Navigating Your Fulfillment by Amazon Payments Report
- October 21, 2015 | Marcus DeHart
When I received my first-ever paycheck, I was startled by how much of my earnings were being syphoned off for Federal income taxes, FICA, and Medicare. As a seller on Amazon, you might feel the same way when you first look at your payments report -- what are all these charges taking a bite of my profits?
Let’s take a look at a typical payments report and see if we can make sense of it.
The first row of the report contains your field names. Just below that you’ll find your settlement summary, which includes the settlement start and end dates, the date and amount of the deposit to your checking account, and the currency. Pretty simple so far, but wait. What are all those rows below the summary that seem to go on forever? What do all these codes and numbers mean?
Every row contains a different transaction. So a single order will contain multiple transactions broken down by Order ID, Amount Type, and Amount Description. For example, in one order I sold a widget for $18.99, so that’s the first line of my report. The Amount Type is “ItemPrice,” the Amount Description is “Principal” and the amount is 18.99. But I also charge $1.99 for shipping, so the second row shows another transaction for the order with Amount Type = “ItemPrice,” Amount Description = “Shipping” and the amount is 1.99. Both of these numbers are positive, and I’m pleased to see that I’ve earned $20.98 on my sale.
Then I read the next row. Oh my. The first thing I notice is that the Amount Type has changed to “ItemFees.” OK, I knew that FBA wasn’t free, so let’s see how much it cost me on this transaction. On this order I see that there are four ItemFees:
- FBAPerOrderFulfillmentFee: -1
- FBAPerUnitFulfillmentFee: -1.04
- FBAWeightBasedFee: -1.98
- Commission: -2.85
The first three, as the names suggest, are my fees for using FBA. The fourth is the percentage Amazon takes for allowing me to sell on Amazon. So from my $20.98 I subtract all of these fees to get $14.11. Not bad. After all, my own costs for fulfillment are greater than the $4.02 I am paying FBA to do the job.
Now I’m ready to review the next transaction. Oh, what’s that? The same order has another transaction with an Amount Type called “Promotion” and a description of “Shipping.” I don’t remember running any shipping promotion on this product. Then I notice the amount is -1.99, the same as my shipping price only negative. Well of course. I didn’t do the shipping, so there’s no reason I should receive the cost of shipping that they buyer has paid. Amazon did the work, so they get the money. So I subtract that from my $14.11 and end up with $12.12.
That’s a typical order. You might also find transactions that will need additional research. For instance, there’s an Amount Type for "FBAInventoryAdjustments." These cover incidents where your inventory gets lost or damaged while shipping to the fulfillment center or while it’s in the warehouse.
You might also see additional Item Fees related to customer returns, refunds, and chargebacks to name a few. Item Price can also include gift wrapping, restocking fees, and taxes. Then there’s the mysterious “other-transaction” category, a catch-all for adjustments, recharges, disposals, and removals. And if you’re using FBA’s partnered carriers to ship your inventory to the fulfillment centers, you’ll likely encounter an Amount Type called “ShipmentFees” described as “FBA transportation fee.” This is what you’re paying Amazon to pass onto the carrier.
Parsing the Data
In 10 Skills You Need To Be A Successful Amazon FBA Seller I asked the question, “Can you extrapolate it?” I emphasized the importance of being able to interpret data using a spreadsheet application like Microsoft Excel. This is where those Excel skills come in handy.
When I work with a large amount of data like this, I like to create a pivot table. This flexible tool enables me to summarize by any of the data in the table. I can get a summary by order, product, fee, you name it. From that high-level overview I can drill down to specific products or fees that I want to understand better.
By converting the raw data to a table or applying a filter I can sort and search by any column. So if I want to see all the sales for a single product, I filter that table using the SKU column. That way I can see how many units I have sold during the settlement period and how much I paid in fees, and check for lost or damaged inventory.
My first priority when reviewing the Payment Report is to make sure that my records are lining up with what Amazon is reporting. If I see adjustments that I don’t understand, I might need to contact Seller Support to find out what’s going on with my inventory. Another takeaway from this data is to determine if I’m pricing my products right and if FBA is a good fit for every product. Conversely I will be able to tell if the products I'm fulfilling myself might be more profitable if I included them with my FBA inventory.