Amazon FBA Profit Calculator
Calculate your net margins, ROI, and Amazon fees accurately.
Understanding Amazon FBA Profitability
Selling on Amazon via Fulfillment by Amazon (FBA) is a powerful way to scale an e-commerce business, but the fee structure can be complex. To ensure your business is sustainable, you must look beyond the top-line revenue and calculate your actual net profit after all Amazon-related expenses.
The Core Components of FBA Costs
- Cost of Goods Sold (COGS): The manufacturing or wholesale cost of your product.
- Referral Fees: This is Amazon's commission for selling on their platform. For most categories, this is approximately 15% of the total selling price.
- Fulfillment Fees: These are the costs for Amazon to pick, pack, and ship your product to the customer. This depends on the size and weight of your item.
- Storage Fees: Amazon charges monthly fees based on the volume of space your inventory occupies in their warehouses.
- Inbound Shipping: The cost to ship your products from your warehouse or supplier to an Amazon Fulfillment Center.
Example Calculation
Suppose you sell a kitchen gadget for $30.00. Your manufacturing cost is $7.00, and it costs $1.00 to ship to Amazon. The referral fee (15%) is $4.50, and the FBA fulfillment fee is $5.00. Monthly storage is $0.20.
Total Expenses: $7.00 (COGS) + $1.00 (Inbound) + $4.50 (Referral) + $5.00 (FBA) + $0.20 (Storage) = $17.70
Net Profit: $30.00 – $17.70 = $12.30
ROI: ($12.30 / $7.00) * 100 = 175.7%
Tips for Increasing FBA Margins
To improve your bottom line, consider optimizing your packaging to move into a smaller size tier, which reduces fulfillment fees. Additionally, monitoring your Inventory Performance Index (IPI) can help you avoid high storage fees, especially during peak seasons like Q4.