Amazon is a very popular marketplace where almost every e-commerce business lists its products. It gives a lot of exposure to sellers as Amazon has a large customer base which sellers otherwise might not be able to reach. This helps in driving more sales and increasing business revenue. Other benefits of selling on Amazon are that; it handles the payments, shipping and customer service thereby reducing the effort spent as a seller. Amazon is a trusted and reliable site that is beneficial in having a successful e-commerce business.
To sell your products on Amazon various fees are also supposed to be paid to Amazon. There are a number of charges levied by Amazon which makes it difficult to calculate the net profit received on each product. To get the net profit amount on each product, all the charges and other expenses have to be deducted from the payment amount.
The Fees charged by Amazon include:
Given below is a rate card for Shipping fee. Using the given rate card Cointab Reconciliation calculates the shipping fee on each order. Similarly all the other charges are also calculated for every order. It is difficult to calculate all these charges as weight, region, rate percent etc have to be verified and then the correct fee amount is calculated.
Then the deductions have to be made from the selling price to get the profit for each order. As this process requires metacoulious calculations at various levels it will be too time-consuming and error-prone if done manually.
As shown above in the order level view, users can check the results of the profitability calculator. It displays the profit margin on each order by subtracting the Amazon Fees along with other expenses and the purchasing price from the selling price. The remaining amount is the in hand profit that is available on the sale of each order.
Having an inbuilt profitability calculator in Cointab Reconciliation is extremely useful for a business as it can save time and effort spent.
The profitability calculator helps get a more holistic view of your business revenue. When the profit in hand after all the deductions are known, managers can take better data based decisions rather than making gut-based decisions. This tool is useful for businesses that want to improve their financial management and increase the overall profitability of the business.