Below are two free Excel templates that you can download and use to help you better assess the profitability of your Amazon business and individual products.
– The Unit Economics spreadsheet – you can use this template to help you deepen your analysis before you commit to certain products in your Amazon FBA business.
– The Cash Flow calendar – this template will help you keep track of cash in your Amazon FBA business. In retail, cash = blood of the business. If you run out of cash, you run out of business. By keeping track of all available cash you have on hand and making weekly check-ins, you can avoid that happening to you.
Just click on the name of the spreadsheet below to download it. If you find these spreadsheets valuable, make sure to share for other sellers to benefit from these free FBA spreadsheets.
This template is designed to help you understand the profitability of each specific product on a per-unit basis. And that’s what unit economics is: your revenue, profit, and costs on a per-unit basis.
The spreadsheet will be useful if you already have a product (s) selling and to those who are just starting out in the Amazon FBA.
Here’s how it looks like:
And here are some instructions on how to use it:
1. Adjust any of the input metrics on the left, and watch how they impact your profitability variables on the right.
2. Over time, this will help you build a deeper understanding of the profitability potential of specific products – existing ones that you’re already selling, as well as potential new products you’re thinking of launching.
3. Research: prior to launching new products, research their numbers, simulate different scenarios, and launch only those products that show the highest profitability potential.
4. Assess your profitability beforehand: set your prices in the spreadsheet to those of similar products on Amazon, and see how profitable you can be under reasonable marketing efficiency conditions (e.g. ACoS = 50%, PPC Share of Sales = 30%).
5. Test the impact of different unit landed cost levels on the margin and ROI. Will you be able to substantially improve profitability once you’re able to order inventory at scale and get supplier/freight forwarder discounts?
6. Find your break-even point: Try finding your break-even price and ACoS by adjusting the inputs such that they result in a zero margin. You want your breakeven price to be lower than average competitor prices, and your breakeven ACoS to be as high as possible.
7. Develop your intuition: Keep refining the numbers for both your existing products, as well as potential new ones, until you have developed a deep intuition about the unit economics of your business.
By contrast, here’s how an automated version of this spreadsheet looks like in Sellerscale:
You can access the unit economics dashboard feature, as well as all other Sellerscale features for free for 14 days.
Unfortunately, we don’t yet have a cash flow calendar feature in Sellerscale, but we’re working hard on implementing it soon.
Cash flow is essential for every retail business – whether it’s selling online or offline.
Most people are starting their first Amazon FBA businesses with limited cash. So it’s very important to keep track of it. Because remember: running out of cash in this type of work = running out of business. You need to have enough capital to stay afloat (rule of thumb: have at least enough burn rate to stay afloat for 6-12 months without receiving any income).
Many of our guests on the Sellerscale Show talked about how essential it is to have at least $5,000 available to invest in your business when you’re just starting out.
Whatever sum you choose to start with, it’s important that you keep track of every penny you’ve spent. Even if you think of it as an insignificant expense.
Fun fact: Sellerscale allows you to keep track of all your overhead expenses in a separate “Expenses” feature in the app. We automatically include Sellerscale subscription as one of your expenses. Although insignificant compared to inventory spending, it’s important to keep track of everything.