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) |
| Profit | ||||||
| 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?
