Estimate your net profit, margins, and ROI for Amazon FBA products.
Total Amazon Fees:
Total Expenses:
Net Profit:
Net Margin (%):
ROI (%):
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 remains sustainable, you must account for every penny that leaves your account.
The Core Components of FBA Math
Cost of Goods Sold (COGS): This is the manufacturing or wholesale price you pay per unit.
Referral Fees: This is Amazon's commission for selling on their platform. For most categories, this is 15% of the total sales price.
Fulfillment Fees: These fees cover picking, packing, shipping, and customer service provided by Amazon. They are based on the weight and dimensions of your product.
Landed Costs: This includes the shipping from your supplier to Amazon's fulfillment centers, customs duties, and inspection fees.
FBA Profit Example
Imagine you sell a yoga mat for $40.00. Your costs are as follows:
Product Cost: $10.00
Shipping to Amazon: $2.00
Referral Fee (15% of $40): $6.00
Fulfillment Fee: $7.50
PPC/Advertising: $4.00
Total Expenses: $29.50. Net Profit: $10.50. Margin: 26.25%. ROI: 105% (based on product cost).
Tips to Improve Your Margins
To increase your profitability, consider optimizing your packaging to reduce the FBA fulfillment tier (weight/size), negotiating better rates with suppliers, or improving your organic ranking to reduce reliance on expensive PPC advertising.