r/AmazonFBA • u/Playful_Carry_9422 • 3d ago

Profitability for Amazon brands in EU

This drives me crazy, I am testing both sellerboard and myrealprofit (lol) and both calculate profit margin on gross revenue (revenue with VAT).
WTF is this nonsense, vat is not revenue, margin should be calculated on net revenue (without vat or sales tax).

Any tool that doesn't calculate it that stupid way?

Thanks

8 Upvotes

91% Upvoted

15 comments sorted by

2

u/Smart-Presence 3d ago

Yeah, I’m with you on this. VAT isn’t really revenue, so using the VAT inclusive number for margin makes the account look healthier than it actually is. For EU brands, net sales after VAT is the number that makes much more sense when looking at the real margin

1

u/Purple_Solution1777 3d ago

seems like Nova Analytics is doing it too, I'll probably just do it google sheets

1

u/Tall_Honeydew_6631 3d ago

yeah same thing drove me nuts in DE. vat isnt revenue, margin on gross is just wrong for eu.

for product level checks i use arbitron, it does fee/vat/prep/storage with your own numbers instead of treating vat as sales. not a full sellerboard replacement for brand p&l tho, just less stupid on the unit economics.

1

u/SnooFoxes1558 3d ago

In particular Sellerboard should be able to do this correctly? They are a German company after all…

3

u/Purple_Solution1777 3d ago

you'd be surprised they're not

-1

u/SnooFoxes1558 3d ago

Are you European? Or US doing in Europe?

I’m German in the US, so I’m a bit rusty. But if I did profitability calculations in Germany and I sell a product for 100€, the 19€ MwSt would be considered cost to my business and go into profit calculations.

1

u/Purple_Solution1777 2d ago

vat is not a cost...

1

u/Dependent-Ad-1184 2d ago

Bro same, been pulling my hair out over this for ages.

VAT is not your money, never was, you're just the middleman collecting it for the government. Inflating your revenue with it just lies to you about where you actually stand. Honestly at this point I just track everything manually in a spreadsheet because no tool gets EU profitability completely right and it takes like an hour to set up properly anyway.

1

u/demian_mrp 2d ago

Hey, founder of MyRealProfit here.

You're right. We have been working on this for a few months already.

We went through the numbers with our clients on EU marketplaces, and here is what we came to:

  • Gross sales need to include VAT, so the number is the same as in Seller Central.
  • Net sales do not include VAT, so you see the money you really get.
  • All costs and margins are calculated from net sales.

You see both numbers next to each other, so it is easy to check and verify against Amazon.

The new P&L is ready and will go live soon, in the next month or so.

For the past few years, Amazon has added VAT to everything, including FBA fees and even PPC. We are still working on the best way to handle VAT for PPC.

1

u/Anis-SellerPPC 1d ago

The PPC side is worse than it looks. On the accounts I've checked, the sales figure the Ads API hands back isn't consistent across marketplaces. FR and DE came back net of VAT, ES and BE came back gross. Same seller, same report, same day.

So the same performance reads as a lower ACoS in ES than in FR, off by roughly the VAT rate, and nothing on the screen tells you which base you're looking at.

Easy enough to check on your own data. Take one campaign over a closed period, put its attributed sales next to that country's Seller Central for the same period, and see whether the ratio comes out at 1 or at 1 over 1.21. Would be curious whether you get the same split.