I just decided that instead of talking about billing, I would talk about benefits. Now that we are finally able to calculate our exact ROI on Amazon we can give a figure that goes beyond the estimate I had so far. The good news is that my estimate is true.
We are 15% below the May target
It costs us. The first 10 days of the month things looked even better or worse, but about 5 or more days ago we don’t sell much. There are several reasons for this.
- New sellers slashing prices: I don’t know if everyone does their numbers well because sometimes I see the selling prices and I wonder how it can be profitable for them to do it. One possible explanation is that it’s not because they don’t do their homework well because of their inexperience. Billing on Amazon is easy, but making money isn’t so much anymore.
- Lack of inventory of top sellers: Once again, we are short of better sellers. Right now there aren’t any great deals on the market, so a possibly complicated June is approaching if things don’t change quickly. The only way to balance this is to make even bigger investments when there are good deals. Looking back, I always wonder why I didn’t buy more when I could.
- Less demand: don’t go crazy either. It is normal that there is less sales because there cannot be the same demand throughout the year. In Spain, summer has already started in much of the country (in Germany we always go out with jackets on the streets), so people buy other types of products or don’t buy because they pass by. more time away from home. It is logical and normal that throughout the year, these times are less in demand.
How do we do with the annual target of 250,000 profits?
When you start talking about profit, the numbers seem a lot less spectacular. What if? I’ll have to get used to it. I see the advantage that in this case we have a target that we will achieve in the short term (for example, in 2022) which would be a million euros in profit.
It’s also good to know that our numbers for us will already be relevant, but if we compare them with other ecommerce companies, we are still very small. The important thing in this context is not so much to compare yourself to others but to yourself. We just had a profit of 50,000 euros in 2019. We have improved a lot since then and we are on the right track.
For this year, things are still not guaranteed at all. We failed in the most basic part. Billing numbers depend a lot on the Christmas season. Out of the 250,000 profits we have reached about 25% and in one month we are already at 50% of the year. This is normal because a large part of the sales are made around Christmas. By looking only at the turnover, we are on the right track. If I extrapolate the results to October, November and December, we lack 100,000 euros of capital to have the necessary inventory. It is not a small amount of money and I do not yet have a specific plan to generate this sum.
When you are an entrepreneur, you learn one thing over the years. You’re not always clear on the solution to a problem right now, but you fall asleep with the peace of mind that if you get down to business, you’ll find it.