If there's an opportunity to cut costs and you haven't acted on it yet, you're losing margin and profit. That's what we call Profit Drain.
For example, if your product could fit in a smaller box, switching could move it into a lower Amazon size tier—reducing your FBA fees by, say, 52%. Plus, with an optimized box size, you could fit more boxes per pallet, cutting your logistics costs. Until you make the change, those potential savings are your Profit Drain.
By the way, we offer a Box Optimizer tool.
With it, you can instantly calculate the best box size for each market to see if you're losing profit due to inefficient packaging.
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If your costs go up because you missed something important, that's also Profit Drain — you're losing margin and profit.
For instance, imagine Amazon reimbursed you $10,000 for lost units. A month later, they say the units were found and take $10,000 back from your account. But in reality, Amazon's system made a mistake and counted your latest inbound shipment as "found inventory." If you don't catch this, that $10,000 is your Profit Drain.
With Propamp.ai, you instantly see if a Reversal Reimbursement occurred so you can quickly address it if Amazon made a mistake and save your money.
If your ad manager only tells you in the last month of the quarter that you've only hit 10% of your unit sales target, and you have to suddenly ramp up your ad budget to catch up, you're losing margin and profit. That's Profit Drain.
For example, say your Q1 plan was to sell 330 units over three months at a 40% margin.
But after two months, at the start of March, you realize you've only sold 40 units so far-just 10% of your goal. To make up for lost time, you dump an extra $9,000 into ads, way above your original plan, which cuts into your margin-and you still don't hit your quarterly sales target.
When you suddenly ramp up ad spend to make up lost ground, Amazon's algorithms show your ads more often, but not always to the most relevant shoppers. This drives up your cost-per-click and usually means you'll pay more per sale than if you'd spread your budget evenly throughout the quarter.
If you'd tracked sales closely from the start of January, you could have adjusted your ad spend earlier, spent less, and hit your goal. The extra ad costs and lost profit from missing your sales target? That's your Profit Drain.
Our Profit Drain Audit Cheat Sheet—full of actionable tips for spotting hidden profit drains.
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CEO and Founder, PROPAMPAI AI
Owner, PropVue Store
7-figure Amazon FBA seller
"I started selling on Amazon in 2018 and rapidly scaled to seven figures — thanks in large part to accurate data and tailored reports:
I use accurate P&L and balance sheet reports to negotiate better rates with lenders.
Detailed expense and purchase history also help me secure improved supplier terms, like flexible payment schedules or trade credit.
Inventory reports let me pinpoint reorder timing to avoid stockouts, so I can often cover payments without loans by reallocating ad spend (or upcoming tax tax funds in certain markets).
Real-time unit economics calculations let me closely analyze costs —whether it's new Amazon fees, or shipping expenses — identify the biggest cost drivers, and then find ways to optimize them.
For example, thanks to unit economics calculations, we replaced bulky foam with bubble wrap and reduced shipping costs by over $3 per unit
Spreadsheets hit their limits fast, and most seller tools either lacked accurate data or didn't offer the reports I needed. That's why I built my own automated analytics platform, PROPAMP AI.
Now, on the platform, any seller can access the same reports I rely on daily.
As a bonus, we've prepared a free guide highlighting how to use the reports and tools for cutting your costs and boosting profits—the Profit Drain Audit Cheat Sheet.
You will get access to this Cheat Sheet for free after starting your free trial"
