Hello there,
Let’s start this article with a straightforward yet obvious question – IS IT POSSIBLE TO BE PROFITABLE FROM FIRST ORDER ON AMAZON INDIA?
The answer is a BIG YESS…..
Table of Contents
Before starting any business there is a possibility of risk and as we know where there is risk there is a return.
There are several rumors in the market which say being profitable on Amazon is a difficult task and we can agree with that as every business does have those risk factors. But what if I say that it is possible to be profitable on Amazon from the very first order that you receive and you do not have to decrease your margins to increase the sales to stand on the platform?
After reading this idea article you will have a great idea of how to be profitable on Amazon selling business from the first order.
You just need to focus on some critical points before starting your Amazon Selling Business. When I was starting my Amazon selling business I was told that too by so many experienced people around me, but after listening to them I got way more excited about making my business profitable and proved them wrong.
I am going to let you in on one secret that no one else is going to tell you about Amazon Selling in India. The very first step towards your success journey is deciding “WHAT TO SELL” on Amazon.
“WHAT TO SELL” on Amazon
You can indeed sell anything on Amazon India as the Indian Retail Market is very large. But the question is can you be profitable by selling anything you want?
While deciding the product to sell you need to take into consideration 3 vital factors:
- Weight of the Product you want to sell
- Cost of the Product you want to sell
- Availability of the Product you want to sell
Let’s understand this with a practical example :
Amazon charges different delivery charges on different weight classes which are as follows –
Amazon Easy Ship Weight Handling Fees
| Standard Size | Upto 500 gm | Each Additional 500 gm (Up to 1kg) | Each Additional kg after 1kg | Each Addition kg after 5kg |
|---|---|---|---|---|
| Local | Rs.44 | Rs.13 | Rs.21 | Rs.12 |
| Regional | Rs.53 | Rs.17 | Rs.27 | Rs.13 |
| National | Rs.74 | Rs.25 | Rs.33 | Rs.16 |
Amazon Fixed Closing Fees
| Selling Price | Fixed Closing Fees |
|---|---|
| Rs. 0 – 250 | Rs.3 |
| Rs. 251 – 500 | Rs.6 |
| Rs. 501 – 1000 | Rs.30 |
| Rs.1000+ | Rs.56 |
Amazon Selling Fees Calculator with Example
Take an example:
- Cost at Rs.100 for the seller
- Amazon charges a 15% commission on the selling price (know about Amazon commission)
- Weighs 300 grams after the packaging
- Closing fees as per Selling Price
- Plus GST on all fees and delivery charges at 18%
- Competitors are selling for Rs.399
So, how much do you want to have to sell it on Amazon to be completely profitable and still beat the competition
| Details | Calculations |
|---|---|
| Cost of Purchase | Rs.100 |
| GST on Purchase assume | 12% |
| Total Purchase cost | Rs.100 + Rs.12 = Rs.112 |
| Selling Price | Rs.399 (same as of competitors) |
| Net Proceedings | 399 – 112 = Rs.287 |
| Amazon Commission Fees | 399 x 15% = Rs.59.85 + GST |
| Total Amazon Commission Fees | 59.85 + 18% of 59.85 = 59.85 + 10.77 = Rs.70.62 |
| Weight Handling Fees (Delivery Fees) | Rs.74 Maximum (Since the product is less than 500 Grams) |
| Total Delivery Fees | 74 + 18% of 74 = 74 + 13.32 = Rs.87.32 |
| Fixed Closing Fees | Rs.6 |
| Total Closing Fees | 6 + 18% of 6 = 6 + 1.08 = Rs.7.08 |
| Total Cost (Amazon Fees + Delivery Charges) | 70.62 + 87.32 + 7.08 = Rs.165.02 |
| In Hand amount for seller | 287 – 165.02 = Rs.121.98 |
Now, that we know that the product has a profit margin of Rs.121.98, we can use this amount to make the product price competitive and more attractive, we can sell the product at Rs. 349 instead of Rs.399 to beat the competition and still be profitable by Rs.80 approximately.
From this, we can conclude that being profitable is not difficult, it’s just a matter of calculating what to sell and having the correct product to sell on Amazon
Now we can talk about the availability of the product, the product you want to sell should be available all the time in the market or with you.
Final Words
From my years of experience, I can say that the definition of a highly profitable product is of the following points:-
- Purchase price from less than Rs.500
- Competitive Selling Price at least 2.5 times of purchase price
- Product weight preferably less than 500 grams to a maximum of less than 1 kg
- Availability in the local market
