Estimate your net profit, margins, and ROI for FBA listings.
Amazon Referral Fee:
Total Amazon Fees:
Total Expenses:
Net Profit:
Profit Margin:
ROI (Return on Investment):
How to Calculate Amazon FBA Profits
Selling on Amazon via Fulfillment by Amazon (FBA) offers incredible scale, but the fee structure can be complex. To accurately determine your profitability, you must account for several critical metrics beyond just the cost of your product.
Understanding FBA Fees
Referral Fee: This is essentially Amazon's "commission." For most categories, this is 15% of the total selling price.
Fulfillment Fee: This covers picking, packing, and shipping your product to the customer. It is based on the weight and dimensions of your packaged item.
Monthly Storage Fee: Amazon charges for the space your inventory occupies in their fulfillment centers. These rates fluctuate, becoming significantly higher during the Q4 holiday season.
COGS (Cost of Goods Sold): The total cost to manufacture or purchase one unit of your product.
Shipping to Amazon: Also known as inbound shipping. This is the cost of getting your products from your warehouse or supplier into Amazon's network.
Real-World Example
Imagine you are selling a yoga mat for $40.00. Your costs are as follows:
COGS: $10.00
Shipping to Amazon: $2.00
FBA Fulfillment Fee: $7.50
Referral Fee (15%): $6.00
Storage Fee: $0.50
In this scenario, your total expenses are $26.00. Your Net Profit is $14.00. This results in a 35% Profit Margin and a 116% ROI ($14.00 profit / $12.00 investment).
Tips to Improve FBA Margins
To increase your bottom line, consider optimizing your packaging to drop into a smaller FBA size tier, reducing your fulfillment fees. Additionally, monitor your IPI (Inventory Performance Index) to avoid expensive long-term storage fees or overage charges.