Cross-border e-commerce sellers, do you know why some seemingly full of orders of the store eventually still closed? The reason is that they don't understand and calculate gross profit correctly! This article will use the most straightforward way to help you unlock the secrets of the income statement.
If you want to run a company, a store or an e-commerce business for a long time, it's important to be able to "sustainably make a profit". However, how do you judge profitability? Why do some businesses lose money even though their sales results seem to be very impressive?
Start with the income statement, which is one of the four major financial statements that record the company's operating data over a specific period of time. By comparing the profit and loss statements of different periods, you can clearly observe the changes in the company's revenue, and then evaluate the effectiveness of the previous operating strategies.
For example, during the Greek economic crisis, many companies with apparently high turnover eventually closed down because they ignored key indicators on their profit and loss statements. For Taiwanese manufacturers and cross-border brands, the following six indicators are particularly important:
- Operating Costs: Directly incurred costs, such as raw materials, packaging materials, etc.
- Operating expenses: indirect costs such as personnel, rent, advertising, etc.
- Operating revenue: Revenue from the sale of goods or services.
- Gross profit: Operating revenue less operating costs
- Operating Profit: Gross Profit less Operating Expenses
- Net Income After Tax: Operating Income After Tax True Revenue
The real way to help you realize cost reduction and efficiency is to master the formula for calculating gross profit: (operating income - operating costs)/operating income x 100%. The higher this ratio is, the better the profit-making mechanism of the enterprise is.
For Amazon sellers, the cost of doing business mainly consists of four major items: store opening costs, sales commissions, logistics costs and operating costs. Take the North American website as an example, the professional sales program is fixed at $39.99 per month, the sales commission is about 8-15% according to the product category, and the logistics fee is calculated according to the product size, weight and storage time.
You can even utilize the FBA online trial calculation tool provided by Amazon to accurately estimate various costs. In addition, you can make good use of Amazon's advertising program and the "average daily budget" function to effectively control marketing expenses and increase the return on investment.
With hundreds of millions of users, Amazon has opened 14 overseas sites and over 400 operation centers in Taiwan, and provides free operation tools, tax calculations and official logistics services to help you operate your business properly and grow your gross profit steadily.
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# Cross-border E-commerce # Operating Gross Profit # Amazon Global Store # Profit and Loss Statement Analysis # Taiwan Sellers # E-commerce Profit # Financial Management # 2025 Financial Planning # Cross-border Exporters # Global Store #
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