not beyond. Not many sellers address setting up a strong operational foundation where they could remove themselves from the day-to-day stuff and keep it going automatically.

Here are the books that helped me in 2019.

Sam Walton: Made in America

December FBA monthly update at $252K 23

Walmart back in the early days was much different than today.

The way Sam Walton built the business, his philosophy and the way he implemented it provided great insights into areas of our business. It also reminds me of Amazon as I was going through the book. Eerily similar in how Walton and Bezos go about business.

Execution: The Discipline of Getting Things Done

December FBA monthly update at $252K 24

A classic.

This book is strictly focused on execution, A.K.A getting things done.

I bet you have a massive list of stuff that needs to be done, but how can you make sure it’s done properly, on time and people take accountability for it?

What good are sales and marketing if people don’t understand how to execute it?

That’s what this book is about, and although the examples are outdated, the framework remains true, the questions and the way scenarios are analyzed feels like I’m going through an elite MBA.

I naturally lean on the operational side and I got a ton out of it. I know if the operations are not set up properly or lagging the growth, employees are overworked and stressed and it prevents the business from scaling.

The Goal: A Process of Ongoing Improvement

December FBA monthly update at $252K 25

I shared this in my email newsletter and here’s what I said.
I wish I read this book when I first started my business. I’m about 10 years too late, but better late than never.

I find too many business books to be full of fluff pieces and mainly written to market themselves. Namely, putting F*** in the title seems to be the rage nowadays.

The Goal is different. It’s a classic.

It’s a business novel and that makes the reading easy, fast, highly enjoyable and practical.

I was skeptical in the beginning because it seemed so basic, but as it went on, new concepts and complex situations were introduced. Kept getting better and better.

The book takes place in a manufacturing plant, but don’t let that fool you. It’s applicable to any business as it introduces you to the concept of:

  • Throughput
  • Inventory
  • Operational expense

“A plant where everyone is working all the time is very inefficient.”

If you want to know what the above quote means, read the book 🙂

By the end of it, I could see many ways it paralleled running an Amazon business and I started to think of how to implemented some changes in our operations from the ideas in the book.

Checklist Manifesto

December FBA monthly update at $252K 26

Technically, I’ve had this book for a long time and applied in finance, but it’s just as good for Amazon.

I tend to have a lot of SOP’s (Standard Operating Procedure) for all the aspects of running our business, but sometimes the SOPs are too long to go through. And having a short checklist helps.

We use Trello to create a list for a particular process, and then add cards and checklists. You can then link the Trello cards to the SOP for people that need deeper instructions.

I want to take myself out of managing Amazon and going through the listings to make sure it’s done properly and to do that, I need to put what I know in a granular step by step checklist so things don’t get skipped, missed or done incorrectly.

The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

December FBA monthly update at $252K 27

This book was recommended by Warren Buffett (he is one of the CEOs).

Here are the quick points [with my comments].

  • Capital allocation – CEO’s most important job. [Not packing or doing design work. Bezos is not spending his day removing backgrounds from photos.]
  • In the long term, the increase in per-share value matters. Not overall growth or size. [Work towards long-term profitability. Being the biggest company that is losing money is not desirable.]
  • Cash flow, not reported earnings, is what determines long-term value. [Cash drives earnings. Earnings can be manipulated. Cash is king.]
  • Decentralized organizations give an entrepreneurial spirit. Keeps costs and “rancor” down. [Amazon is a classic example.]
  • Independent thinking is essential. Listening and pandering to outsider advisers [gurus, Wall Street, Facebook, media] can be distracting, time-consuming and wrong.
  • Sometimes the best investment opportunity is in your own stock.
  • Acquisitions: patience is a virtue and requires boldness.

Wholesale and our online store

Our wholesale revenue grew as we added another good size account.

Back in 2013-2015, we used to do a lot of tradeshows in WA to pitch our products and that’s where we:

  1. discovered our pitch
  2. realized some products sold best via sales pitches

Another seller in the tradeshow business noticed that we were coming regularly to the shows but he didn’t see us anywhere outside the greater Seattle area. So he offered to take over the tradeshows for us.

Their main distribution channel is via tradeshows, it is a win-win for both of us. I can focus on online sales and they focus on tradeshows.

This created more visibility of our products and we’ve gotten into more smaller stores and attracted more people who want to also sell our products at shows.

Now we are trying to expand presence to the East Coast where the majority of the population lives. Now we have to figure out how to execute it as I don’t want to be on the road every month exhibiting at East Coast shows to land a distributor.

Let’s see how 2020 turns out.

New Gorilla tutorials

To provide better information on how to better use the Gorilla functions, we have been writing tutorials and examples in more detail.

Free FBA spreadsheets for all

If you have messy sheets and need something refined to help you run your numbers, get the free Amazon spreadsheets.

pro spreadsheets fba pricing

You can download it immediately without having to sign up for anything.

Just copy straight to your account.

If you want to get updated data straight into your own Google sheets, you can use Gorilla ROI. It makes work so much easier when you don’t have to manually update data or log into accounts constantly and wasting time.

October FBA monthly update at $202K

October FBA monthly update at $202K 28

The numbers and information I share in these monthly updates are selective and for educational purposes.


Let’s kick it off with some October highlights.

  • Ended October with $202,400 in revenue.
  • 20% growth from last year
  • Conversion rate of 20.5%
  • Met with our EU manufacturer to finalized new products
  • Initiated contact with new suppliers and products outside of China
  • Continuing to execute liquidation strategy

These are the lowlights for October.

  • Gross profit down to 23% – due to liquidating losers
  • Several new products not meeting expectations
  • Amazon EU continuing to lose money
  • Still a lot to learn with Facebook ads

October FBA results

October is the calm before the storm.

October FBA monthly update at $202K 29

Q4 is here and consumer confidence is still high, despite what the media says about the economy.

November, December, and January are always our best months. For whatever reason, our sales are strong throughout Q1. It all depends on the product mix, and before the factories in China go on holidays, we’ll have to submit new PO’s to take us through to Q2.

Revenue is up 20% consistently. The growth rate hasn’t fluctuated over the past few months I’ve been reporting these numbers. Despite not having any winning launches this year, the steady growth is welcome.

October FBA monthly update at $202K 30

A lot of it is a result of continually updating images, creating videos, adding EBC content and other strategies to improve conversions. I wrote a lot about what we were trying to do related to conversions last month.

If you look at this screenshot for October, you’ll notice a few things.

October FBA monthly update at $202K 31

  1. Units ordered only increased by 7%
  2. The average order value increased by 12%
  3. Which results in sales growth of 20%

Small improvements make big changes so it’s always important to continually tweak and optimize.

Never stop optimizing.

Throughout the year, we’ve updated nearly every image for products that sell decently and is profitable. Despite having photos and listings that have performed admirably in the mid to high 20% range, overhauling the images has bumped the conversions for some of our best sellers. On some products, I hadn’t updated the images in 5 years, so it was time.

Gross margins took a hit this month because we sold off a good chunk of inventory at big discounts. It’s certainly better than getting nothing for it or losing money off it.

If you have products you are trying to liquidate, look into utilizing Facebook ads and groups. You can do big discounts and still come out ahead vs selling to liquidators.

Our best seller is continuing to do better and we are working to make it do even better. The conversion rate for this single product was 51.5% in October.

The number 2 product is 17.2% and the number 3 product is 29.2%.

Product #2 needs improvement for sure.

Moving more manufacturing outside of China

From when we first started on Amazon, there have been 2 product families that we designed and introduced to the market in the home and kitchen category. These two products (and the variants) have been copied like the plague.

October FBA monthly update at $202K 32
Copycat. Get it?

Unfortunately, we’ve lost our first to market advantage and sales have plummeted from when we first started selling.

Then throw in sabotages by other sellers and it’s a pain in the neck.

After having experienced these copies and attacks, it’s so important to go through the extra effort of creating products that China can’t copy. and also try to get trademarks and patents in China and utility patents in the US.

With that in mind, my wife and I visited our European manufacturer in October to finalize the details of a new product for our oral care line.

If you’ve done business with EU timezones, you know how hard it is. Literally 10-12hr difference.

So far we have spent the last 10 months via email, video calls and shipping samples back and forth. Finally, we couldn’t take it and added an extra leg to our holiday plans to visit the manufacturer first.

If you do volume or develop your own products, you can’t go wrong with visiting and hashing the details in person.

Over 2 days, we managed to finish what would have taken another 6-12 months of back and forth via the internet.

Another reason why I enjoy visiting manufacturers is because I get to see the showroom, get ideas, and learn about new trends. Manufacturers are always the first to witness new trends based on what customers are selling the marketplace.

This is something you don’t know about until you visit in person.

From this visit, we’ve identified a couple of products with great potential, on a growing trend, that China can never compete with. More research is needed for sure, but it checks off a lot of boxes.

This brings me to the next topic.

Execution focused

I finished a book titled Execution: The Discipline of Getting Things Done. It’s a classic.

October FBA monthly update at $202K 33

There are truckloads of books on sales and marketing and the same fluff gets tossed around from one book to another. For all the sales and marketing books out there, there isn’t much on execution.

Especially one written by a former CEO and chairman of a fortune 500 company.

What good are sales and marketing if people don’t understand how to execute it?

That’s what this book is about, and although the examples are outdated, the framework remains true, the questions and the way scenarios are analyzed feels like I’m going through an elite MBA.

I naturally lean on the operational side and I got a ton out of it. I know if the operations are not set up properly or lagging the growth, employees are overworked and stressed and it prevents the business from scaling.

I strongly believe that too many FBA sellers and small businesses in general, fail or can’t get beyond 5 or 6 figures because they don’t understand the importance of operations and execution.

If you are serious about your business or your role in your company, get the book and act on it.

October FBA monthly update at $202K 34

Basic explanation of Facebook liquidation

If you find yourself needing to liquidate, here’s a basic idea of how we are doing it with Facebook.

First, calculate the price. Here are some simple calculations.

Let’s say your product landed cost is $2. It retails for $10.

Liquidators will offer you $0.05 per unit.

The concept to remember is that $2 should be your max loss. This means at $2, it is a 100% loss.

Your landed is $2. If you donate it or dump it, you lose $2 per unit.

If a liquidator offers you $0.05, you are losing $1.95. Better than losing $2, but not worth the effort to orchestrate the liquidation for only 5c per unit. Likely more cost-effective to donate it.

What we’ve been doing is running a 75% discount code and then running ads on Facebook.

By the time the product gets to Amazon, let’s say the total is now $6 after shipping and FBA fees. It doesn’t make sense to sell it at $10 with a 75% discount. I’ll lose more than $2, which is worse and more stupid.

So now, we jack up the price to $20. With a 75% discount, the final sales price the buyer pays is $5.

Since the cost of the product to get it to Amazon and after fees is $6, the math is now simply $5-$6 = $1.

Instead of losing $2, I now lose $1.

Since I’m trying to liquidate, I don’t care if codes are shared with others. In fact, it’s better if it does.

But as I alluded to last month, using this tactic pushed one of the lesser competitive products to be on the first page of the search results and creating organic sales.

What turned out to be a liquidation, ended up being a discounted launch. If it keeps selling and sales increase, looks like I’ll have to order more and flip the strategy on its head.

2019 Q4 Plans

Since it’s November already, if you have products that can also be targeted as gifts or something holiday-related, it is a good idea to create a separate “holiday” PPC campaign. Target keywords related to the holidays that your product can capitalize on.

If I were selling plates, I could target keywords for things like Thanksgiving Dinner Plates or party plates. You get the idea.

Update packaging to liven it up for the season or bundle it with something festive. Easy low hanging fruit.

This is how you can get more eyeballs to your listing and double up revenue. Non-US sellers won’t know about such terms and the proper cultural terms. Use it to your advantage.

Check reviews consistently

If you use another software to check reviews, you can do it easily with Gorilla ROI as well.

October FBA monthly update at $202K 35

We’ve updated the GORILLA_REVIEW function so that it will list the latest reviews from latest to oldest.

Before you had to define the ASIN which meant you only got the reviews for a single product at a time.

Now you can list it all using:

=GORILLA_REVIEW()

October FBA monthly update at $202K 36

If you want to load more than the default 30, use a formula like below to list the latest 50.

=GORILLA_REVIEW(, , , 50)

We’ve also made changes in the algorithm to get reviews matching your child SKU.

If you have variations, reviews are not tied to your parent ASIN. This way you can check the real reviews of your child products.

Wholesale and our online store

Wholesale revenue is up again. On a nice roll this year. Based on the number of accounts signing up and having success with the product, 2020 for wholesale looks bright.

We’ve been experiencing challenges different to FBA as we are account representatives for the wholesale customers.

Margins are great and really help to offset the thinner margins from Amazon sales.

None of our wholesale accounts sell on Amazon. I had an FBA buyer contact me claiming they had a storefront.

Looking at their address, I could tell it was just a basic office address. But I wanted to check their website and I got a good laugh.

October FBA monthly update at $202K 37

That’s the “storefront”.

There are “gurus” who sell the idea that having a storefront will make it easier to get products at wholesale.

True to some extent, but it shows what people are trying to do to fake it till they make it.

A quick analysis of their website reveals zero history. Must have recently started.

October FBA monthly update at $202K 38

Since we handle all Amazon sales directly, resellers do not offer any value for us unless they sell through another channel.

Keeping up with what guru’s try to sell people is a good way of zigging when others are zagging.

New Gorilla tutorials

To provide better information on how to better use the Gorilla functions, we have been writing tutorials and examples in more detail.

Check out the ones below that have been published. More are coming.

How to get Amazon ASIN, SKU or FNSKU 

How to load FBA inventory data into Google Sheets 

Free FBA spreadsheets for all

If you have messy sheets and need something refined to help you run your numbers, get the free Amazon spreadsheets.

pro spreadsheets fba pricing

You can download it immediately without having to sign up for anything.

Just copy straight to your account.

If you want to get updated data straight into your own Google sheets, you can use Gorilla ROI. It makes work so much easier when you don’t have to manually update data or log into accounts constantly and wasting time.

I hope you enjoyed the monthly update and got some ideas that you can take with you.

September FBA monthly update at $210K

sep 9 2019 fba amazon sales

The numbers and information I share in these monthly updates are selective and for educational purposes.


Lots of action in September, so let’s not waste any time and get straight into it.

It also marks the end of Q3.

Here are the September highlights to start.

  • Ended September with $209,820 in revenue.
  • 20.8% increase vs last year
  • Gross profit 40%
  • Conversion rate of 21.4%
  • Diversifying away from China
  • Finally found a liquidation strategy that worked

There are lowlights as usual, but not as bad compared to earlier in the year.

  • Newest product hit with 25% tariff
  • Amazon UK losing money and Brexit looming
  • Increase in fixed costs
  • More SKUs = more work

September FBA results

September FBA monthly update at $210K 39

We are well short of the $300k/mo goal and ended at a little under $210K. However, we are putting into place new strategies that should get us close, if not meet the goal by the end of December.

I explain the overall strategy in the “liquidation” section below. Same concept.

Revenue is up 20% compared to last year, but what I like more is how our gross profit margin is holding up strong.

Our net profit needs more work as we continue to cut out fat in operations and automate more of our workflow so that more profit drops to the bottom line.

Our best seller continues to chug along and in September, this product alone had a conversion rate of 50%.

This brings me to the next point.

Re-prioritizing conversion

Overall, our account as a whole achieved a 21.4% conversion rate.

Conversion rate for September
Conversion rate for September

If you have good private label products, then the conversion rate is around 15-30%.

Don’t quote me on that, but that’s the range I believe it should be in, and the range from talking with other sellers.

I do have lower converting products than the 20% cutoff that needs more attention and love.

If you are a reseller of branded products, then your conversion rate can easily be in the 30-70% range depending on the strength of the brand.

September FBA monthly update at $210K 40

E.g. if you were authorized to sell Apple Airpods, then your conversion rate hovers close to 70%.

September FBA monthly update at $210K 41

This is straight from Amazon’s brand analytics page. #2 in the search result for “airpods” gets a measly 5% conversion.

That’s why conversion is the name of the game and the area that we are re-prioritizing in Q4 and the plan for next year.

Focusing on marketing

September FBA monthly update at $210K 42

For much of last year and early this year, we were slammed with creating new products. The bad thing is that none of them did as well as I hoped.

No big winners as you can see from my monthly updates. No big jumps.

Because we got scattered, our marketing flailed and fizzled out. Then the passion behind the products died as the ROI didn’t materialize.

Consider that we could have spent some of that energy and resource into better marketing, advertising existing products and re-launching existing products.

It would have been a whole different story.

I prefer to sell more of a single product than spread myself thin. Prefer going deep into smaller product lines vs selling thousands of SKU’s with only a couple of units moving per month.

Conversion optimization is a long topic and most of it is straight forward. It just takes a lot of time and effort to figure out, implement, test and verify.

  • Review keywords and update titles as needed to rank better for stronger and bigger keywords
  • Test prices
  • Spice up images that trigger emotions
  • Create Enhanced Brand Content
  • Create videos for added trust
  • Get reviews

September FBA monthly update at $210K 43

These are basic stuff but there are so many steps before you get to do it. That’s why many sellers overlook analytics and conversion optimization.

  1. You can’t automate it
  2. It’s a lot of work
  3. Takes a long time to do properly

It’s exciting and sexy to source new products, as opposed to polishing an existing item over and over again.

That’s why we are looking to build a better internal system for marketing and improving our conversion optimization process. All products must be consistently marketed, optimized and reviewed.

Never settle.

Diversifying away from China

September FBA monthly update at $210K 44

Our products were safe from the tariff hikes as it was outside the targeted categories. Come December, it changes for everyone, but we felt the first hit in September when our newest product was pummelled with a 25% classification.

Bye-bye profit.

September FBA monthly update at $210K 45

I still believe that this particular product will do well because of how unique it is, and our patents will protect it for years to come. However, it isn’t easy adding another 25% on top of the COGS.

It leaves less room for error, advertising, operations, experimentation. Sales volume has to be big in order for us to come out on top.

Luckily for us, we’ve always diversified our manufacturing. In hindsight, my wife is the genius because she knew that every country is a leader for something.

She figured out early to find the best country for the product we wanted to make, rather than doing everything in China.

  • Our main home category products are made in China
  • Our cleaning products are made in USA
  • Our skincare comes from Korea
  • Our newest foray into oral care is manufactured within Europe

With the different manufacturers already set up, it’s a matter of dialing up the sales from the non-China suppliers. Easier said than done though.

Liquidation strategy that works

Ever bought a container load of stuff that didn’t sell?

I have.

The annoying part is that I have to see my mistake e.v.e.r.y.d.a.y and remind myself of the bonehead mistake.

Oh, can’t ignore that it takes up a huge amount of space making it costly to keep on hand.

September FBA monthly update at $210K 46

I’ve tried to liquidate in many ways over the years.

  • Give crazy deals to wholesalers (they couldn’t sell it too)
  • Give it away for free as promotional items
  • Combine it as part of a bundle
  • Sell it on eBay
  • Contact liquidators

So far, none of them worked out for one reason or another.

Liquidators literally offer you 2-4% of the retail price, which is the same as an insult. It’s more work to get it ready for them than the money they pay.

As a last resort, I tried putting it up on Facebook.

September FBA monthly update at $210K 47

Instead of just posting randomly on Facebook and hoping somebody found the post, we created a campaign to offer huge discounts for people to buy straight off Amazon.

It looks something like this.

  1. Create a huge discount coupon from Amazon
  2. Set up a storefront or a landing page showing the discount along with the products
  3. Create the ad images
  4. Set up the automated Facebook messenger marketing sequence
  5. Create and publish the ad

The objective was to liquidate product so it didn’t matter if a code was shared in other Facebook groups.

But that’s exactly what happened and the entire FBA inventory we had was wiped out by the time I woke up.

September FBA monthly update at $210K 48

There wasn’t much inventory at Amazon to begin with as it sold so slow. Hundreds were fulfilled by us via FBM and then we decided to shut it down temporarily until we could prepare better.

If we run more liquidation sales, you’ll see a jump in the reports, but at the same time, the gross profit won’t keep up.

However, knowing this method works means that I’ll finally be able to clear up space in the warehouse and get something back from the dead inventory.

The math is simple.

If my landed cost is $2, my goal of liquidation is to lose less than $2.

If I lose more than $2 using this method, it’s cheaper to throw or give away. The max I should be losing is 100% at $2. Not more.

So far, I was able to make $0.90 per item after all COGS and expenses. So the math tells me I lost $1.10 which is 10x better than what liquidators were offering.

But wait, there’s more.

The side-effect of the huge boost in sales velocity, even though we offered it at 75% off, was that organic ranking increased for some of the products.

Discounted giveaways seem to work. It doesn’t have to be 100% full-priced.

My team will be running more tests to verify this, but if this is true, I may end up having to reorder if I start to rank and sell organically.

September FBA monthly update at $210K 49

It’s going to be exciting and will make product launches easier and faster.

Those were our highlights. Now the lowlights.

Amazon UK sales

This is the part that pains me as I want to melt away into the corner.

Oh well. Picking at scabs is fun sometimes.

Last month I went over our Amazon UK story.

The plot thickens now.

We applied the same liquidation strategy via Facebook for the UK product. Because the listing has one 1-star review, even the liquidation doesn’t work.

No one wants to get it for 75% off. The English and Europeans are much pickier than US shoppers I’ve found.

Then Facebook users started to suddenly mass “unsubscribe” to the messenger bot which triggered Facebook to unpublish our brand page which shut down the ads.

September FBA monthly update at $210K 50

Amazon UK is becoming the bane of my existence.

Now throw in the looming Brexit with thousands of dead inventory.

There is a lot of uncertainty in the air and the worst-case scenario is that everything out of UK will be considered an export. This means higher costs for everyone.

It’s a lose-lose at this point and I can’t wait to get out. At least I can say I’ve tried.

Increase in fixed cost

One of the big deals for us in September was finally moving into a much bigger space.

Our new office is 3x the size of our previous place.

This means:

  • expensive lease
  • more insurance required for everything
  • more utilities
  • big “corporate” property management companies to deal with
  • more expenses that add up

Fixed costs alone related to property, plants and equipment (PP&E) has increased 2x.

September FBA monthly update at $210K 51

Seeing how revenue didn’t increase 2x, it’s motivation to focus hard on generating more sales to offset the added increase.

This is the first time in 7 years that we’ve had everything under one roof so I’ll be able to make some of that back via improved efficiency. Soft and hidden costs should always be factored into your ROI too.

New SKU’s for the end of the year

Don’t mix up SKU’s with an actual product.

Above I said we have stopped the development of new products. Instead, we are making new bundles and combinations of existing products to target new keywords.

Many of our products can easily be applied to different markets. By repackaging it and making a tiny change, we can create new SKU’s from the same product. By doing this along with various new bundles, we can market horizontally and vertically.

That’s still a lot of work to get up and running.

Preparing for Q4

With the added tariffs coming up, it’s time to put in orders to try and get as much in before the December cutoff. China factories are getting backed up, so if you haven’t planned, be sure to stay on top of your numbers.

inventory sheet screen
Inventory tracking and monitoring stats

From our Amazon Business Spreadsheet package, an inventory monitoring spreadsheet will help you keep an eye on velocity and the seasonal forecast calculator helps to know what to expect with upcoming months.

Seasonal sales and inventory forecast calculator
Seasonal sales and inventory forecast calculator

I have some PPC campaigns that will be re-activated soon, made specifically to target holiday shopping intent. It does very well during Q4.

We’ll also be rotating campaigns to target the different occasions that occur from now until Valentine’s day next year.

Overall, with our team and systems put into place, it’s mainly housekeeping from now until next year and to focus on maximizing sales and keeping inventory in stock.

The worst way to lose money is by going out of stock during the best shopping season of the year.

Wholesale and our online store

Thanks in large part to our growing wholesale business our margins are fattening up.

This side continues to grow and I’m working to come up with ways to help our wholesalers sell more. Hopefully, we can grow this side of the business to offset the Amazon side of things.

The beautiful thing with wholesale orders is that orders are large, business is sticky, it’s efficient and much easier to manage.

Finding the right distributors and partners to expand to other territories is the difficult part to set up.

Free FBA spreadsheets for all

If you have messy sheets and need something refined to help you run your numbers, get the free Amazon spreadsheets.

pro spreadsheets fba pricing

You can download it immediately without having to sign up for anything.

Just copy straight to your account.

If you want to get updated data straight into your own Google sheets, you can use Gorilla ROI. Makes work so much easier when you don’t have to manually update data or log into accounts constantly and wasting time.

Hope you enjoyed the monthly update and got some tips that you can take with you.

August FBA monthly update at $216K

2019 August amazon fba revenue

The numbers and information I share in these monthly updates are selective and for educational purposes as there are people I know personally who read this. Also to keep trade secrets and sensitive information under wraps.


It’s over.

Slow summer sales.

August Amazon revenue closed at $216K compared to $200K in July and I’m seeing an uptick in sales already.

I’ll share what went right and wrong in August and a look at our Q4 preparations as the calendar races towards the end of the year.

Without further ado~

August FBA results

For all the talks of the economy slowing and an upcoming recession, we aren’t seeing the effects yet. People continue to shop and our sales are coming in at a steady pace.

  • Compared to last month, sales are up 8%.
  • Compared to last year, sales are up 17%.

17% is low compared to our previous growth of 75-100% range the past 3 years.

But I like it.

It’s good for our current objective as we try to scale down the number of products to focus on higher conversion, improving margins, streamlining operations and diversifying to other channels.

This is similar to what happened for us from 2014 to 2018. We built the foundation to support the massive growth that followed. From all the projects and ideas we are trying to execute, I believe it’s laying the foundation for another strong platform of big growth.

PPC spend over the past couple months has hovered at 11%. My benchmark is to keep it to 10%. Every percentage point plays a big role to the bottom line when it comes to Amazon selling.

august 2019 PPC spend
July and August 2019 PPC spend

I’ve had questions whether I use an automated PPC software that you see everywhere lately.

This is something I’ve tried, tested, pondered and decided against.

I see the benefit and the beauty of automating PPC, but there’s a limit to how much a software understands the logic and objective of a seller and is able to keep up.

If you have products that don’t need refinement, and no adjustments other than bid tweaks, automated PPC can work great. But if you are applying advanced techniques and strategies, it can worsen your results.

I’ve used Sellics in the past and found that it was making bids and adjustments that were wrong. Had to go in and manually fix those again. Defeated the purpose of what I was trying to do.

The numbers and methods I use to analyze my numbers are also different to what software provides, so I end up having to do it manually again.

Gorilla ROI does not support PPC data, but with the PRO Amazon business templates

  • I copy over my PPC report
  • combine it with the Gorilla Sales function for any period I want
  • get and easy to understand, actionable table of results.

Streamlining operations

August FBA monthly update at $216K 52

We try to run a lean operation. Anything that can be automated, I want to automate.

During the early years, my biggest failure and hurdle was getting over my “save cost” mentality.

I grew up with frugal parents and my nature is to save where I can. I would go 20 minutes out of my way just to save $1. Whether it be for milk or coffee. Even though I could buy it directly next door to where I lived.

In areas of business, I preferred to spend 1 hour a day to manually fulfill orders. Spending $60 to automate, simplify and streamline operations was a ghastly idea. Not when I could spend 1 hour doing it myself.

Here’s some math to show what I mean.

  • 1 hour a day = 5 hours a week (assuming M-F) = 20 hours a month
  • 1 hour = $15/hr = $300 value of labor per month (see how little I valued my time?)

Cost of multi-channel fulfillment for my size at the time = $60/mo.

I was so proud of “saving” $300, but in reality, I was losing 20 hours a month + $240 + opportunity cost of new growth.

That’s the secret way of losing money in business. Wasting your time on tasks that don’t add value.

August FBA monthly update at $216K 53

This summer, we’ve created more systems and processes in addition to the software and tools I wrote about before.

  • Replaced laser printers with thermal printers. One thermal printer for each purpose. No need to waste time switching labels or rolls.
  • Rearranged layouts to improve picking, packing and shipping.
  • Integrating Zapier into as many processes as possible. All emails, tickets, orders, notifications, messages, invoices that come in to our system get filtered through Zapier first and then sent to the correct place. No longer dependent on a person to forward information to the correct person.
  • Automated accounts receivables follow ups. Turns out Quicken has implemented this feature which I didn’t know about. Payment and overdue reminders are sent at appropriate intervals to customers. No more chasing people on the phone until it hits the 30/60 day overdue threshold.

These are just some of the areas we’ve streamlined and I’m looking to do more.

Amazon UK sales

August FBA monthly update at $216K 54

We started selling on Amazon UK in Q1 of this year, and it looks like we’ll have to pull out.

Whether international Amazon marketplaces work for you will depend on the product you are selling. I realize for international markets, having higher priced items is key. Despite having grown the account to 5 figures a month, it’s eating up money and racking up losses so far.

The majority of our products are supposed to be priced between £10 – £15 but had to mark them down to try and get it moving.

Then consider, the pricing includes VAT, so after factoring the following, margins are super tight at best and negative throughout.

  • VAT and compliance
  • Freight
  • Product cost
  • Amazon fees
  • Marketing
  • Returns

The problems with our UK account is that a single 1 star review has nuked the one of our flagship products. It’s the same product that sells fast in the US, and we sent in large pallets assuming it would do just as good.

That one start review has annihilated the listing.

1,500 units of dead inventory. Ouch.

Even slashing prices does not work as people only look at that single review.

Unless you have mega fat margins to begin with, if your product depends on volume it’s a tough nut to crack.

Fattening margins

August FBA monthly update at $216K 55

There are 4 ways that work to fatten margins on existing products.

  1. decrease cost
  2. increase prices
  3. improve conversions
  4. bundles

Decrease Cost

We’ve decreased our packaging cost, working on optimizing carton sizing and the way products are put inside the carton.

This all adds up and brings in large savings.

Increase Prices

For products affected by tariffs, we have to pass it to the customer. As Amazon is a convenience platform, there has been no push back so far.

Improve Conversions

Our peak conversion rate was in 2017 where it was in the low 30% range.

Competition has lowered it to the low 20% range.

amazon conversion rate
Our Amazon conversion rate

The higher the conversion rate, the faster the cash flow, the better the prices from suppliers. All leads to fatter margins.

Bundles

As we slow down development of new products, we’ll be shifting towards creating different bundle variations with our best selling products.

As our products are based on families, it’s easy for us to mix and match to create an assortment of bundles. The margins are bigger and I sell more of the same product. Win, win.

Sales vs profit

August FBA monthly update at $216K 56

A mini rant. Feel free to skip.

There’s so much bad advice on the internet. Especially on the topic of sales vs profit.

If you are looking for a quick buck because you heard FBA is the next gold rush, then you deserve to lose your money.

If you are serious about selling as a real business, define what your goals are and don’t expect to take a salary for a while. There are no excess profit as your grow.

Newbies and small sellers who stay small, focus on how much they can take out of the business before they have even scaled.

In the beginning, I was so focused on saving pennies that I missed opportunities.

The gorilla size sellers do something that’s unheard of for small sellers: reinvest, scale and build equity to reap the rewards later rather than now.

They plow money back into the business to:

  • try different products
  • implement new strategies
  • go to networking events
  • spend on self improvement
  • break through plateaus
  • hire
  • scale
  • upgrade equipment, services, training
  • acquire new leads and penetrate different channels

Next time you read a comment on the internet asking “but what about your profits?” ignore them because they have already lost the forest for the tree.

I’m currently running on low margins, but if taking out as much money from my business was the goal, I could literally fire everyone, stop selling at trade shows, cut out excess fat and start coasting on cruise control to take out 30% in cash every month.

Don’t fall for the same small minded thinking that plagues most small sellers and beginners.

Preparing for Q4

August FBA monthly update at $216K 57

I talked about improving conversions above but the added benefit is the increase in sales velocity. Amazon gives you better visibility in the results and pushes your product.

We’ve seen our best selling product increase in sales by 20% over the past month and to anticipate the Q4 sales, keeping track of inventory is pivotal.

Last year, we went out of stock for certain sku’s and missed a lot of sales. These are all hidden costs.

It may not seem like a big deal, but if I spent an extra $200 on improving our systems, we would have been able to capture anywhere from $2,000-$4,000 in additional sales for this single item.

With our new improved inventory spreadsheet and ability to load FBA data into spreadsheets with Gorilla ROI, everyone on the team knows the inventory level that needs to be maintained.

This has made ordering and keeping stock levels much easier. No sudden surprises. We can track of multiple data points to make sure we are ready for sudden spikes.

If you have issues with not knowing your data and numbers, Gorilla ROI gives you full access to your data via spreadsheets. So easy and convenient.

Wholesale and our Online Store

I’m not including our direct or wholesale sales in these numbers. Amazon makes up the majority percentage.

Wholesale continues to increase YoY for us. One of the benefits of having a unique product line that we can sell at trade shows. Our best accounts continue to increase their volume helping us to diversify away from Amazon.

We want to expand to east coast cities, which means travel and shows that we don’t have the time for at this time.

Free FBA spreadsheets for all

download amazon spreadsheet

If you’re looking for free FBA spreadsheetsto help you run your numbers, you can get the templates for free.

You can download it immediately without having to sign up for anything.

Just copy straight to your account.

If you want to get updated data straight into your own Google sheets, you can use Gorilla ROI. Makes work so much easier when you don’t have to manually update data or log into accounts constantly and wasting time.

July FBA monthly update at $200K

2019 july amazon fba revenue

The numbers and information I share in these monthly updates are selective and for educational purposes as there are people I know personally who reads this. Keeping trade secrets and sensitive information under wraps of course.

The purpose of this monthly review is to organize my thoughts on the Amazon FBA side of things and reflect on the past month.

July FBA results

July FBA monthly update at $200K 58

Prime day has come and gone and I’m sure everyone’s July has a bump thanks to it.

For the month, we ended up higher than last month at $200k. Last year in 2018 July, we did $165k. A 21% increase. Nice little jump but nothing huge.

On top of that, Amazon continues to get more competitive and expensive each year. The increase in competition means we have to spend more on ads and the higher tariffs cut into our bottom line.

Top line at 20% is nice, but the bottom line didn’t increase at the same rate.

Always something to work on right?

I didn’t list any products on Prime day actually. There were a couple of products that we were hoping to have listed and showed up on the list of eligible products, but for whatever reason, when I went to activate it the following week, the Prime day time frame disappeared.

The week following Prime day drops off, so no point in running any lightning deals during the summer.

In 2017 we were heavily doing lightning deals and was able to grow our organic rankings. Every week we were listing 5-6 different items. There was no limit on how many products you could run simultaneously.

But the new lightning deal only allows you to run one of your products at a single time.

No point in doing it now.

ACoS in June was 27.98%. This comes out to 11.2% of ad spend as a percentage of revenue.

I did a short interview last month on the topic of why I don’t focus on ACoS and why it’s not a good measure.

To summarize my points:

  • don’t focus on ACoS as it doesn’t give you a complete picture
  • High ACoS could be a result of low visibility and low conversions. More visibility and higher conversion could bring it down.
  • Low ACoS could mean you have a door open for the competition to walk through.
  • Track your sku’s as a percentage of total sales (ppc sales + organic sales).
  • Adjust your spend to get it to your desired range. For us, we want to keep it at 10% of total revenue. Just a tad above our mark, but it’s a big improvement compared to our Q1 where we were spending 13% of sales.
ppc acos sales amazon tips optimization
ppc acos sales amazon tips optimization

July Happenings

July FBA monthly update at $200K 59

In this section, I can talk more small business related stuff other than Amazon.

July was stressful it’s rolling over to August.

We changed insurance companies to increase our liability coverage, but shortly after signing and getting our new policy, we received a letter stating they were going to cancel our policy because they didn’t want to insure anything related to personal care products that are applied to the skin.

We don’t do any in house manufacturing. We do contract manufacturing and all the products are under our name. But we are still classified as manufacturers instead of distributors or wholesalers. That puts us on a different risk category with insurers and they don’t want to bother with a company our size.

We have to be doing at least $10M for them to even consider it.

That’s been the struggle at the moment.

I have one of the best brokers working for us and she has been knocking on every insurer, but no one is interested.

With our move coming up in a couple of months, it’s getting down to the wire. The new landlord is a REIT firm so they don’t care who you are. The management company is a fortune 500 company, so again, they don’t care.

Some struggles of operating as a small business.

It’s why I wrote that it’s better to stay small or go big. If you are small,  you can contain operations and keep it lean to maximize margins.

If you get bigger, you get more leverage in other areas and can stand your ground.

If you are in the middle, you are in no man’s land.

Hiring and Firing

July FBA monthly update at $200K 60

As our sales increase and more work and tasks need to be completed, looks like we need to keep outsourcing where possible and planning to hire.

We just fired our social media manager.

The results weren’t there based on the how much we were paying. Doing a post-mortem analysis, I realize it’s hard to expect much results from an external person or agency that is handling too many accounts.

There’s no way they can handle work involved, let alone put in the time required to carve a strategy and implement it.

We were paying excessively for someone to just post a few times a week.

I’ll be hiring somebody or training an internal employee to do this inhouse which will be more effective and controllable.

This brings me to expanding the team. With our thin margins, there isn’t much room to hire aggressively. To stay lean, we have to outsource or hire VA’s to do the easier tasks.

The goal is to track all the work our main team does that is repetitive and easy to train. Then to outsource it so that we can focus on ROI generating and strategic projects.

Margins for July

July FBA monthly update at $200K 61

Summer sales is slow, but can’t forget that Q4 is around the corner. Product planning and ordering is required.

We have people who sell our products in different states so keeping inventory on hand is important.

New products arrived finally so we had some big bills to pay. The worst was two of our products being tagged for intensive exams at customs.

Argh…

On a cash based accounting, gross came in at 16%.

Each time I write these reports, I realize how off we are as accrual accounting shows a different picture. But cash is the life cycle of the business and good to track.

Nevertheless, if we want to sell our business one day, accrual will make everything easier and smoother.

As mentioned above, the account ACoS for July was 27.9%. We jacked up the PPC for prime day, but the increased sales make it even out.

Wholesale and our online store

I’m not including our direct or wholesale sales in these numbers. Amazon makes up the majority percentage.

Free FBA spreadsheets for all

If you’re looking for free FBA spreadsheetsto help you run your numbers, you can get the templates for free.

You can download it immediately without having to sign up for anything.

Just copy straight to your account.

If you want to get updated data straight into your own Google sheets, you can use Gorilla ROI. Makes work so much easier when you don’t have to manually update data or log into accounts constantly and wasting time.

June FBA monthly update at $182K

2019 june fba revenue
Upfront disclosure.

The numbers and information I share in these monthly updates are selective and for educational purposes as there are people I know personally who reads this. Keeping trade secrets and sensitive information under wraps of course.

The purpose of this monthly review is to organize my thoughts on the Amazon FBA side of things and reflect on the past month.

We’ll see how these posts evolve based on how you find it, and what information is helpful or not.

June FBA results

June FBA monthly update at $182K 62

I’m writing this during Prime Day. Amazon created their own sale event to fight against slow sales right in the middle of summer.

Brilliant.

I’m going to leave out what we did to prepare for Prime day for next month’s update. Don’t want to spoil the fun.

We ended the month at $182k. A 5% drop from last month. 10k sounds like a lot, but when you look at the percentage difference, it’s not as bad as it sounds or looks.

We were around 125k last year so a 45% growth in sales is great for us considering we haven’t launched any new products so far this year. Growth has come through optimizing existing products, creating different bundles, improving listings, photos and PPC.

For the second half of 2019, we have a good lineup of new products on the way with the first to arrive in July. Our product development always takes a long time because we are investing for the long term.

We don’t private label anything. Everything is OEM, meaning:

  • Custom designed
  • Mold investment
  • Patented in China and US
  • Then we launch

It starts slow, the momentum takes longer to build up, margins get compressed.

Yes it’s expensive.

But once we sell through our initial order and get the “snowball” past the tipping point and rolling down the hill, for us the hill turns out to be a very long one.

Happenings in June

June FBA monthly update at $182K 63
(That’s not me by the way)

In last month’s update, I went over some of the things we do during the slower summer months.

Things like:

  • plan and develop future products
  • update processes
  • re-train staff
  • upgrade assets
  • and improve other areas we can identify

In the past month, we’ve already executed and started most of the 5 points above.

  • We took some time to update documentation
  • Brainstorm product ideas and improvements to current products
  • New packaging ideas
  • Upgraded simple equipment to make work easier

June FBA monthly update at $182K 64

The biggest in June was our 2 week trip to Hong Kong, China and Taiwan.

We were exhibiting at an event in Hong Kong (nothing related to the Hong Kong fair or Canton fair). Once the show was over, we visited our suppliers throughout China and Taiwan.

I never look forward to China trips. It’s rough because we are traveling from city to city every few days, in factories from early morning to evening where the temperatures easily get over 104F (40C).

Not much to look around and do when you are in the industrial zones of China.

But one thing is for sure.

Every visit we make is a good move in hindsight.

There’s only so much you know when doing business over a keyboard. But when you visit in person and see the full scope, capacity and capabilities of what a factory can and cannot do, you can:

  • identify new products you didn’t think about
  • find ways to improve your current product without increasing costs
  • speed up the conversation and finish in 2 days what would have taken 2 weeks over emails
  • find out how incapable your supplier is and look for a new factory

If you are on the fence about visiting suppliers in China, I highly recommend you to.

2 years ago, we found our best supplier from a factory scouting tour. Rather than just doing it through Alibaba, this was an important product that we needed to replace with a new supplier. We set up dates with 4 factories over a 2 week period. Took trains from city to city and came away with a partner that has served us and protected our products with utmost integrity.

Having seen their facility and capabilities, we’ve scaled our production and line up with this factory.

Win-win.

On the flip side, during this same trip, we discovered how incapable one of our current suppliers were and stopped dealing with them immediately.

This is only possible when you visit and see in person.

Margins for June

June FBA monthly update at $182K 65

Margins were hit hard again in June as we made a large container purchase. Gross (using cash accounting) ended at 26%. At the end of 2019 Q2, our gross is at 29%.

Far below the 40% I am seeking. So there is a LOT of work to improve that.

The double edge sword is that as we try to gain international accounts and also create a distribution business, the margins are going to get squeezed further as we go for volume.

With Q2 finished, I’m not rating our business too highly this year.

I’d give it a 6 or a 7 out of 10 so far.

June FBA monthly update at $182K 66

  • Top line growth of 45% – pass
  • Gross margin of 26% – fail
  • New products introduced – fail
  • PPC goal – improving
  • Cash flow management – pass
  • R&D – pass

Our account ACoS for June was 26.7% which is a good improvement over the 28.4% from May. It was previously 31% in the earlier months.

Still working to get it down to 25% without affecting sales.

Overall as a percentage of sales, PPC spend was 13% by the end of Q2.

3% away from our goal which is a big task to improve.

Wholesale and our online store

I’m not including our direct or wholesale sales in these numbers. Amazon makes up the majority percentage.

Free FBA spreadsheets for all

If you’re looking for free FBA spreadsheetsto help you run your numbers, you can get the templates for free.

You can download it immediately without having to sign up for anything.

Just copy straight to your account.

If you want to get updated data straight into your own Google sheets, you can use Gorilla ROI. Makes work so much easier when you don’t have to manually update data or log into accounts constantly and wasting time.

Gorilla ROI huge performance increase

We’ve invested a lot of time and resources into supercharging the data import.

Now you can load up to 2,000 data points in a few seconds straight into Google Sheets.

Try getting that much data manually or using pivot tables and you’ll be dizzy with the amount of data you need to pull.

Enter a formula, set your parameters and boom – you are done.

This ends the June update.

Come back for the July figures to find out what we did for Prime day and how the start to the second half went.