Selling on Amazon is a numbers game. You as the entrepreneur are fully responsible for regularly examining the key numbers behind your business and making operational decisions on the basis of that data. And it’s not enough to just look at a chart with your estimated profit for the last X days and go on with your day. You need to dig a little deeper.
Fortunately, now you have the perfect tool to do just that. Our app will help you develop a deep, intuitive understanding of the fundamental financial building blocks of your Amazon business - your “unit economics”. Long story short, a unit economics analysis shows you how much money you make on every unit you sell - considering your sales price, ACoS, giveaways, production costs, and various fees.
You’re probably wondering, “how is this different from the other analytics tool that I’m using?” Three words: very very different. Can your tool answer even one of the following critical business questions?
- How would selling 5 units a day at a 70% discount impact my average profit margin?
- How will my margin change if I increase the sales price by 15%?
- How much more money can I make if I negotiate a 10% discount with my supplier?
- How profitable can product X be if all of its sales are organic (non-PPC)?
- How many months will it take me to recover my initial investment?
- What is my breakeven price for each SKU?
- How much profit can I expect to make in Q4?
With our unit economics model, you’ll be able to answer all of these questions (and many more), in SECONDS. For example, to learn how expensive giveaways are, just (1) plug in the number of units you want to sell per day at a discount, (2) enter the average discount percentage, and (3) you will immediately see how your profit margin, ROI, and payback period changed in response.
Check your unit economics tool on a regular basis, play with the assumptions, and learn how they drive your target metrics like margin and ROI. Over time, you will develop an intimate understanding of your true product profitability - enabling you to make considerably more informed and timely decisions on which of your products to scale, which ones to phase out, and which new product opportunities to pursue.
If you have any feedback, shoot us an email or use the chat widget in the bottom-right corner of the screen on our site.