Amazon FBA Profit Calculator
How to Calculate Your Amazon FBA Profit
Selling on Amazon via Fulfillment by Amazon (FBA) offers massive scale, but the fee structure can be complex. To ensure your private label or wholesale business is sustainable, you must account for every cent that leaves your pocket before the payout hits your bank account.
Understanding the Key Components
- Selling Price: The list price customers see on your Amazon product detail page.
- COGS (Cost of Goods Sold): The raw manufacturing cost of your product per unit.
- Referral Fees: This is Amazon's commission for selling on their platform. For most categories, this is 15%, but it can range from 8% to 45% depending on the niche.
- FBA Fulfillment Fees: This covers picking, packing, and shipping your orders to customers. This varies based on product weight and dimensions.
- Storage Fees: Amazon charges for the space your inventory occupies in their fulfillment centers, which increases during the Q4 holiday season.
Example Calculation
Imagine you are selling a yoga mat for $40.00. Your manufacturing cost is $10.00, and it costs $2.00 to ship it from the factory to Amazon's warehouse. Amazon takes a 15% referral fee ($6.00) and charges a $7.00 FBA fulfillment fee. If storage costs $0.50 per unit, your calculation looks like this:
$40.00 (Price) – $10.00 (COGS) – $2.00 (Shipping) – $6.00 (Referral) – $7.00 (FBA Fee) – $0.50 (Storage) = $14.50 Net Profit.
Your profit margin in this scenario would be 36.25%, which is considered healthy in the e-commerce space.
Strategies to Improve Your Margin
If your results show a slim margin, consider optimizing your packaging to reduce dimensions (lowering FBA fees) or negotiating bulk discounts with your supplier to lower your COGS. Successful sellers typically aim for a "Rule of Three": 1/3 for COGS, 1/3 for Amazon Fees, and 1/3 for Profit.