[Research] Why do you make a profit? The magic logic to turn red ink into black ink
I can't find profitable products
Recently, Amazon sales,
✅increased competitiondue to more rivals
✅deterioration of Rakuten points
✅Amazondeterioration of delivery agency fees
and other factors have led people to say thatAmazon sales have become tough.
But...is that really true?
It is true that profits have become thinner due to the deterioration of points and fees,butactually, Amazon has a
magic logic to amplify profits.
In this note, I will explain the "Amazon magic logic" and the "story of how to naturally make a profit".
So, to learn thatmagic logicright away, let's first look at the "profit structure of a single product."
*To simplify the story, the figures for fees, etc., are approximate values.
■ Profit structure of a single product
The subject is "Hondashi", which often appears in Puu-note
It is sold on Amazon forabout 1,000 yen.
This time, we will calculate it assuming it was simplypurchased at 50% for 500 yen.
When calculating profit on Amazon, generally, the
"selling price" minus the "
purchase cost (50%)", "FBA fee (10%)", and "delivery agency fee" is the
profit.(Advertising costs and storage fees are excluded to simplify the explanation)
This is illustrated in the diagram below.
Yes, even if you sell it for 1,000 yen,cost, fees, and shippingare taken, so it iszero profit.
"Whoa! See, there's no profit after all!"
You might say that, but there is amagic logic to turn this zero-profit productinto aproduct that makes a profit.
I'm saying something as grand as "magic", but...
Simply make it a set productand that's it.
(Notes on set products)
When listing multiple sets of the same product, you must add something like a "product sold individually" or a "valuable product combination."
*From the set product guidelines
■ Profit structure of a 2-piece set product
Now, let's try turning the zero-profit Hondashi into a2-piece set.
Wait? When I tried making it a 2-piece set (sold for 2,000 yen),
the profit increased to 400 yen (20%)!
For those who thought, "Why!"please take a close look at thegreen partof the diagram.
・Individualdelivery agency fee:-400 yen
・2-piece setdelivery agency fee:-400 yen
*Approximate values for each
That's right.
The small, light, and good little Hondashihas the
same shipping cost even for a 2-piece setsothe profit increased by making it a set! (Assuming it fits in a size 60 cardboard box when in a 2-piece set)
Getting carried away, let's also look at theprofit for 3-piece and 4-piece sets!
■ Profit structure of a 3-piece set product
Profit for a 3-piece set: 800 yen (27%)
■ Profit structure of a 4-piece set product
Profit for a 4-piece set: 1,200 yen (30%)
Wow...a product with zero profit individuallyhas transformed into aproduct with a 30% profit margin!
If you line up the diagrams so far, you can clearly seehow the profit increases.
With this,even if you offer 10% off for a 4-piece set (3,600 yen)a20% profitremains!
Shipping costs turn into profit
That's right.
Those single items that you were lamenting had no profit, no profit,
if you make them into set products, they will become profitable!
"That's obvious!"
you might say, but...
If you just understand this "super basic obvious thing", then "
researching set products for your own catalog" is very, very easy.
I'll say it again because it's important.
If you just understand this "super basic obvious thing", then "
researching set products for your own catalog" is super easy.
I'm sure some of you have already figured it out, right?
So, I want all Amazon sales practitioners to know this
"story about how to naturally make a profit"
will be explained in the next note.
Look forward to it.