HOW DO I USE THE ROI ANALYSIS SECTION OF SELECTION?
Use this section to INSTANTLY analyze how your new potential product might perform over the next 12 months.
If you make any changes to an existing ROI analysis for a product and SAVE this will override the old data.
1. SELECT the Amazon MARKETPLACE you want to Analyze a product for
2. INPUT how much you expect to sell, the landed cost ect (see below for details)
3. BOOM your results are auto updated in the display below
AIM FOR PRODUCTS WITH
- At least 50% MONTHLY ROI
- TOTAL LEAD TIME 45 days or less
- CASHFLOW more than $1000 per month
- A BREAKEVEN DATE within the next 6 to 9 months the latest.
UNITS SOLD PER MONTH
Enter the ESTIMATED number of units you expect to sell of your product per month.
Put in the PRICE you plan to use on Amazon.
Input the landed cost per unit for the product. You will need to ask your factory/supplier for the cost and include the Sea or Air freight (use an estimate if you dont have this yet). For more details SEE HERE.
Put in the Amazon Size Tier for the product. Amazon classes products into STANDARD (lower FBA FEES) and OVERSIZE (Higher FBA FEES), please see here for more information. If you are not sure what to use, check a few other products in the Niche and use the same size tier as them.
Enter in the weight of the product (Amazon Shipping Weight) in LBS. If you are not sure what to use, check a few other products in the Niche and use the same weight as them.
Enter how much you plan to spend on PPC per month, $300 per month, or $10 a day is a good start.
Enter in the factory production time. If you are not sure use 30 days.
Enter in how long it will take to ship the product from your factory to Amazon. For small light items via Air Freight use 10 days, for large heavy items via Sea Freight use 40 days.
AMAZON HANDLING (DAYS)
Even after the product arrives it usually takes Amazon a few days to process the stock into your inventory. Use 5 days for this.
NAME TO SAVE AS
This lets you save the product to your My Potential Products Section. Hit SAVE.
This is how much money you are likely to need just to order the product and ship it based on the landed cost you have entered.
If you think you will sell 1000 per month, the first order is 2 months of stock so 2 x 1000 = 2000pcs
The calculation is:
UNITS SOLD PER MONTH x 2 x LANDED PRICE = 1000 x 2 x $10 per unit = $20000 Upfront Investment.
Based on the PRODUCTION TIME, FREIGHT TIME, AMAZON HANDLING TIME this is when you goods will be ready for sale if you ordered today.
BREAK EVEN DATE
Based on your SALES PRICE, LANDED COSTS and expectation monthly sales this is the date when you should get back your full initial investment. Its when the profit you have made in total = the money you invested upfront.
This is the NET PROFIT per month you can expect from this product based on the SALES PRICE and LANDED COSTS you entered.
This is your Return on Investment on the Cost of Goods sold each month.
ROI = NET PROFIT / COST OF GOODS
12 MONTH ROI
This is your Return on Investment on the Cost of Goods sold each year
ROI = NET PROFIT / COST OF GOODS
This assumes you order the products today. The dates show the Income and Expenses for the next 12 months, by month.
This is how many units you expect to sell per month. It starts calculating from TODAY + your total time to deliver the goods to Amazon. If your production time is 30 days, your freight time is 10 days and your Amazon handling time is 5 days, then your first order will realistically be 45 days from today.
This is the SALES REVENUE you can expect on Amazon based on your inputs
This is the total FBA Fees for the month shown.
This is the Sales Revenue - FBA FEES for the month
This is your stock level at the start of the month.
This is how much stock the tool estimates you will need to order that month. It factors in lead time.
Based on your order quantity, this is what you will need to spend on new stock that month.
This is your monthly PPC Costs
This shows your Cash Flow for the month. It is not NET PROFIT because you might have had to use some profit to re-order more stock. Its just your change in cash for that month.
Since you started the product this is your net cash position.