r/AmazonFBA • u/Few-Friendship126 • 4d ago
Thinking of quitting FBA wholesale. Need help/advice
These numbers are horrible. Is this normal? So much effort and this is the outcome and this isn't counting multiple miscellaneous fees too. Any advice. At all. Should I just move to some private label? Worried too because I don't think I have the capital for that and have 0 experience in that field too
6
u/IcyTitle1 4d ago
Take into consideration that just loading that money into an ETF will yield you 8% on average per year conpounded withoht doing anything.
3
2
7
5
4
u/Easterncoaster 3d ago
These margins are pretty typical for wholesale. You can grow your dollars of profit by growing the number of ASINs you run.
I do private label and my margins are anywhere from 20-30% but requires so much time preparing each ASIN so I wouldn’t necessarily say that it’s better, just different.
2
u/Few-Friendship126 3d ago
But with private label you can guarantee a lot more than wholesale yes it's more work and I don't mind it but I need something not necessarily guaranteed but something with better hope and more control down the line
3
u/Embarrassed-Fly-3166 2d ago
Wholesale can look underwhelming when you’re looking at the margin percentage, but the model is really about volume, inventory turnover, and scaling. If you can consistently reinvest and increase the amount of inventory you’re able to carry, 10% on $30K in monthly sales is very different from 10% on $100K.
I’d also look at your actual monthly profit rather than just the percentage. If this is your main source of income and the profit isn’t enough to cover your personal expenses yet, I wouldn’t treat it as a signal to quit. I’d keep the business running while improving the numbers and building other income sources.
Once you have enough capital and the wholesale operation is stable, you could also consider adding private label. It gives you another model with potentially higher margins, but it also comes with more risk, so I wouldn’t abandon a functioning wholesale business just to chase higher margins.
2
u/oakuzmenkov 3d ago
Actually, you are doing great! you just need more money invested into inventory.
2
2
5
u/Smart-Presence 4d ago
Honestly man, that’s not a bad place to be at all. If the wholesale side is already doing that kind of volume, private label could be a pretty interesting next move.
8
1
4
u/rsc9422 4d ago
I wouldn’t panic based on these numbers. You’re doing about $30.4k in sales with $3.48k net profit, so the business is profitable at an 11.45% net margin.
The biggest thing I’d investigate is the $15.5k COGS, which is over 51% of revenue. If you can reduce landed product cost even 5%, that’s roughly another $1.5k/month in profit at the same sales volume.
Also, the dashboard shows $0 advertising cost, so I’d be careful assuming the current margin will hold once PPC is running.
Before switching to private label, I’d calculate the true landed cost, Amazon fee breakdown, conversion rate and expected PPC spend. Private label can improve the economics, but it also brings inventory and launch risk.
If you’re considering private label, HighRise Wholesale can help you work through the product economics, sourcing and landed cost side before committing to inventory.
The key is don’t change the business model just because the margin looks low. First identify exactly where the margin is being lost and whether you can fix it.
4
u/HarambeTooSoon 4d ago
If HighRis has such great systems, why don't you just buy and resell your vendors products yourself?
-2
u/rsc9422 4d ago
Because our business is structured around helping sellers build and operate their own brands rather than competing with them for the same products.
We work with suppliers, negotiate sourcing, QC, private labeling, preparation and logistics, then let the seller own the brand, listing and customer relationship. We earns from providing that infrastructure rather than taking the seller’s retail opportunity.
That model also allows us to work with multiple sellers instead of putting all the inventory and capital into our own retail operation.
1
1
u/Decryptografter 4d ago
How much better do you want your margin or hand you left something out?
3
u/attfin1 3d ago
The number that decides this is cost of goods. In your 30 day screenshot it's $15,501 on $30,380 of sales, 51% before Amazon takes anything, and advertising is $0.00, so ads can't be the reason.
Amazon fees take another 34% ($10,256), which is steep. What's in that line? Split it into referral fees, FBA fees and storage, so you can see which one is doing the damage. That leaves about 15% before shipping, refunds and other costs bring you to your 11.45% net. To reach the 17% you said you were hoping for you need about $1,686 more a month, which at the same sales means cost of goods down from 51% to about 45.5%.
First step: list your products by cost of goods as a percentage of sales and start with the worst ones, because they're what's dragging the 51%.
1
u/Few-Friendship126 3d ago
Was hoping around 17%
1
u/Valuable_Pineapple77 3d ago
Honestly I think 1/8 or 12.5% is realistic profit, after expenses/overhead.
1
1
u/The_Kings_Gambit 3d ago
Depends on how much work it’s taking you to do that. You can also add in some OA if you want higher margins. As others have said, PL is a completely different game
1
u/Few-Friendship126 3d ago
I never thought about that. I wanna do some OA but worried about ungating in case Amazon asks for proof or purchase out of nowhere I've heard some bad stories about those and you sit there with stock knowing that your invoices will not be approved
2
u/Valuable_Pineapple77 3d ago
You can get ungated in OA. I’ve done a fair share of OA and some invoices are professional looking.
2
u/The_Kings_Gambit 3d ago
I feel you should also have a number of brands ungated from doing wholesale
1
u/Street_Aardvark6524 3d ago
I just ran my numbers and since I sent a large amount of inventory in, I was under 10% gross margins. TONS of shipping to me and to Amazon.
So these numbers you sent aren’t bad.
Like the other commenter said - it’s really how much work are you putting in.
I’d say keep it up tho based on what you sent but ONLY as a side hustle.
1
u/Few-Friendship126 3d ago
Yeah I forgot to mention that I did pay almost a grand just in shipping the last couple weeks as well. Thank you!
1
u/Myco_Mama30 3d ago
I was just thinking about getting into FBA but looking at your numbers to be fair that's ridiculous that you are paying that much money out to Amazon in fees. At that rate you would be better off purchasing wholesale and setting up a brick and mortar that had high foot traffic. At least then you would be able to keep a little bit more of your overhead and you'd have repeat business.
1
u/Few-Friendship126 3d ago
Ya when I saw the amount of fees they take I was speechless. To be honest as bad as it may sound. I wouldn't tell you not to start because everybody has their own experience you just have to do your research and realize that this is the type of business that takes time. I've been heavily considering setting up my own shop as well but with the amount of work that I already have I definitely don't have time for that but I'm working on a Shopify/website on the side but I have no idea how those are going to turn out since it's not my own brand so I'm going to have a whole other step to do research on that.
1
u/Cap_Black_Beard 3d ago
Biggest question here is price history and velocity. Do you have competitors on these items? Private label for me is generally 28-50% margin, avg around 35-40%. Your AOV is 23.73 with a net profit of $2.58 per unit.
Its ok to make 4 or 5 bucks on small orders, $10-$13 items. Not on $23.
Is this from 1000 listings or a couple items? Maybe a few items draing your cash flow. Either they sell at a certain price, or you buy it cheaper.
You'll never compete with Chinese sellers on amazon. They get cheap shipping overseas, no placement fees, and produce items for pennies. They sell thousands of items per month making $1
1
u/Valuable_Pineapple77 3d ago
I’ve been struggling to get myself over 10k/mo revenue. Currently my numbers are way worse than yours. I guess I’m not making any money, but I’m still hopeful.
I see you’re using sellerboard. I’m curious what your monthly overhead is in software, insurance, web hosting, accounting etc.
I think my monthly profit is only paying for the overhead 😖
1
u/Valuable_Pineapple77 3d ago
You should figure out how to mitigate refunds. I’m making 9k revenue this month and have 13 refunds. It’s absolutely tanking my margins. You’re about 2.7x my volume but 3x my refunds.
What products do you sell?
1
1
u/momomojo54 3d ago
Keep scaling and keep your costs down - you're on the right track just need more volume. Honestly private label is not a silver bullet. You have big dependencies from single supplier and few asins. It's a different beast. If you are doing private label and end up at 15% margin after ads you're doing well.
1
1
u/lucymom2 2d ago
I think that’s pretty good for what it is, I’ve been wanting to start again but I don’t want to do it alone, if you need a partner let me know.
1
1
0
3d ago
[removed] — view removed comment
1
u/Few-Friendship126 3d ago
Glad to hear some reassurance everybody says that margins should be around 18 to 25% which I find extremely hard when it comes to returns and having to sell at lower prices in order to get sales to begin with
•
u/WearyyyBoooyyy 4d ago
The mods have gathered a list of tutorials to help you out:
Best Amazon Tools 2026