Batch 14

Product
Hunting
+
Margins
3rd Class
 Product Hunting

What we covered in Last Session

1. Product Research – Finding a Product

2. Product Validation – Validating/Confirming the Product idea

 Product Validation

Product Validation has 6 + 1 Components = 7 Components

1. Demand
2. Price
3. Competition
4. Amazon as Seller
5. Brand Domination
6. Seasonality or Trends

7. Giveaways (should be less than 250 - CPR 8 day giveaways for both US & UK markets)
 What are Giveaways

Giveaways Science

- Giveaways are Daily Sales of Top 10 Competitors on Particular Keyword

- We have to match those Sales – Basically Matching Sales Velocity of Top Competitors

- Think of it as Giving Free Samples to Match Sales Velocity

- Example would be - Medicine company giving free samples to Doctors – For Marketing Purpose

- Would be counted as Marketing Expense

 Giveaways

How to Calculate Giveaways

• Viral Launch
• Jungle Scout
• Helium10
 Product
ProductResearch
Research

Helium10
 Product Research

JS Web
 Product Research

VL
 Standard Size FBA Limits

Product Packaging
Dimensions: should be under 18X14X8 Inches
Weight: should be under 20 lbs. (ideally should be under 5 lbs.)

Master Carton
Dimensions: should be under 25X25X25 Inches
Weight: should be under 50 lbs.
 Amazon FBA & Referral Fee (USA)

FBA Fee (USA):

https://sellercentral.amazon.com/gp/help/external/201112670?language=en_
US&ref=efph_201112670_cont_G200209150

FBA Referral Fee (USA):

https://sellercentral.amazon.com/gp/help/external/200336920
Amazon FBA & Referral Fee Chart (USA)
Amazon FBA & Referral Fee Chart (USA)
 Amazon FBA & Referral Fee (UK/EU)
• FBA Fee (UK):

https://services.amazon.co.uk/services/fulfilment-by-amazon/pricing.html

• FBA Referral Fee(UK):

https://sellercentral.amazon.co.uk/gp/help/external/H78LW99F4XF3Z38
Calculating Margins (using FBA Revenue Calculator)
 Calculating Margins (Manually)
REVENUE = SALES - COST OF GOODS SOLD*
* COGS = Product landed cost (includes duties and taxes)

GROSS PROFIT = NET REVENUE* - COST OF GOODS SOLD

* NET REVENUE = Amazon payout after deducting all amazon service charges

NET PROFIT = GROSS PROFIT - ALL BUSINESS EXPENSES*

* BUSINESS EXPENSES = Advertisement, Promotions and Burning cost (giveaways, etc.)
 Margin
Calulations
 Margins

As an Example take costs from Alibaba – Will discuss

sourcing in detail in next class
 Margins

For US

• FBA Calculator
 Margins

For US

• In US Amazon collects sales tax from customer – Seller does not have
to pay any Sales tax so we will not incorporate Sales Tax in our costs

• Gross Margins should be 25% or above.

 Margins

For UK

• FBA Calculator UK
 Margins
For UK

• In UK seller has to collect VAT(Sales Tax) from Customer and give it to

Government. For this purpose we will get FRS(Flat Rate Scheme) VAT
Registered which is 7.5% BUT now Amazon will collect VAT on behalf of
seller from January 01, 2021 after BREXIT for foreign companies.

• Local companies (UK Ltd.) will collect on their own as per usual process.

• Add 7.5% or 20% in your cost while margin calculation.

• Gross Margins should be 25% or above after deducting VAT from cost.
EPAS
 EPAS

Demo For Adding a Product in EPAS

Thank You!