Now I’m back in Chiang Mai it seems that there’s been a huge swing. A lot of the people I met at the Drop Ship Lifestyle event are now looking at selling products on Amazon as their business model of choice and I’ve been fielding a lot of questions. The most common question is by far:
How much profit are you making per sale?
so I thought I’d answer that here, once and for all! Here are the transaction details for one of our sales, from Amazon.
The cost of this particular product for us to buy is $5.80, including shipping to Amazon, and we are selling it at $24.99. Here is the breakdown:
- $24.99 Product Charge to customer
- -$5.80 Product cost
- -$1.00 FBA Order Handling Fee
- -$1.02 FBA Pick & Pack Fee
- -$0.55 FBA Weight Handling Fee
- -$3.75 Referral Fee on Item Price
Total: $12.87 profit per sale
So as you can see, after the initial cost of the product and the various Amazon fees, we are left with $12.87 profit, which is roughly twice the cost of our product and half as much as we are selling it for.
Amazon themselves have a handy shipping calculator you can use to predict your own profits.
Thanks for sharing this information. I’m planning on giving importing and FBA a go this year so that is helpful to know.
Its also interesting that the Dropship Lifestyle crowd are moving into FBA. Is this a logical progression from drop shipping or did many people fail to make DS work? I did look into drop shipping but importing does seem easier and more appealing – but perhaps I am missing something!
Yeah, the two weeks I was in Chiang Mai, pretty much everyone who hadn’t already set up a successful drop shipping store was looking at Amazon FBA. Some with successful stores were rumoured to be looking to sell them, when I asked, to get capital for Amazon!
Every co-working space I visited had a bunch of people huddled over amazon.com, checking best seller rankings, and conversations in restaurants and cafes were in hushed tones in case anyone else over heard whatever niche someone was thinking of entering!
To me, drop shipping looks to be best if you have lots of time, connections to the US and little money. Amazon FBA looks more appealing if you have less time but more money that you are willing to risk.
Other than Ben Brandes, I only know of one other person with a product on Amazon so there are currently way more successful drop shippers in Chiang Mai still than Amazon sellers, but we’ll see what the next 12 months brings!
I started DSL a day before I was invited to partner with ASM and ASM took off way quicker for me so I stuck with it.
That is interesting to know! I can see the appeal of FBA for sure.
I’m currently working my way through the Proven Private Label course which is a fraction of the price of ASM. ASM sounds really good but its way beyond my means so I hope PPL will help me get started.
Let me know if you are ever in Bangkok and I will have to pick your brains 😉