How do Retailers Make Money on Amazon ?

how to retailers make money on Amazon

We know that Amazon sales are growing and third party sellers are benefit from Amazon reputation with increase of revenue. We know retailers should be on Amazon to increase their online revenue. According to a research carried out by Linnworks Amazon sales represent 54% of the online sales. All good here, but how do people make money selling on Amazon.

Let’s take this example above. The selling price is £2.00 including delivery.

A B C D F A- (B+C+D+E) A- (C+D+E)
Item Price + Delivery VAT Amazon Fees (17.25%) Postage Cost Product Cost If VAT payable If VAT not payable
2 0.333333 0.345 1.85 0.5 -1.028333333 -0.695
  • Assuming the item cost is 50p
  • There is no stationery cost
  • Price of the Postage (Lowest) – Ref royal mail

Express essential is having loss of £1.03. Even if the item was not VATable there was still loss of 70p.

I would like this calculation to be wrong, please comment the corrected figure and if it is correct how are retailers making money?


About DaytodayEbay

Multichannel Sales Channel Expert - eBay, Amazon, eBid, Pixmania, PlayTrade | Advanced specialist training for businesses of all types and sizes

Posted on April 12, 2013, in Amazon Strategies, Amazon Training and tagged , . Bookmark the permalink. Leave a comment.


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