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March and April income reports

Posted by Chris Thomas on June 01, 2015. 3 Comments

Well, after spending a few months licking my wounds from April's financial disaster I thought I'd spend some time reflecting on March which was actually one of the best months the company has ever had in business (I'll get to April in a minute).

We finally managed to get the new 2015 Hibermate from China to Hong Kong to 3 Amazon Fulfilment warehouses in the United States.

That essentially meant that from the 3rd of March 2015 we were in business on Amazon.

Having said that, the company has also spent over $100,000 US dollars on even more new stock over February and March (most of which is currently enroute to Australia - due June 8th we hope - and some is going to Amazon to replenish stock levels there).

In order to fund such a big production run, we had to go into about $40K debt and I also tipped in $10,000 of my own money to keep things going. It's been a pretty risky time and everything needs to go as smoothly as possible to ensure we stay solvent!

It's fun running a business... but only sometimes.

April was obviously a complete disaster financially! In the end, I gave away almost 700 free Hibermates over Easter by mistake, valued at about $42,000 USD.

For March the total income:

March Amazon Sales: $15,696.90

March Website Sales: $20,769.75

March Total:                 $36,466.65



Then in April

Things got a lot harder to interpret! So much so that I've had to re-jig the accounting for these income reports.

The problem is that when Amazon 'sells' one of your products that's been 'promoted' (i.e. you've provided a discount of some sort) it still only shows you the 'non-promoted' value of what you sold in the top level reports. Basically after giving away a ton of stock worth about $45K, I think its safe to assume April was a complete and utter bust.

The following is the breakdown of typical reports which on the surface at least, shows a 'stellar' month:

April Amazon sales: $46,994.90

April Website Sales: $14,988.63

April Total:                 $61,983.53




Wow. Yippee...


First of all, for some unknown reason, Hibermate.com website sales plummeted from March's $20,760 to April's $15,000. That's almost a $6,000 fall in revenue that I can only explain due to the shorter month and Easter. Why the conversion rate dropped from 3.5% to 3% is a mystery as there were no changes to the price or the website copy etc. 

Then there's the Amazon income, which looks great on paper, until you see the actual money Amazon paid the company...

Here's an actual screenshot showing the disbursements over that period:

A massive drop in income to say the least and a mistake that I'll never, ever, make again.

That's for sure.

And May's not looking too good either... I'll update you on May's figures in the next day or 2 as well as an update (now available) on why I think Amazon removed over 60 five star reviews from my product listing pages. In hours, we went from 97 reviews with an average 4.5 star rating, to 32 reviews with a 3.6 star rating... see below...


And then after:


When Amazon sinks the boots, it seriously hurts.

They sure don't care much for the little guys.

Anyway, interesting times indeed. Let's hope we can make it through.


Hi Anonymous! Thanks for the kind words! OK to your question, Amazon’s commission (in my category it’s 15%) applies to the final sale price. So essentially when I accidentally gave away all those products, Amazon made zero commissions. 15% of zero, is zero! Amazon did charge me Fulfillment fees of about $2.47 per item so they did make some money. It cost me just over $1,721 in FBA fees to fulfill all those ‘orders’. In your case, you’d be charged 15% of $10 sale price (or $1.50 + FBA Fees). I think Amazon may look to change it’s position on “giveaways” (intended or not) and resultant keyword rankings boosts. I don’t understand why they boost products higher up the rankings based on pure conversion rates (and BSR improvements) when they’re making no money. Seems odd to me. Hope this helps and thanks again for the question! Chris
Posted by Chris @ Hibermate on October 13, 2015
Hi Chris. I’ve very much enjoyed your blog posts & wish you best success for 2016 model. I just have a quick question: when you run a promo, does Amazon still charge you a commission based on full price of the product? Say, if the product regular price is $100, with a 90% off promo, do sellers get charged a % commission based on $100 or $10 price?
Posted by Anonymous on October 13, 2015
Oh my gosh. I made the same mistake on Amazon. I emailed some people a 50% discount coupon and I didn’t realize it was posted on the product detail page. Amazon’s promotion page is confusing. I was just getting ready to make a new promotion and was searching for “how to make an Amazon promotion” so I wouldn’t make any mistakes this time. Thank you for sharing your story. I’ve worked hard for the past year to get 5 star reviews from customers and when I just checked my items, a bunch of reviews were removed from my listings as well. Amazon is not as easy as it seems. I’m in the trenches with you. I hope you have recovered from your mistake.
Posted by Shirley on August 15, 2015

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