- Patrick Muir
- On January 14, 2015
- 0 Comments
I lost money on my first order.
While waiting for my order of 9-6-3 boxes to arrive to create my first Amazon listing, I decided to list a 3-pack of Barney Butter that I would ship directly. I charged $29.99 plus $6.17 for shipping. It was the lowest price and I won the Buy Box.
The Buy Box is the box on a product detail page where customers can begin the purchasing process by adding items to their shopping carts.
A key feature of the Amazon platform is that multiple sellers can offer the same product. If more than one eligible seller offers a product, they may compete for the Buy Box for that product. You have to have a professional account to win the buy box against other sellers with professional accounts.
I lost money because I miscalculated shipping costs. Amazon estimated that shipping costs would be $6.17, but that was a very poor estimate. Instead, it was $11.30. I mistakenly assumed that that Amazon would let you ship using their suppliers and preferred pricing. Instead, I used the mid-size flat rate box from the USPS.
The other big cost driver was the $5.43 Amazon referral fee.
In the end, I was off by about $3.