How To Use Helium 10 Profitability Calculator - Review And Tutorial

Helium 10 Profitability Calculator Review And Tutorial (How To Use This Amazon FBA Calculator)

Hey there, welcome to my blog post on the Helium 10 Profitability Calculator review and tutorial!

Today, I have Carrie Miller from Helium 10 with me to show you how to use this powerful tool.

Together, we'll break it down and make it super easy to understand.

So, let's get started!

Helium 10 Profitability Calculator And Its Features

Whether you're starting a new product on Amazon or looking to optimize your current one, the Helium 10 Profitability Calculator can help you make sense of the numbers.

It's a part of the Helium 10 Chrome extension.

So, first things first, let's talk about where to find the Helium 10 Chrome extension.

My Blog Post Based On This Video: Helium 10 Chrome Extension - Detailed Review & Tutorial

Well, you can download it for free through the button below. 🤩

Download Free Helium 10 Chrome Extension

But wait!!!

Do keep in mind that it's an exclusive free version for you and it comes with some limitations.

If you want more options and features, you might consider upgrading to the paid version.

By the way, if you're interested, you can also get a free trial of Helium 10 and enjoy some discounts through the button below.

Helium 10 Free Trial + Discounts

Now, let's dive into the main topic of today's video: the Helium 10 Profitability Calculator.

But before we get started, let me introduce you to Carrie.

She's not only a representative from Helium 10 but also a successful seller on Amazon and Walmart.

In fact, we have other videos and articles with Carrie discussing selling at Walmart.

If you're curious about expanding your business to Walmart, these resources will provide you with valuable insights on how the platform works and how Helium 10 can support your Walmart endeavors.

My Blog Post Based On This Video: Review of Helium 10 Tools For Walmart

Back to the Helium 10 Profitability Calculator.

This tool is crucial because it helps us understand our costs before we even launch a product on Amazon.

It allows us to assess our potential profitability and make informed decisions.

Launching a product without considering these factors can be risky and may not yield the desired results.

So, without further ado, let's see how the Profitability Calculator works.

At this point, Carrie shared her screen with me.

She had already pulled up an Amazon page featuring a garlic press, which is often used as an example in these cases.

Whatever she shared, I'll break it down for you in a way that's easy to understand.

You can think of it as me personally explaining what she said.

And hey, if you run into any problems, just know that I'm always here to lend a hand and assist you. 😉

Now, if you've downloaded the Chrome extension, you'll find it in your Chrome toolbar, on the right upper side.

I always keep mine pinned there for easy access.

Once you locate it, simply click on the Profitability Calculator.

The extension offers several other useful options, but for today, our focus will be on the Profitability Calculator.

As I mentioned earlier, calculating your costs and ensuring profitability is crucial in this business.

I've come across many new sellers who ordered products without considering the profitability aspect.

As a result, they ended up giving away products or even paying people to buy them.

That's definitely not a situation we want to find ourselves in…Right?

It's important to have healthy profit margins so that we can actually make money in this industry.

To make things easier for you, Helium 10 has developed this tool; it allows you to calculate or estimate your costs in near real-time.

Keep in mind that it won't give you an exact figure, but it will provide you with a solid idea of what you can expect.

You may need to conduct some research and add additional information, but overall, it's a user-friendly way to calculate your costs.

Let's start by looking at its different components.

Feature 1: Price

The first component is the Price.

When you find a product similar to what you want to sell, you can use the Profitability Calculator on their Amazon page.

I typically do this to get an idea of the market price.

You have the option to change the price to match your strategy.

For example, if you plan to bundle the product or offer additional features, you can adjust the price accordingly.

In the example shown above, let's say I want to charge $25 instead of the listed price of $15.99.

I personally prefer products with a price of at least $25 to ensure healthier profit margins.

Feature 2: Dimensions And Weight

Now let's talk about Dimensions.

Pay close attention to this because it's super important, especially if you're into FBA (Fulfillment by Amazon) shipping.

Dimensions play a big role here.

They determine which tier you'll be in and how much you'll be charged.

Basically, the weight and size of your product will determine the costs you'll incur.

So, make sure you know the actual dimensions of your product.

It's key to getting the right tier and avoiding any surprise expenses.

Let me show you an example in another tab.

You can access the FBA fulfillment fees page here.

Here, you can see how different size tiers come with different charges.

It's crucial to pay attention to this because exceeding the dimensions of a smaller tier can bump you up to a larger standard tier.

And guess what?

That can seriously affect your profitability.

Trust me, I've been there!

Once, the packaging of my product turned out to be slightly bigger than I expected.

That pushed me into a higher-cost tier, and let me tell you, it made a significant dent in my profits.

Take a look at the numbers.

For an 8 to 12-ounce small item, the shipping cost is just $3.58.

But in the larger tier for the same weight range, it shoots up to $4.24.

That's quite a difference, especially for lower-cost products.

So, here's a tip to make sure you end up in the size tier you want: Keep those dimensions in mind when you're creating your product.

It's all about paying attention to the details!

When you receive samples, take the time to inspect the packaging carefully.

That way, you can figure out the exact weight and size.

You can also use your competitor's product dimensions to get a starting point for estimation.

But once you have your actual samples in hand, you can enter the precise dimensions and weight into the calculator.

That way, you'll get the most accurate results possible!

Remember, nailing those dimensions is key to getting the best outcomes.

Feature 3: Understanding the Size Tiers

Take a look at the example I shared above!

In this example, the tier information is pre-filled based on the listing, but remember that it's editable.

That means you can make changes as needed to make sure you're in the perfect tier for your product.

So, here's the golden rule: Always double-check to ensure you're in the right tier.

Feature 4: Unit Manufacturing Costs

Alright, let's dive into Unit Manufacturing Costs!

Here's how I usually go about finding the perfect products to sell.

I head over to Alibaba, the treasure trove of possibilities, and search for the item I'm interested in.

Let's take the example of a garlic press.

Once you're there, check out the pricing range for similar garlic presses.

I spotted one option ranging from $2.59 to $3.59.

Now, here's my little secret: I like to play it safe and go for a slightly higher price.

It's better to be cautious than to choose the lowest price and hope for the best, right?

To get a rough estimate, you can take an average of the prices from different manufacturers.

That'll give you a good starting point.

But hey, here's where things get even better.

Once you start communicating with the manufacturers, you can input the exact estimate they provide into the calculator.

That way, you'll get super-accurate calculations tailored to your specific manufacturing costs.

In our case, let's assume a manufacturing cost of $3.20. That's the magic number we'll working with here!

Feature 5: Freight Costs

Now, let's talk about Freight Costs.

This information is like a golden ticket, and you usually get it from a freight forwarder.

The cost of freight depends on the shipping method you choose.

For example, if you opt for air shipping, it will be more expensive compared to shipping by sea.

It's all about finding the right balance between speed and cost.

Speaking of which, here's a little trick I often use. 

I opted for shipping an entire container.

It may sound fancy, but it actually saves me some bucks.

Typically, it costs around $3,000 for a whole container.

However, if you're shipping smaller quantities, don't worry!

You can calculate the cost per cubic meter or per kilogram to find the perfect fit for your needs.

Let's say we're focusing on the cost per kilogram.

As an example, I recently had a shipment from China to the United States using fast sea shipping.

The cost?

Drum roll, please... $2.2 per kilogram!

Isn't that great?

Here's the secret sauce: To determine the specific shipping rate for your requirements, make sure you reach out to your freight forwarder.

They'll give you all the juicy details and help you find the best shipping option.

Let's use the same price per kilogram in our example.

Feature 6: FBA Fee

Next, we have the FBA fee.

It's like a referral fee charged by Amazon for referring customers to your product.

Here's the scoop: Most sellers, just like you, will choose the "Most goods" category for their products.

It's like the go-to option that covers a wide range of stuff.

However, if you're selling apparel, batteries, or any other specific category with its own pricing structure, you'll need to select the appropriate category.

For our example, let's keep it simple and choose "Most goods."

Feature 7: Est. Time In Storage

Alright, let's dive into the world of "Estimated Time In Storage."

I have some valuable insights to share here.

So, previously, you could ship an entire container to Amazon, but those days are gone.

Now, there are limitations on how much inventory you can send in at once.

But fret not!

Many sellers have found a smart workaround.

They send their inventory to a third-party logistics warehouse.

This warehouse then takes care of sending it to Amazon in smaller increments.

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It's a clever way to navigate Amazon's new rules and optimize your storage strategy.

But how to avoid hefty Amazon storage fees?

Trust me, they can add up if you're not careful.

What I usually do is estimate how much inventory I can sell in a month.

That's my goal—to turn over everything within a month.

By doing so, I don't have to worry about those storage fees eating into my profits.

Pretty neat, right?

For this example too, we can assume a one-month turnover time.

However, if it takes you three months to go through your inventory, you can adjust your strategy accordingly.

Feature 8: Storage Fees

Oh, and must pay attention to the Storage Fees.

In this example, they're listed as $0.02 from January to September and $0.06 from October to December.

But here's the cool part: These fees are based on the estimated time your inventory will be stored.

If we were to input a 12-month time frame, the Storage Fees would adjust accordingly.

So, always keep an eye on those timeframes to get a clear picture of your costs.

As I mentioned earlier, it's advisable to have a faster inventory turnaround to avoid paying higher storage fees.

What you can do is keep some inventory at the supplier, some at the third-party warehouse, and some at Amazon.

This way, you can effectively manage your costs and keep everything running smoothly.

Now, here's an important heads-up for you: When it comes to the months of October, November, and December, fees tend to be a bit higher.

And guess what?

Amazon may also tighten the allowances for sending products in during this peak season. 

This can present a challenge during the peak season, but it's something to be aware of and plan for accordingly.

Feature 9: Referral Fee And Category

Moving on, it's time to choose the category your product falls under.

Each category comes with its own referral fee.

Since we're dealing with a garlic press here, the appropriate category would be "Kitchen."

So make sure you select the right category to ensure accurate calculations.

Feature 10: Duties And Tariffs

Regarding Duties and Tariffs, it's a little technical.

So, I usually consult with my freight forwarder to determine the percentage.

Being an expert in this area, he helps me figure out the nitty-gritty details.

Basically, there's a code called Harmonized System (HS) code that is used to classify items and determine the associated duties when importing into a specific country, such as the United States.

So make sure you know the HS code for your product.

It's like having the key to accurately determine the duties and tariffs.

Let's break it down with an example.

Imagine we purchased some garlic presses for $1,000 and the tariff for the particular HS code is 10%. 

That means we would need to pay an additional 10% of the inventory cost as a duty and tariff.

It's essential to have this information in hand and check it beforehand with your freight forwarder or manufacturer.

The percentage can vary, ranging from zero to higher percentages depending on the product.

Understanding and accounting for duties and tariffs is essential, as they can significantly impact your overall costs.

I had a personal experience with a bearing product that was mistakenly placed in the wrong tax category.

Unfortunately, we couldn't rectify the situation, and it ended up causing a loss for that shipment.

It's quite fascinating how something that incorrect categorization by customs can have such significant consequences.

I also heard a story where someone was selling their business based on a specific HS code, believing it carried a 10% tariff.

However, to their dismay, they later discovered that it was a mistake, and the actual tariff for that HS code was a whopping 20%.

As you can imagine, this unexpected revelation drastically lowered the value of their business.

Another example that caught my attention was while researching a product called a fire pit mat on Amazon.

It seemed like a promising item until I decided to check its associated HS code.

To my surprise, the HS code revealed a hefty tariff of 25%.

That discovery completely changed the outlook for selling that particular product.

These stories serve as important reminders of the significance of proper categorization and gaining a thorough understanding of the duties and tariffs involved.

It's essential to learn from these experiences and use that knowledge to navigate the complexities of international trade more effectively.

Feature 11: TACOS

Let's dig into another important aspect: TACOS, which stands for Total ACOS.

This includes your pay-per-click (PPC) advertising expenses.

It's crucial to factor this into your overall sales calculations.

Trust me, I've learned from past mistakes!

One mistake I made was underestimating the cost of PPC advertising for a specific product.

Tools like Helium 10 Cerebro and Helium 10 Magnet can give you suggested bids, but the actual costs become clear only when you dive into PPC advertising and see the real bidding prices.

I remember being surprised when I had to pay a few dollars per click for that product, and I hadn't accounted for it in my calculations.

So, my friend, don't make the same mistake I did!

Always consider the costs of PPC advertising and include them in your calculations.

While the expenses may not always be sky-high, it's a smart move to allocate around 10% of your sales for TACOS.

Understanding TACOS as the total cost of advertising is key to managing your profitability effectively.

Let's break it down with an example.

Suppose you aim to keep TACOS at 10% of your sales.

If your sales amount to $100,000, your TACOS would be $10,000 (10% of $100,000).

It's all about finding the right balance and keeping this number as low as possible to maximize your profitability.

After all, you don't want to overspend on advertising!

By considering TACOS and keeping a close eye on your return on investment per unit, you can make strategic decisions that boost your success.

Now, let's see how changing the product price can affect profitability.

In this example, I initially set the price at $25, even though the product costs only $3.20.

As a result, you'll notice a higher level of profitability.

However, let's go ahead and change it back to the original price of $15.99 to see how the numbers change.

As you can see, the profitability decreased significantly to $3.90.

This is why it's crucial to carefully analyze the margins and potential gains.

Remember, although we input a 10% TACOS figure, it could be higher in reality.

Many sellers aim for a TACOS between 15% to 20%, especially during the launch phase when advertising costs tend to be higher.

I personally prefer products with a higher cost and smaller size because they offer better margins.

However, these types of products can be more challenging to find since they provide greater profitability.

Keep this in mind as you evaluate different products.

Feature 12: Fulfillment By Merchant

Another way to calculate costs is through Fulfillment by Merchant or FBM.

With FBM, you take charge of fulfilling your own products.

Some sellers opt to ship their products directly to their garage and handle fulfillment themselves instead of sending them to Amazon.

Although it's easier to ship to your garage and then to Amazon, you can still use this calculator by entering the relevant information.

If you're working with a third-party logistics (3PL) center, you can reach out to them to obtain details about storage fees and fulfillment costs.

Once you have those figures, simply input them into the calculator to calculate your numbers accurately.

And hey, if you're fulfilling orders from your garage, there's a spot for that too! 

In the "Other Costs" section, you can include any additional expenses you incur while fulfilling orders from your garage.

For example, if you're purchasing labels and other materials, make sure to add those costs there.

It's all about capturing the full picture of your expenses.

It's important to note that you can enter costs in both percentage and dollar values.

And guess what?

If you input a negative value like -$10, it will deduct that amount from your overall profitability.

It's all about customizing the calculator to fit your specific needs.

Pro Tips For The Helium 10 Profitability Calculator

To wrap it all up, let's do a quick recap!

Don't forget to try out the Helium 10 Chrome extension.

It's absolutely free through my affiliate link. 😉

It will give you full access to the Profitability Calculator.

Whether you're exploring a new product idea or evaluating the profitability of your existing one, the Profitability Calculator is an absolute gem.

It gives you a solid estimate of the potential profits you can expect.

By the way, remember to verify the size information provided by Amazon and make sure it aligns with the dimensions given by your manufacturer.

As Carrie mentioned earlier, understanding the size tiers is key.

But guess what?

You can take it a step further and proactively find ways to optimize the size of your product, fitting it into a lower tier.

Let me tell you, this can make a world of difference!

I had a personal experience with my grill brush product.

By reducing its size by just a couple of inches, we were able to save around $1.5 per sale.

Trust me, those savings add up over time, giving you more financial flexibility to invest in other areas, such as PPC advertising.

So, size optimization is no joke.

Even small changes can have a significant impact on your profitability.

Also, just take a look at IKEA!

They're masters at ingeniously engineering their products to fold down and minimize packaging size, ultimately slashing their shipping costs.

It's a brilliant strategy that saves them a ton of money.

So, always keep the size of your product in mind.

It can either be your secret weapon for boosting profitability or an obstacle that hinders your success.

The choice is yours!

The Impact Of Inflation And Price Adjustments

With inflation on the rise, it's worth mentioning that sellers may need to reevaluate their prices.

You can use the calculator to experiment with different pricing scenarios and understand your wiggle room.

It's crucial to calculate the necessary adjustments to maintain profitability.

Many sellers are increasing their prices to counter rising fees and the challenges posed by inflation.

Finding the sweet spot where you remain competitive while still ensuring profitability is key.

By analyzing your costs and keeping an eye on your competitors, the calculator becomes your trusty sidekick in determining the appropriate price point for your products.

It provides ongoing support in making these crucial calculations and decisions.

Understanding ROI and Margin: What Numbers Should You Aim for?

Let's address another important aspect.

There's a question that often pops up when examining the numbers in the calculator.

New sellers might wonder, "What are good numbers for ROI and margin?"

Well, let me share my personal strategy.

When I'm on the hunt for products, before factoring in ad spend, marketing expenses, and other costs on Amazon, I typically aim for a robust 300% ROI (Return on Investment) and a healthy 40% margin.

That's the sweet spot I keep my eyes on.

However, it's important to note that once you consider all the expenses, those numbers tend to adjust.

In reality, I generally observe an ROI of around 100% and a margin of approximately 20%, after all the expenses when the year ends.

So, keep that in mind as you analyze the figures.

Now, let's play around and see what happens if we change the price back to $25.

Look at that!

We get an ROI of about 278 percent.

Here's a pro tip: In general, higher numbers are preferable.

For example, selling a $100 product with a $50 profit is similar to selling a cheaper product with the same effort and advertising costs.

Therefore, it's wise to aim for higher margins as they can yield greater profits and reduce stress.

However, I also know sellers who operate with slimmer margins but achieve high sales volumes.

Think about selling 1,500 units per day.

It all depends on your strategy and how you prefer to run your business.

There's no one-size-fits-all approach, my friend.

Now, let's talk about Manufacturing Costs for a moment.

Even a small adjustment can make a significant difference.

Take this example: If we decrease the cost from $3.20 to $3, you'll notice a slight change in the numbers. 

Every 20 cents counts, and even 1 cent counts!

That's why it's worth exploring ways to optimize costs without compromising quality.

Remember, higher ROI and faster inventory turnover work in your favor.

While a big ROI is fantastic, it's equally important to ensure you're generating consistent sales and recouping your investment quickly.

This way, you can reinvest in more products and fuel the growth of your business.

Conclusion: Continual Learning And Adaptation In The World Of Amazon Selling

As we come to the end of this Profitability Calculator review and tutorial, I want to emphasize that we're all on this learning journey together

I am constantly learning and evolving, just like all of you.

There's always more to learn, challenges to overcome, and opportunities to seize.

Before I proceed, I welcome you to grab the best Helium 10 discounts, and download the Helium 10 Chrome extension, so you can get to work soon.

Now, Let me share a personal experience with you.

I had a product initially priced at $2.50, but through my attendance at the Canton Fair and negotiation with manufacturers, I managed to secure it for just 90 cents.

Can you imagine the impact such negotiations can have on profitability?

It's significant!

Trade shows, whether in China or the United States, provide an incredible platform for securing better deals as manufacturers compete for your business.

Attending these shows and staying updated with the industry are essential for continuously driving down costs and maximizing profits.

Moreover, as entrepreneurs, we must be ready to adapt and navigate unforeseen circumstances.

Take the shipping container shortage, for example.

It led to exorbitant costs of $20,000 per container.

However, by adjusting our strategies and finding alternative solutions, we were able to mitigate the impact and keep our businesses running.

This is a valuable lesson: In the face of adversity, it's crucial to redirect our sails and find innovative ways to stay profitable.

I want to express my gratitude to Carrie Miller for her valuable insights and time during this discussion. 

I've already shared all the important links and offers with you.

Feel free to ask any questions or share your thoughts with me.

I'm here to answer your queries or you can seek Carrie's expertise to provide you with the information you need.

Together, let's continue learning and growing in the exciting and dynamic world of Amazon selling.

We're all in this together, and I'm thrilled to be part of your journey to success!

Until our paths cross again in another exciting post,

Best,

Vova and Carrie :)

P.S. - I welcome you to learn more about other Helium 10 tools in my detailed A to Z guide of Helium 10.