Hi guys,
I’m very confused here when doing my profit calculation. Please tell me if I’m doing this right or wrong. I’m deducting the expenses from the income and then I deduct the COGS that was £5600 (units sold in this period). Doing it this way I’m making a loss that does not make sense as I have products that do well that sell for £25+ that has a net margin of £10 per order. Can someone help me out here please.( we are vat registered).
Net margin of £10 after all Amazon fees? FBA and commission? You’ve got a 3k advertising spend in there plus adjustments presumably for inbound FBA shipments taking another £1000. Net margin per order is fine but you need to take into account all elements of operational overheads in order to work out net profit vs gross profit.
The issue I have is that when I calculate profit, after deducting ad fees, VAT, VAT on fees, product cost, and everything, the net profit comes out to around £6–7k, but somehow the reports show I’m at a loss.
Because the total sales for the month on the business report are £28k, and on this report the income is only £20k, I don’t really know how to calculate my profit. One more thing, on the report above, there’s £7k listed under bank transfers. Does that come out of the total income of £20k, or is it separate?
If you’re VAT registered and calculating profit, make sure you’re accounting for all VAT correctly. Start with your total income (excluding VAT if reported that way), then subtract your Amazon fees, advertising costs, and other expenses. After that, subtract your cost of goods sold (COGS) based on the units sold, not total inventory purchased. Also, ensure you’re matching sales with corresponding COGS within the same accounting period. If your calculations still show a loss despite healthy margins, double-check whether VAT on Amazon fees, shipping, or any returns/refunds is skewing the numbers. Many sellers miscalculate by not properly factoring VAT or by mixing up periods when calculating COGS.
Sorry to jump on this post as I don’t have any advice as this report confuses me.
When reporting sales etc for VAT recording how does everyone make sense of this report?
The VAT you see on the screenshot is just an estimation from Amazon, you don’t actually pay that amount to Amazon.
