Tax Equivalent Yield Calculator

function calculateFBAProfit() { var salePrice = parseFloat(document.getElementById('salePrice').value) || 0; var cogs = parseFloat(document.getElementById('cogs').value) || 0; var shipToAmz = parseFloat(document.getElementById('shippingToAmazon').value) || 0; var refRate = parseFloat(document.getElementById('referralFee').value) || 0; var fulfillFee = parseFloat(document.getElementById('fulfillmentFee').value) || 0; var storageFee = parseFloat(document.getElementById('monthlyStorage').value) || 0; var ppc = parseFloat(document.getElementById('ppcSpend').value) || 0; var referralCharge = salePrice * (refRate / 100); var totalExpenses = cogs + shipToAmz + referralCharge + fulfillFee + storageFee + ppc; var netProfit = salePrice – totalExpenses; var margin = (salePrice > 0) ? (netProfit / salePrice) * 100 : 0; var roi = (cogs > 0) ? (netProfit / (cogs + shipToAmz)) * 100 : 0; document.getElementById('resRevenue').innerHTML = '$' + salePrice.toFixed(2); document.getElementById('resExpenses').innerHTML = '$' + totalExpenses.toFixed(2); var profitEl = document.getElementById('resNetProfit'); profitEl.innerHTML = '$' + netProfit.toFixed(2); if(netProfit >= 0) { profitEl.style.color = '#2e7d32'; } else { profitEl.style.color = '#d32f2f'; } document.getElementById('resMargin').innerHTML = margin.toFixed(2) + '%'; document.getElementById('resROI').innerHTML = roi.toFixed(2) + '%'; }

How to Calculate Amazon FBA Profit Margins

Selling on Amazon via Fulfillment by Amazon (FBA) is an excellent way to scale an e-commerce business, but the fee structure can be complex. Understanding your actual take-home pay requires more than just subtracting your product cost from the sale price.

The Formula:
Net Profit = Sale Price – (COGS + Shipping to Amazon + Referral Fee + FBA Fulfillment Fee + Storage Fees + Marketing/PPC)

1. Cost of Goods Sold (COGS)

This is the manufacturing cost per unit. It should include the unit price from your supplier plus any inspections or private labeling costs. Always track this accurately to ensure your ROI (Return on Investment) calculations are realistic.

2. Amazon Referral Fees

Amazon charges a commission for every item sold on their platform. For most categories, this is 15%. Some categories like electronics (8%) or apparel (which varies by price point) have different rates. Our calculator defaults to 15%, but you can adjust this based on your specific niche.

3. FBA Fulfillment Fees

These are the fees Amazon charges to pick, pack, and ship your product. These are determined by the weight and dimensions of your product. Small, light items (under 1 lb) usually range from $3.22 to $3.80, while large bulky items can cost significantly more.

4. Monthly Storage Fees

Amazon charges for the space your inventory occupies in their warehouses. These fees change seasonally, typically increasing significantly during Q4 (October – December). It's vital to maintain a high inventory turnover to avoid long-term storage fees.

Example Profit Calculation

Let's look at a realistic example for a standard private label product:

• Sale Price: $25.00
• COGS: $5.00
• Shipping to Amazon: $1.00
• Referral Fee (15%): $3.75
• Fulfillment Fee: $5.40
• Storage Fee: $0.20
• PPC (Advertising): $2.50

Total Expenses: $17.85
Net Profit: $7.15
Profit Margin: 28.6%

Pro Tip: The "Rule of Thirds"

Many successful Amazon sellers follow the "Rule of Thirds" when scouting new products. One-third goes to the product and shipping costs, one-third goes to Amazon fees, and one-third is kept as profit. If your profit margin is below 20% after PPC costs, you may need to reconsider your pricing strategy or find ways to lower your manufacturing costs.