{"id":19899,"date":"2022-12-12T12:59:34","date_gmt":"2022-12-12T12:59:34","guid":{"rendered":"https:\/\/staging.sellerapp.com\/blog\/?p=19899"},"modified":"2026-01-07T16:22:39","modified_gmt":"2026-01-07T10:52:39","slug":"amazon-profit-and-loss-statement","status":"publish","type":"post","link":"https:\/\/www.sellerapp.com\/blog\/amazon-profit-and-loss-statement\/","title":{"rendered":"What Should Every Seller Know About Profit and Loss Statements on Amazon"},"content":{"rendered":"\n<p class=\"has-text-align-center\"><em>\u201cYour business success depends on knowing your numbers.\u201d<\/em><\/p>\n\n\n\n<p>The main goal of an <a href=\"https:\/\/www.sellerapp.com\/blog\/amazon-seller-central-guide\/\">Amazon seller<\/a> is to get more<strong> profits<\/strong> and increase the <strong>earning potential<\/strong> over time.&nbsp;<\/p>\n\n\n\n<p>But that doesn\u2019t happen all the time.&nbsp;<\/p>\n\n\n\n<p>Joe started his<a href=\"https:\/\/www.sellerapp.com\/blog\/get-the-most-out-of-your-amazon-business\/\"> Amazon business<\/a> in 2025, and he quickly crossed $100,000 in sales with competitive pricing and aggressive advertising.&nbsp;<\/p>\n\n\n\n<p>He thought he had hit the jackpot, only to realize his net profit at the end of the year was only $200.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><img decoding=\"async\" width=\"1080\" height=\"1080\" src=\"https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/amazon-profit-loss.jpg\" alt=\"amazon profit and loss meme\" class=\"wp-image-19902\" style=\"width:566px;height:566px\" title=\"\" srcset=\"https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/amazon-profit-loss.jpg 1080w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/amazon-profit-loss-300x300.jpg 300w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/amazon-profit-loss-768x768.jpg 768w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/amazon-profit-loss-80x80.jpg 80w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/amazon-profit-loss-110x110.jpg 110w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/amazon-profit-loss-200x200.jpg 200w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/amazon-profit-loss-380x380.jpg 380w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/amazon-profit-loss-255x255.jpg 255w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/amazon-profit-loss-550x550.jpg 550w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/amazon-profit-loss-800x800.jpg 800w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/amazon-profit-loss-120x120.jpg 120w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/figure>\n<\/div>\n\n\n<p>Joe is not alone! Many sellers on Amazon go through the same struggle because they don\u2019t track profits for their business.<\/p>\n\n\n\n<p>The good thing is you can avoid that by tracking the profit &amp; loss statement of your business and ensuring steady growth.&nbsp;<\/p>\n\n\n\n<p>This isn\u2019t difficult. This article explains everything you need to know about Profit and Loss (P&amp;L) statements for Amazon sellers.<\/p>\n\n\n\n<p><strong>Quick Guide:<\/strong><\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><a href=\"#1\">What is a profit &amp; loss report for Amazon&#8217;s business?<\/a><\/li>\n\n\n\n<li><a href=\"#2\">P&amp;L terminology explained<\/a><\/li>\n\n\n\n<li><a href=\"#3\">How to create a P&amp;L statement as an Amazon seller?<\/a><\/li>\n\n\n\n<li><a href=\"#4\">How to analyze P&amp;L statements for your business?<\/a><\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"1\"><strong>Why is a Profit &amp; Loss Statement Important for Your Business?<\/strong><\/h2>\n\n\n\n<p>A profit and loss statement (P&amp;L) helps you understand your business\u2019s revenue, costs, and expenses over time.<\/p>\n\n\n\n<p>You can use this statement to understand the growth of your business and make more strategic decisions to maximize profits.&nbsp;<\/p>\n\n\n\n<p>For example, if you see your <a href=\"https:\/\/www.sellerapp.com\/blog\/amazon-advertising-cost\/\">Amazon advertising costs<\/a> have increased significantly over the past few months, but the net profit has not improved, you can take some steps to increase the net profit, like<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Reducing the cost of goods,&nbsp;<\/li>\n\n\n\n<li>Increasing product price,&nbsp;<\/li>\n\n\n\n<li>Investing in building a brand to <a href=\"https:\/\/www.sellerapp.com\/blog\/amazon-seo-guide\/\">get more organic sales<\/a>, etc.&nbsp;<\/li>\n\n\n\n<li>P&amp;L statement also helps you make better business decisions.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Let\u2019s say you\u2019ve set a goal to increase sales by 30% YoY. During the P&amp;L analysis, you see the sales are lower than expected, but your profits are better than the previous year. You can then invest more money in advertising to increase your sales numbers.&nbsp;<\/p>\n\n\n\n<p>On the other hand, if your sales are higher than anticipated, you can focus more time on <a href=\"https:\/\/www.sellerapp.com\/blog\/amazon-ppc-advertising\/\">optimizing advertising<\/a> and marketing efforts to <strong>maximize your profits<\/strong> or <strong>invest in a new product line<\/strong> to grow your business further.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"2\"><strong>P&amp;L Terminology Explained<\/strong><\/h2>\n\n\n\n<p>P&amp;L statements are filled with tons of financial indicators. And it\u2019s important to understand these indicators to make sense of the report.<\/p>\n\n\n\n<p>Terminologies you should know:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-sales-revenue\"><strong>Sales Revenue<\/strong><\/h3>\n\n\n\n<p>It\u2019s the total amount of money earned from selling products before any deductions, like the cost of goods sold or expenses related to the sale of the products.<\/p>\n\n\n\n<p>Sales revenue often helps you determine business valuation and set revenue targets for long-term growth.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Formula:<\/h4>\n\n\n\n<pre class=\"wp-block-verse has-medium-font-size\"><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-luminous-vivid-orange-color\">Sales Revenue: Number of units sold x Average selling price per unit.&nbsp;<\/mark><\/strong><\/pre>\n\n\n\n<p>For example, if you sell 100 units of a product for $10 per unit, the <strong>sales revenue <\/strong>would be <strong>100 x $10 = $1,000.&nbsp;<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Net Sales Revenue:&nbsp;<\/strong><\/h3>\n\n\n\n<p>Net sales revenue is the total amount you earn from selling products after deducting the discounts, <a href=\"https:\/\/www.sellerapp.com\/blog\/reimbursements\/\">customer reimbursements<\/a>, accounting costs, and other costs.&nbsp;<\/p>\n\n\n\n<p>It helps you understand the <strong>profitability <\/strong>of the products.<\/p>\n\n\n\n<pre class=\"wp-block-verse has-medium-font-size\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-luminous-vivid-orange-color\"><strong>Net sales revenue = Sales revenue - Sales Returns - Discount - Other Deductions.<\/strong><\/mark><\/pre>\n\n\n\n<p>For example, let&#8217;s say you sell 2000 units of a product at $20 each, give a $1,000 discount, and get 20 items in return from the customers. Then the net sales revenue will be:<\/p>\n\n\n\n<p><strong>Net Sales Revenue = (2000 x $20) &#8211; $1000 &#8211; (20 x $20) = $38,600<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Cost of Goods Sold<\/strong><\/h3>\n\n\n\n<p>The cost of Goods Sold, or COGS is the total cost of producing a product. This includes the cost of materials, labor, inbound and outbound shipping costs, and other expenses directly related to the production of the product.&nbsp;&nbsp;<\/p>\n\n\n\n<p>If you don\u2019t manufacture the product, the COGS will be the cost of purchasing the product from suppliers.&nbsp;<\/p>\n\n\n\n<p>COGS is a variable cost and often fluctuates depending on various factors, such as the price of raw materials, labor cost, inventory cost, and many other factors.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Overhead Cost<\/strong><\/h3>\n\n\n\n<p><strong><br><\/strong>These are the fixed cost for your business not directly related to the production or sales of the product but are necessary for the business operations, such as<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Advertising costs,<\/li>\n\n\n\n<li>Marketing costs,<\/li>\n\n\n\n<li>Employee salary,<\/li>\n\n\n\n<li>Amazon fees,<\/li>\n\n\n\n<li>Warehouse costs, etc.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Gross Profit<\/strong><\/h3>\n\n\n\n<p>Gross profit is net sales after deducting the COGS.&nbsp;<\/p>\n\n\n\n<p>In layman\u2019s terms, if you sell a product for $100 and the COGS is $50, the<strong> gross profit<\/strong> would be <strong>$100 &#8211; $50 = $50.<\/strong><\/p>\n\n\n\n<p>But this is not the true profit..!<\/p>\n\n\n\n<p><br>Gross profit does not consider other expenses, such as overhead costs or taxes. So, your net profit comes into the picture.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Amazon <strong>Net Profit\/ Net Income<\/strong><\/h3>\n\n\n\n<p>Net profit is the actual profit left in your bank account after deducting the COGS, taxes, debts, and overhead expenses.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<pre class=\"wp-block-verse has-medium-font-size\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-luminous-vivid-orange-color\"><strong>Net Profit = Gross Profit - COGS - Taxes - Overhead expenses<\/strong><\/mark><\/pre>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-\"><\/h2>\n\n\n\n<p>For example, if you sell a product for $100 with a COGS of $50 and overhead costs of $20, the <strong>net profit <\/strong>would be <strong>$100 &#8211; $50 &#8211; $20 = $30.<\/strong><\/p>\n\n\n\n<p>Now, there\u2019s an easy way to estimate the net profit of a product on Amazon with <strong>SellerApp\u2019s FBA calculator<\/strong>.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Install the SellerApp Chrome Extension.<\/li>\n\n\n\n<li>Go to a product listing similar to yours on Amazon.&nbsp;<\/li>\n\n\n\n<li>Click on <a href=\"https:\/\/www.sellerapp.com\/sellerapp-chrome-extension.html\">SellerApp chrome extension<\/a> &gt;&gt; Profit calculator&nbsp;<\/li>\n\n\n\n<li>Add COGS and shipping costs to the calculator to get the estimated net profit.&nbsp;<\/li>\n<\/ul>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img decoding=\"async\" width=\"417\" height=\"512\" src=\"https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/fba-calculator.png\" alt=\"amazon fba calculator\" class=\"wp-image-19905\" title=\"\" srcset=\"https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/fba-calculator.png 417w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/fba-calculator-300x368.png 300w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/fba-calculator-110x135.png 110w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/fba-calculator-200x246.png 200w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/fba-calculator-380x467.png 380w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/fba-calculator-255x313.png 255w\" sizes=\"(max-width: 417px) 100vw, 417px\" \/><\/figure>\n<\/div>\n\n\n<h2 class=\"wp-block-heading\" id=\"3\">How to Create a P&amp;L Statement as an Amazon Seller<\/h2>\n\n\n\n<p>We know you dread creating the P&amp;L statement for your business.<\/p>\n\n\n\n<p>We do too!&nbsp;<\/p>\n\n\n\n<p>But don\u2019t skip it if you\u2019re serious about growing your income.<\/p>\n\n\n\n<p>Follow the simple steps to create a simple P&amp;L statement for your business.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Create a Simple Income &amp; Expense Tracking Sheet<\/strong><\/h3>\n\n\n\n<p>P&amp;L statement begins with creating a simple income &amp; expenses tracking spreadsheet like the following:<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><img decoding=\"async\" width=\"512\" height=\"244\" src=\"https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/amazon-sales-net-profit-1.png\" alt=\"create a simple Income and expense tracking sheet\" class=\"wp-image-19939\" style=\"width:699px;height:333px\" title=\"\" srcset=\"https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/amazon-sales-net-profit-1.png 512w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/amazon-sales-net-profit-1-300x143.png 300w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/amazon-sales-net-profit-1-110x52.png 110w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/amazon-sales-net-profit-1-200x95.png 200w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/amazon-sales-net-profit-1-380x181.png 380w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/amazon-sales-net-profit-1-255x122.png 255w\" sizes=\"(max-width: 512px) 100vw, 512px\" \/><\/figure>\n<\/div>\n\n\n<p class=\"has-text-align-center\"><a href=\"https:\/\/docs.google.com\/spreadsheets\/d\/1kOML8YTlIp9_Ksx6QVY_OlcLDjvl9ZQIC6DpL6FE8eQ\/edit?usp=sharing\" target=\"_blank\" rel=\"noopener\">Get the template for free<\/a>.<\/p>\n\n\n\n<p>Here, add all the expenses and income month on month to calculate the net profit.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Get the Net Sales Revenue from Amazon<\/strong><\/h3>\n\n\n\n<p>Next, calculate the net sales revenue of your business.&nbsp;<\/p>\n\n\n\n<p>Thankfully, Amazon has made it easier to get net sales revenue numbers from the Seller Central account.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Log in to your <a href=\"https:\/\/sellercentral.amazon.com\/\" rel=\"nofollow noopener\" target=\"_blank\">Seller Central account<\/a> and go to Reports &gt; Payments.<\/li>\n<\/ul>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img decoding=\"async\" width=\"512\" height=\"248\" src=\"https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/net-sales-revenue-amazon.png\" alt=\"net sales revenue from amazon\" class=\"wp-image-19907\" title=\"\" srcset=\"https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/net-sales-revenue-amazon.png 512w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/net-sales-revenue-amazon-300x145.png 300w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/net-sales-revenue-amazon-110x53.png 110w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/net-sales-revenue-amazon-200x97.png 200w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/net-sales-revenue-amazon-380x184.png 380w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/net-sales-revenue-amazon-255x124.png 255w\" sizes=\"(max-width: 512px) 100vw, 512px\" \/><\/figure>\n<\/div>\n\n\n<ul class=\"wp-block-list\">\n<li>Go to the <strong>Date range report<\/strong> and click on Generate report.&nbsp;<\/li>\n<\/ul>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img decoding=\"async\" width=\"512\" height=\"222\" src=\"https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/data-range-report.png\" alt=\"amazon data range report\" class=\"wp-image-19908\" title=\"\" srcset=\"https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/data-range-report.png 512w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/data-range-report-300x130.png 300w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/data-range-report-110x48.png 110w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/data-range-report-200x87.png 200w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/data-range-report-380x165.png 380w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/data-range-report-255x111.png 255w\" sizes=\"(max-width: 512px) 100vw, 512px\" \/><\/figure>\n<\/div>\n\n\n<ul class=\"wp-block-list\">\n<li>Select Summary. If you want to create a monthly statement, choose that timeframe, and click Generate.<\/li>\n<\/ul>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img decoding=\"async\" width=\"512\" height=\"495\" src=\"https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/generate-data-range.png\" alt=\"generate data range report\" class=\"wp-image-19909\" title=\"\" srcset=\"https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/generate-data-range.png 512w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/generate-data-range-300x290.png 300w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/generate-data-range-110x106.png 110w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/generate-data-range-200x193.png 200w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/generate-data-range-380x367.png 380w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/generate-data-range-255x247.png 255w\" sizes=\"(max-width: 512px) 100vw, 512px\" \/><\/figure>\n<\/div>\n\n\n<ul class=\"wp-block-list\">\n<li>It shows the total Amazon expenses and net sales revenue for your business for a specific period. Add these data to your Income &amp; Expense tracker sheet.&nbsp;<\/li>\n<\/ul>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img decoding=\"async\" width=\"1055\" height=\"811\" src=\"https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/amazon-sales-reports.png\" alt=\"amazon services seller central\" class=\"wp-image-19910\" title=\"\" srcset=\"https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/amazon-sales-reports.png 1055w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/amazon-sales-reports-300x231.png 300w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/amazon-sales-reports-768x590.png 768w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/amazon-sales-reports-110x85.png 110w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/amazon-sales-reports-200x154.png 200w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/amazon-sales-reports-380x292.png 380w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/amazon-sales-reports-255x196.png 255w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/amazon-sales-reports-550x423.png 550w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/amazon-sales-reports-800x615.png 800w\" sizes=\"(max-width: 1055px) 100vw, 1055px\" \/><\/figure>\n<\/div>\n\n\n<p>In this example, you can see the net sales revenue for January is <strong>$25,636.13<\/strong>, and the total Amazon fee is <strong>$5189.95<\/strong>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Figure Out the Cost of Goods Sold<\/strong><\/h3>\n\n\n\n<p>The COGS helps you understand how much money you\u2019re investing in the product directly.&nbsp;<\/p>\n\n\n\n<p>Let\u2019s say you\u2019re selling a wallet, then you must include the cost of purchases as COGS for the product for the specific month.<\/p>\n\n\n\n<p>If you\u2019re manufacturing the wallets, you need to include the material cost, labor cost, shipping cost, and other manufacturing-related costs in your COGS for the month.&nbsp;<\/p>\n\n\n\n<p>For example, the material cost for manufacturing wallets in January is $2,500, shipping &amp; handling charges are $1,000, and labor costs are $1,500. Then the COGS will be <strong>($2,500 + $1,000 + $1,500) = $5,000<\/strong> for the month.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1100\" height=\"122\" src=\"https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/Total-COGS-1100x122.png\" alt=\"cost of amazon goods sold\" class=\"wp-image-19911\" title=\"\" srcset=\"https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/Total-COGS-1100x122.png 1100w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/Total-COGS-300x33.png 300w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/Total-COGS-768x85.png 768w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/Total-COGS-1536x170.png 1536w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/Total-COGS-110x12.png 110w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/Total-COGS-200x22.png 200w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/Total-COGS-380x42.png 380w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/Total-COGS-255x28.png 255w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/Total-COGS-550x61.png 550w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/Total-COGS-800x89.png 800w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/Total-COGS-1160x128.png 1160w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/Total-COGS.png 1600w\" sizes=\"(max-width: 1100px) 100vw, 1100px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Calculate the Gross Profit<\/strong><\/h3>\n\n\n\n<p>Next, subtract the COGS from net sales revenue to get the gross profit\/loss for your business.<\/p>\n\n\n\n<pre class=\"wp-block-verse has-medium-font-size\"><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-luminous-vivid-orange-color\"><strong>Gross Profit = Net Sales Revenue  - Cost of Goods Sold<\/strong><\/mark><\/pre>\n\n\n\n<p>In the above example, the <strong>net sales revenue<\/strong> is<strong>&nbsp; $25,636.13<\/strong>, and the <strong>COGS<\/strong> is <strong>$5,000<\/strong>. So, the gross profit will be: $25,636.13 &#8211; $5,000<strong> = $20,636<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Calculate Overhead Costs<\/h3>\n\n\n\n<p>Accurately tracking overhead costs is essential to calculate profits in the <a href=\"https:\/\/www.sellerapp.com\/blog\/ecommerce-business-guide\/\">eCommerce business<\/a>.&nbsp;<\/p>\n\n\n\n<p>We recommend keeping records of everything to ensure you don\u2019t pull your hair while calculating the overhead costs at the end of the month.&nbsp;<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><img decoding=\"async\" width=\"600\" height=\"720\" src=\"https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/calculate-overhead-cost.png\" alt=\"Calculate Amazon Overhead Costs\" class=\"wp-image-19912\" style=\"width:398px;height:477px\" title=\"\" srcset=\"https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/calculate-overhead-cost.png 600w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/calculate-overhead-cost-300x360.png 300w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/calculate-overhead-cost-110x132.png 110w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/calculate-overhead-cost-200x240.png 200w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/calculate-overhead-cost-380x456.png 380w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/calculate-overhead-cost-255x306.png 255w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/calculate-overhead-cost-550x660.png 550w\" sizes=\"(max-width: 600px) 100vw, 600px\" \/><\/figure>\n<\/div>\n\n\n<p>Let\u2019s say, in January, the operating expenses of running your business were:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Marketing and advertising costs = $5,500<\/li>\n\n\n\n<li>Salaries = $2,300<\/li>\n\n\n\n<li>Warehouse costs = $1,000<\/li>\n\n\n\n<li>Insurance = $500<\/li>\n\n\n\n<li>Amazon expenses (from Amazon date range report) = $5,189<\/li>\n<\/ul>\n\n\n\n<p>The total overhead cost for January is:<strong> ($5,500 + $2,300 + $1,000 + $500 + $5,189) = $14,489<\/strong><\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img decoding=\"async\" width=\"1100\" height=\"122\" src=\"https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/operating-expenses-1100x122.png\" alt=\"total amazon overhead cost\" class=\"wp-image-19913\" title=\"\" srcset=\"https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/operating-expenses-1100x122.png 1100w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/operating-expenses-300x33.png 300w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/operating-expenses-768x85.png 768w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/operating-expenses-1536x171.png 1536w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/operating-expenses-110x12.png 110w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/operating-expenses-200x22.png 200w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/operating-expenses-380x42.png 380w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/operating-expenses-255x28.png 255w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/operating-expenses-550x61.png 550w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/operating-expenses-800x89.png 800w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/operating-expenses-1160x129.png 1160w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/operating-expenses.png 1600w\" sizes=\"(max-width: 1100px) 100vw, 1100px\" \/><\/figure>\n<\/div>\n\n\n<h3 class=\"wp-block-heading\"><strong>Find Out Your Operating Profit<\/strong><\/h3>\n\n\n\n<p>Subtracting the overhead costs from the gross profit will give you the<strong> operating profit.<\/strong>&nbsp;<\/p>\n\n\n\n<p>If your gross profit in January is <strong>$20,636<\/strong>, and the overhead<strong> <\/strong>cost is <strong>$14,489, <\/strong>then the operating profit is<strong> ($20,636 &#8211; $14,489) = $6,147<\/strong><\/p>\n\n\n\n<p><strong>Operating Profit = Gross Profit &#8211; Overhead Costs<\/strong><\/p>\n\n\n\n<p>If you\u2019ve other income streams, like interests, or dividends on your investments, add that to the operating profit to get the earnings before interest, taxes, depreciation, and amortization or <strong>EBITDA.<\/strong>&nbsp;<\/p>\n\n\n\n<p>If selling on Amazon is your only source of income, then the operating profit equals your EBITDA.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Calculate Your Net Income<\/strong><\/h3>\n\n\n\n<p>Now that you have the EBITDA, calculate your tax based on your business type and subtract that from the EBITDA to get the <strong>net or true income<\/strong>.<\/p>\n\n\n\n<p>Let\u2019s say in January, your EBITDA is <strong>$6,147, <\/strong>and the total tax is <strong>$1,278; <\/strong>then, your net profit will be $6,147 &#8211; $1,278 = <strong>$4,869.<\/strong><\/p>\n\n\n\n<p>Here\u2019s what the P&amp;L data looks like in the spreadsheet:<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img decoding=\"async\" width=\"1100\" height=\"504\" src=\"https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/net-calculation-1100x504.png\" alt=\"calculate amazon net profit\" class=\"wp-image-19914\" title=\"\" srcset=\"https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/net-calculation-1100x504.png 1100w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/net-calculation-300x137.png 300w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/net-calculation-768x352.png 768w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/net-calculation-1536x704.png 1536w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/net-calculation-110x50.png 110w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/net-calculation-200x92.png 200w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/net-calculation-380x174.png 380w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/net-calculation-255x117.png 255w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/net-calculation-550x252.png 550w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/net-calculation-800x367.png 800w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/net-calculation-1160x531.png 1160w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/net-calculation.png 1600w\" sizes=\"(max-width: 1100px) 100vw, 1100px\" \/><\/figure>\n<\/div>\n\n\n<p><strong>Note: <\/strong>You don\u2019t have to give money from your profit as sales tax. Amazon takes care of collecting and filing the sales tax for almost all the states in the USA for a small fee of 2.9% per transaction.&nbsp;<\/p>\n\n\n\n<p>Learn more about Amazon sales tax from <a href=\"https:\/\/www.sellerapp.com\/blog\/amazon-sales-tax\/\">here.&nbsp;<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"4\">How to Analyze P&amp;L Statements to Grow Your Business<\/h2>\n\n\n\n<p>Understanding data can be intimidating. But if you can learn where to look, you\u2019ll quickly become a pro in no time.&nbsp;<\/p>\n\n\n\n<p>We\u2019ve gathered some easy ways to help you analyze the P&amp;L statement:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Review your sales revenue month-on-month to see if it\u2019s growing. If you notice a good spike in sales revenue in some months, what is the reason?<\/li>\n<\/ul>\n\n\n\n<p>Is it because of seasonal demand? Or did you increase the advertising budget for that month?<\/p>\n\n\n\n<p>Try to identify the reasons and replicate that in the future to increase sales.&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Next, review the COGS. It\u2019s the cost directly related to your product. It will naturally increase as the sales grow. But you can still figure out some ways to reduce the COGS.<\/li>\n<\/ul>\n\n\n\n<p>For example,&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Get more discounts from suppliers by ordering in bulk or paying in advance.<\/li>\n\n\n\n<li>Find cheaper suppliers with the same quality.&nbsp;<\/li>\n\n\n\n<li>Ask for a line of credit, and pay in installments to maintain a steady cash flow of your business.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Lastly, calculate the <a href=\"https:\/\/www.sellerapp.com\/blog\/amazon-profit-margin\/\">profit margin<\/a>, and see how your profit margin is faring compared to your competitors. If it&#8217;s lower, try optimizing the costs to increase your profit margin.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Examining these insights will give you a good idea about the financial health of your business and help you make strategic decisions.&nbsp;<\/p>\n\n\n\n<p><strong>Recommended Guide:<\/strong>&nbsp;<a href=\"https:\/\/www.sellerapp.com\/blog\/amazon-seller-payment-schedule\/\">How Does Amazon Seller Payment Schedule Work<\/a>?<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>The Hidden Costs in Your P&amp;L<\/strong><\/h2>\n\n\n\n<p>Most Amazon sellers track their obvious costs pretty well. Product cost, shipping, Amazon fees, advertising, you&#8217;ve got all that in your spreadsheet. What&#8217;s usually invisible until you really dig into it are payment processing fees, especially if you&#8217;re selling internationally or across multiple marketplaces. These fees hide in your bank statements and slowly eat away at profits without you realizing how much they&#8217;re actually costing.<\/p>\n\n\n\n<p>If you&#8217;re selling on Amazon US, Amazon UK, Amazon Germany, and Amazon Japan, every single marketplace payout comes with fees. Your bank charges you for receiving international wires, maybe $25 to $50 per transfer. <\/p>\n\n\n\n<p>Then they convert currencies at rates that are usually 2% to 4% worse than the actual market rate. On $100,000 in annual revenue across multiple marketplaces, you could easily be losing $3,000 to $5,000 annually just in payment processing costs. That&#8217;s not a small number. That&#8217;s potentially 5% of your profit margin disappearing before you even see it.<\/p>\n\n\n\n<p><a href=\"https:\/\/tracking.payoneer.com\/aff_c?offer_id=399&amp;aff_id=34520&amp;url_id=1200\" target=\"_blank\" rel=\"noopener\"><strong>Payoneer changes this math significantly<\/strong><\/a>. You receive payouts from all your Amazon marketplaces into one account with transparent, much lower fees. Currency conversions typically run 1% to 2% instead of your bank&#8217;s 3% to 4%. Wire transfer fees disappear because everything&#8217;s internal to Payoneer&#8217;s system. When you&#8217;re calculating true profitability and trying to figure out where you can optimize, reducing payment processing costs by $200 to $400 monthly adds up to real money over a year.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/tracking.payoneer.com\/aff_c?offer_id=399&amp;aff_id=34520&amp;url_id=1200\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" width=\"1100\" height=\"458\" src=\"https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/payoneer-sellerapp-1100x458-1.png\" alt=\"\" class=\"wp-image-32879\" title=\"\" srcset=\"https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/payoneer-sellerapp-1100x458-1.png 1100w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/payoneer-sellerapp-1100x458-1-300x125.png 300w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/payoneer-sellerapp-1100x458-1-768x320.png 768w, https:\/\/www.sellerapp.com\/blog\/wp-content\/uploads\/2022\/12\/payoneer-sellerapp-1100x458-1-215x90.png 215w\" sizes=\"(max-width: 1100px) 100vw, 1100px\" \/><\/a><\/figure>\n\n\n\n<p>The accounting side gets cleaner too. Payoneer provides detailed transaction reports that integrate with QuickBooks and other accounting software. Instead of trying to reconcile five different payment accounts and multiple currency conversions across various bank statements, you&#8217;ve got one clean statement. <\/p>\n\n\n\n<p>When you&#8217;re building accurate P&amp;L reports for tax time or trying to understand your actual margins, having clear visibility into payment costs makes everything easier. Some sellers find out they&#8217;re actually more profitable than they thought once they properly account for payment efficiency. Others realize they need to raise prices slightly to maintain margins after seeing the real cost of international payment processing.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Final Thoughts<\/h4>\n\n\n\n<p>Looking at the P&amp;L statement of your business is essential to drive growth for your business.&nbsp;<\/p>\n\n\n\n<p>From sales revenue to COGS, evaluating every metric helps you find opportunities to invest in marketing, advertising, and other departments to ensure your business is constantly growing.<\/p>\n\n\n\n<p>If you have multiple products, we recommend the <a href=\"https:\/\/www.sellerapp.com\/profit-dashboard.html\">SellerApp sales analytics<\/a> to study how your products perform at the ASIN level, make changes to COGS or overhead costs and increase net profits.&nbsp;<\/p>\n\n\n\n<p>Found this helpful? Comment below and tell us what other topics you want to learn more about.<\/p>\n\n\n\n<p>Recommended read:<\/p>\n\n\n\n<p><a href=\"https:\/\/www.sellerapp.com\/blog\/inbound-outbound-logistics\/#4\">Benefits of having effective inbound and outbound logistics<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>\u201cYour business success depends on knowing your numbers.\u201d The main goal of an Amazon seller is to get more profits and increase the earning potential over time.&nbsp; But that doesn\u2019t happen all the time.&nbsp; Joe started his Amazon business in 2025, and he quickly crossed $100,000 in sales with competitive pricing and aggressive advertising.&nbsp; He&hellip;<\/p>\n","protected":false},"author":38,"featured_media":19900,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[362,361,259],"tags":[],"class_list":["post-19899","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-vendor-central","category-seller-central","category-sellerapp-reviews-updates"],"_links":{"self":[{"href":"https:\/\/www.sellerapp.com\/blog\/wp-json\/wp\/v2\/posts\/19899","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sellerapp.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sellerapp.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sellerapp.com\/blog\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sellerapp.com\/blog\/wp-json\/wp\/v2\/comments?post=19899"}],"version-history":[{"count":5,"href":"https:\/\/www.sellerapp.com\/blog\/wp-json\/wp\/v2\/posts\/19899\/revisions"}],"predecessor-version":[{"id":32899,"href":"https:\/\/www.sellerapp.com\/blog\/wp-json\/wp\/v2\/posts\/19899\/revisions\/32899"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sellerapp.com\/blog\/wp-json\/wp\/v2\/media\/19900"}],"wp:attachment":[{"href":"https:\/\/www.sellerapp.com\/blog\/wp-json\/wp\/v2\/media?parent=19899"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sellerapp.com\/blog\/wp-json\/wp\/v2\/categories?post=19899"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sellerapp.com\/blog\/wp-json\/wp\/v2\/tags?post=19899"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}