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Too Risky?

by antis
9 replies
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Hello, what do ya'll think, if I invest 50$ in the product (one unit), and after all the fees, I get a profit of 10$, is that too risky?
I've heard a lot of people saying that you should make a profit at least what your purchasing cost is (if I buy for 50$, I make 50$ after all the fees). Is that true, or is it impossible?

P.S I am importing products from China
#risky
  • Profile picture of the author kjamesnv
    To me that profit margin is way too low. Looks for products that you can sell for at least 2-3X your cost.
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  • Profile picture of the author antis
    But the other thing is that I pay a lot of taxes and fees, like:
    Shipping;
    4.4% Paypal fees to China;
    Custom Clearance;
    Fee for labeling my products;
    FBA fees;
    Ebay and Paypal fees after a sale (or Amazon, if I make a sale on Amazon)

    That looks like a lot to me...
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  • Profile picture of the author antis
    Plus 5% income tax to my country
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    • Profile picture of the author hbennick
      Originally Posted by antis View Post

      Plus 5% income tax to my country
      What is your final profit? What do you want to make a month? Do the numbers work? If you expect to make $1000 on this product, and your final profit is $5, you need to sell 200 units. How much time will it take to sell 200 units? If you need to dedicate 10 minutes per sale, it's about 34 hours of your work.

      It's all math...
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      • Profile picture of the author antis
        Originally Posted by hbennick View Post

        What is your final profit? What do you want to make a month? Do the numbers work? If you expect to make $1000 on this product, and your final profit is $5, you need to sell 200 units. How much time will it take to sell 200 units? If you need to dedicate 10 minutes per sale, it's about 34 hours of your work.

        It's all math...
        I know it, but that is not what I asked
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        • Profile picture of the author hbennick
          Originally Posted by antis View Post

          I know it, but that is not what I asked
          Then I guess it depends on how you define risk. I include "I don't want to waste a bunch of time for small profits" into risk. How do you define "risk" in this scenario?
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          https://www.facebook.com/groups/1386831354951122/
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  • Profile picture of the author DWaters
    Your question did not specify that you are selling on FBA but the thread seems to indicate that. I would agree that the margin of $10 on an item priced at $50 is rather small margin. I would looke for a better deal.

    Exceptions to this would be if you are the only seller of that product and if it sells quickly and consistently. If you start to get other sellers lowering their prices that you will not have much margin room to work with.
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  • Profile picture of the author Stephanie L
    Interesting. I would think a $10 profit off a $50 product ain't bad. But, of course, I'm a total newbie.
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    • Profile picture of the author mlepisto
      Originally Posted by Stephanie L View Post

      Interesting. I would think a $10 profit off a $50 product ain't bad. But, of course, I'm a total newbie.
      It's risky to me. Doesn't give you the option to lower the price should you need to in order to liquidate your stock if you want to get out, or if a competitive product becomes cheaper and you have to adjust to be in the same price range.
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