EA41 Using the Amazon Revenue Calculator, Sellers Getting Ungatted Hassle

Is the Revenue Calculator causing you stress? Are you frustrated by gated products? In this episode, Todd demystifies profit predictions and explains how to flip your mindset when it comes to Amazon headaches. Stay tuned.

Listen

Watch

Calculator Confusion

If you’ve been selling on Amazon for a while, you’re probably familiar with Amazon’s Revenue Calculator. In short, the Revenue Calculator is a tool that helps you predict a product’s profitability by factoring in fees. Amazon recently added a section for storage fees and this has caused a bit of head scratching among sellers. That’s because this section doesn’t show up until after you’ve hit calculate. Once you hit calculate, you’ll need to select the number of units you think you’ll sell per month, hit calculate, and then hit calculate a second time. Go figure.

When it comes to finding information, use tools like Jungle Scout and Helium 10 for estimating your sales per month. If you’re over the Amazon calculator, RevSeller is a great tool for predicting profitability without the hassle.

Push Through Barriers

If you’re a new seller, the ungating process can be long and frustrating. That’s because Amazon takes amount of positive feedback into account. And unfortunately, there are often multiple levels: brand, category, and ASIN. You may be approved to sell Rolex but are you approved to sell watches and a specific kind of watch? You’ll need invoices from legitimate brands and distributors throughout the approval process. Also check out Jungle Scout‘s plugin that automates the request for feedback process.

And if you’re feeling bummed about gated products, switch your mindset up. The more hoops you go through, the more profit you’ll reap when finally approved. As you move through hoops you’ll find fewer and fewer sellers willing to jump through them which means more revenue in your pocket. Check out Todd’s episode on gated products for more tips.

Stay Positive

Like any business, Amazon comes with headaches. It’s your willingness to push through those headaches that separate top sellers from the rest.

Hopefully this helped answer some burning questions and put you in the best mindset for success. Remember to leave a review where you’re listening and subscribe on YouTube.

Happy selling everybody.

Resources From This Episode

Outline of This Episode

[00:18] Todd’s introduction to this episode

[02:04] Clearing up calculator confusion

[13:52] Why it’s important to push through Amazon headaches

[21:05] Todd’s closing thoughts on this episode

Transcript

Announcer (00:01):
Welcome fellow entrepreneurs to the entrepreneur adventure podcast, where we talk about Amazon wholesale and how you can use it to build an eCommerce empire, a side hustle or anything in between. And now your host, Todd Welch,

Todd (00:18):
Everybody welcome to episode number 41 of the entrepreneur adventure. I’m your host Todd Welch. And we have a couple great listener questions today. The first one is about using the Amazon revenue calculator, which has gotten unfortunately complicated. Unneedingly complicated because of the way Amazon has it set up. I walk you through how to use the Amazon revenue calculator to make sure you’re actually going to be making money on a product. And then the second question is in regards to getting ungated and how much of a pain it can be sometimes. But if you walk through the process, get ungated. The harder it is, think about it this way, the harder it is, the more likely you’re gonna maintain the profit on that item and the less likely people are going to be jumping on there and start tanking that price for you. So just gotta switch our mindset on it, but we’re going to dive into these questions, give you my answer to them today. If you want to get the show notes or anything, we talked about entrepreneur adventure.com forward slash 41. To check that out and without further ado, let’s go ahead and dive into these questions.

Anthony (01:40):
Hi Todd Anthony here, Amazon revenue calculator has a new feature called the storage cost calculator. I’m just really confused about how to use that. If you enter one unit in the Amazon fulfilment column. So you’re supposed to enter the average number of unit you hold in inventory for this product. My confusion about that is how would that be calculating the unit cost then? Because you’re calculating costs for more than one unit then. It’s very confusing to me. It’s just really making a lot of products, completely unprofitable, hoping that you could maybe elaborate on how to use that to calculate profits. Thank you so much, sir.

Todd (02:04):
All right, Anthony, thank you so much for that fantastic question. the Amazon revenue calculator. So if you’re not familiar with the Amazon revenue calculator, we’ll put a link in the show notes for this episode, but you can also just do a search for Amazon revenue calculator and you should be able to find it, but basically it’s the calculator that Amazon has created for us to be able to put in the information on how much a product is going to cost putting the Asin for a product and get back in estimation of how much profit we would have left over when we add in all the costs.

Todd (03:16):
So we’re adding in costs like or we’re putting in like what the item price is how much it costs to ship to Amazon, the cost of the product. And now, as Anthony mentioned, they’ve added in this new average inventory units stored, which was not there previously. This is definitely throwing some people off because the second part of this average inventory units stored is not visible until after you hit calculate. So if you don’t notice that it pops in there, you’re going to hit calculate, and you could potentially show that you’re losing money on the product when you actually wouldn’t be. So I’m going to go through this. If you’re listening to this, I’m going to describe this the best I can. If you’re watching this on YouTube, you’ll be able to see me here doing it live. So I’ve gone ahead and punched in Burt’s Bees toothpaste this natural toothpaste that I buy and use..

Todd (04:10):
I really like it. So I just using it here for an example, just have to enter something so that we can get some numbers in here. So I selected that. If I hadn’t selected that right at the top, it would ask you to enter your ACE in. So I just entered that and hit submit. And the next step on this revenue, the calculator is the put in the item price and the item price is how much we’re going to be selling it for. That’s not what we bought it for. So some people get confused that there. Item priced on this currently going price is 18 bucks or 17.99. So I’m going to punch that in there. The ship to Amazon. And we’re only worrying about the Amazon fulfillment column here, by the way, there’s two columns, your fulfillment, which is merchant fulfilled, and then Amazon fulfillment, which is FBA and everybody who listens to me, you’re probably doing FBA.

Todd (05:15):
So we’re going to focus on that. Ship to Amazon my average costs is about 25 cents per pound right now with shipping pallets and stuff like that. If you’re just doing ups, it’s probably going to be a little bit higher than that. Maybe 50 cents a pound. If you’re doing a larger volume than me, it might be a little bit lower than 25 cents per pound. And Amazon is saying that the unit weight of this product right now is 1.3007 pounds. So I’m going to take that 1.307 and multiply it by 0.25, which is my 25 cents. So going to be about 33 cents. And I always round up, I like to be a little more conservative. So I’m rounding up point 33 cents on sending that in. And then the cost of the product, which is at the bottom. I’m going to skip the average inventory units that you mentioned right now, Anthony, and do the cost of the product.

Todd (06:16):
Let’s just say our costs on this is $6 just to guests and the new thing here that is confusing people is the average inventory units stored. So basically this is the average number of units. You hold an inventory for this product. I’m assuming it’s monthly. You know, how many units you’re going to have in there? Well actually, no, it’s not monthly. It’s just total. Like when you send in a batch of these products, how many units are going to, are you going to send in at one time, you’re going to send in 50 are gonna send in 500. Are you going to send in 5,000? So you’re going to want an idea of that because what it’s gonna do now is add in the storage fees. So you can get a little better idea on how profitable this product is going to be.

Todd (07:10):
So this is a really good selling product. It is currently I’m going to bring it over here for those of you watching on video, it is currently according to jungle Scouts, selling 7,081 units per month. And so I am going to punch that in. Well, let’s see the number of people that we’d be competing with currently would be just us and one other person, which right now on this product is actually Amazon. So not a good product for us to buy, but we’re going to pretend that it’s just going to be us. And one other person for this product, we’ll pretend that it’s not Amazon. So if the estimated number of sales per month is 7,081, and there’s going to be splitting between two people. That means we would get maybe around 3,540 units. Now always remember all of these estimating tools for the number of sales, whether you’re using jungle scout or helium 10 or tactical arbitrage or analyzer tools, they’re all guesses.

Todd (08:21):
So I always tend to around down. So I’m going to round down to 3000 on this one. So let’s say we are going to want to have at least two months of that in stock of this product. So we’re going to send in 6,000 units here and we can hit calculate. So what’s crazy is that Amazon says, okay, so on this product, you’re going to lose $235 and 94 cents and have a net margin of minus 1,311 point 51%. And so it’s like, huh, what are you talking about? How can I lose $235 on a product that costs 17.99? Well, what Amazon is doing is it is guesstimating, the monthly storage costs for this product based off of it’s volume, the size that it’s going to take up an Amazon’s warehouse. And then it’s multiplying that by those 6,000 units that we put in there.

Todd (09:26):
So it’s saying that you’re gonna be charged $240 every month to store this product. And what the problem is, is that until we hit calculate over on the right hand side, the column or the entry area that says estimated monthly units sold with seller fulfillment does not show up until after we hit calculate. And Amazon defaults that to one. So basically we’re saying we’re sending in 6,000 products and we’re only expecting to sell one per month. And so of course that throws the calculation like all off. And so that original number that it gives you is completely wrong. So what you want to do is select the actual number of units you think you can sell per month. So in this case it was 3000. And just by entering that, it changes the graph there, but it does not change our net margin. We have to hit calculate again to get the actual net profit per unit.

Todd (10:35):
So once I hit calculate again, after I told them that I’m selling 3000 units per month, now it’s coming up as the net profit of $3 and 98 cents per unit sold and a net margin of 22 point 12%. So that is where a lot of people are getting confused. It’s a really horrible way that Amazon has this setup that estimated monthly units should be right over there next to the average inventory units stored so that you can enter that data right away. But for right now, you have to hit calculate. And then on the right hand side update, the estimated monthly units sold. So this is a really good tool. I mean, it’s good that Amazon is adding this in because it’s taking into account storage fees that you’re going to have to take into account. Anyways, you always have to remember about all those little fees that add up, you know, the cost of a shipping label, the cost of a product label, the cost of the bag that you have to put it in the cost of your labor to send that in the Amazon, the cost of shipping to send in the Amazon and the cost of storage as well.

Todd (11:46):
So it’s nice that they added that in there, but definitely confusing a lot of people. And this isn’t the first time that I’ve heard someone confused that this tool is telling them they’re losing money. So hope that helps you Anthony with that and helps you use this tool a little better. Now, one thing I would recommend is a tool like rev seller, which is this nice little tool right here at the top. So then you can just punch in your costs and it gives you your ROI and your profit margin in your net margin right there. And it actually calculates right in the monthly storage cost as well, right at the top of every Amazon listing. So it makes it so much easier. It’s only a hundred dollars per month. And so you can get that if you just go to entrepreneur adventure.com/rev seller, and that’s R E V seller, and you can pick that up, that’s an affiliate link. So I will get a small cut of that sale at no additional cost to you. And I would really appreciate that. So again, entrepreneur adventure.com forward slash rev, R E V seller, all one word. All right. So, Anthony, I hope that answered your question. If not, shoot me a message back. If you have any other questions on that and I will help you out further.

Maha (13:17):
Hi Todd, my name is Maha. I just got approved for a brand and I sent a letter to Amazon. They approved me, but they still did not. When I start listing product, it’s still gated when I reopened the case and some them, they said, well, you have to start submitting for each category. So that’s mean it doesn’t matter if I got approved for the brand or not, then I have to go for each ASIN to do that. It just is so painful. Thank you. Yes.

Todd (13:52):
Thank you, Maha for that excellent question. And getting ungated is definitely a big issue for a lot of people for myself has to become a lot easier because I’ve done it so much. And my account has a lot of seller feedback. So I just get auto Ungated for a lot of things. So sometimes we can forget how much of an issue it is, especially for new sellers. And it sounds like you’ve hit one of those areas. That can be a real pain, because as I’ve talked about in a past video on getting ungated, and if you haven’t watched that video, I definitely would recommend it. I’ll put that link to that video in the show notes, entrepreneur adventure.com/ 41. And you can check that video out. I highly recommend it, but there are several different levels to gaiting. So the one that you’ve already into and cleared is the brand, the level, gating some brands on Amazon.

Todd (14:57):
You have to get ungated for that brand, get permission from Amazon to sell that brand before you can even sell it. So you’re going to need either a letter from the brand, a purchase, you know, an invoice from the brand or an invoice from a distributor that sells that brands, products, all three of those should work to get you ungated for a brand. And once you get ungated for that brand, then theoretically, you can sell any product that brand has on Amazon, but that will not be the case if there’s additional gating on the category or on the ASEN level. So even if you get approved for a brand, you cannot sell their products. If you’re not approved for the category that the brands products or some of those products from that brand are in. So let’s take, for example, the watch category, if you got approved to sell Rolex is the brand Rolex.

Todd (16:06):
You still need to get ungated to sell in the category of watches. Now what’s good is that you should be all used the exact same paperwork that you use to get ungated from the brand to get ungated for that category as well, because you either have a letter from the brand or you’ve purchased 10 units or more of a product from that brand. So those same units, if they were Rolex watches, you should be able to use that same invoice to get on gated for the category of watches as well. And if not, then you may have to purchase from another distributor or another brand, perhaps to prove to Amazon more legitimately that you can sell in that category and a category like watches, which has a lot of knockoffs and a lot of counterfeits, it’s going to be harder. You just have to make sure everything lines up.

Todd (17:05):
And if you submit for the category that paperwork and they deny you try again, next week, you might get a different seller support person who’s in a better mood next week and knows more about what they’re doing to get you. Ungated, you know, assuming that all of your paperwork and everything is in order, your address is the same as your address on Amazon. The name of your business is the same and all of that stuff, phone numbers and everything is the same. You should be able to get Ungated in those categories. Now, Amazon has been getting a little bit more stingy in some places of approving people and you have to prove yourself more. So if for some reason you can’t get approved for a category today, try again in a month, in three months, six months in a year after you’ve gained more seller feedback on your account that can help as well.

Todd (18:05):
The more seller feedback, positive seller feedback. And you’ve got to keep that high. Remember we’re requesting that positive feedback using a tool like jungle scout and going to the orders page and requesting the seller feedback and review from each order and jungle Scouts extension can automate that, make it a little faster for you, but that way you’re building up your feedback and Amazon takes that into account and how much they trust you. So you can always try re applying after a few months or something like that. If you’re unable to get ungated for whatever reason in a category now after categories, we also have ASIN level gating, some ACINs regardless if you’re approved for the category and approved for the brand, there may be specific ASINs that Amazon has had a lot of trouble with maybe a lot of knockoffs, a lot of hijackers and things like that.

Todd (19:07):
So for whatever reason, they locked down that specific ASIN. So you’re also going to have to get approved for that ACIN, which means that you’re going to have to have purchased those specific products or that specific product, and have that on an invoice. So if you don’t have that specific product, you’re going to have to purchase at least 10 of those and submit the invoice for that ACIN. So it doesn’t, well, it can be a headache. It hit by all three. It doesn’t happen a lot that you get hit by all three, but it’s definitely possible depending on the categories that you’re selling in. And if it’s categories and areas where Amazon has had a lot of issues with crappy sellers or bad sellers out there who are making the rest of us all look bad and making us jump through all these hoops.

Todd (19:58):
So you kinda just gotta flip your mindset, look at it as a good thing. If you have to jump all these hoops to get Ungated for those categories and the brand and the ACIN more people are going to give up. So you’re going to have less competition once you get approved for that item wants to get all the way through that. You don’t have to worry about a hundred other people jumping on the listing because it’s so difficult. Other people are going to give up and not keep pushing forward. So just keep pushing forward, get that stuff done, and you will be able to sell those products. If everything lines up and you make everything legitimate and perfect, and you should be able to have a lot of good profit on that product for quite a long time and not worry about so many people jumping on it.

Todd (20:49):
So look at it that way, rather than seeing it as a headache, which we know it is a headache, but look at the good side of it and keep pushing through and make it happen. And you should have a good product to sell for quite a long time to come. I hope that’s helped Maha.

Anthony (21:05):
All right. So I hope those questions and answers helped a lot of you out there. Definitely some confusion on that revenue calculator and gating of course can be a headache, but it can definitely be a benefit if you’re the one going through all those hoops and getting in there to sell those products, there’s going to be less people that also go into that. So definitely always good to keep a positive mindset. There are so many things in Amazon that are a hassle, but if you push through them, the more it is a hassle, the more you are going to be successful in your business.

Todd (21:44):
We’re building a real business. Any business is going to have its issues, going to have problems that are going to come up. So just keep that in mind, keep pushing through, check out the show notes, entrepreneur,adventure.com /41 for everything we talked about here. If you’re listening on the podcast, you might want to take a look at the YouTube video and subscribe and like us over there on YouTube. So you can check out any videos that we post as well. So with that, I hope you all have a fantastic week. Your businesses are doing awesome. We’re heading into Q four. Things are only going to be getting better. So if you haven’t listened to the previous episode on my nine tips for selling more in Q4, you’re definitely gonna want to check that out. Entrepreneuradventure.com/40 for that as well. So with that, this is your host, Todd Welch signing off happy selling everybody.

Announcer (22:44):
This has been another episode of the entrepreneur adventure podcast. Thanks for listening fellow entrepreneur and always remember success is yours. If you take it.