Amazon FBA Profit Calculator
Mastering Your Amazon FBA Margins
Selling on Amazon via Fulfillment by Amazon (FBA) is an excellent way to scale an e-commerce business, but hidden fees can quickly erode your bottom line. To build a sustainable brand, you must understand the difference between gross revenue and net profit.
Key Components of FBA Calculations
Our Amazon FBA Profit Calculator takes into account the seven most critical financial metrics for sellers:
- Selling Price: The final price the customer pays for your product.
- Cost of Goods Sold (COGS): The manufacturing cost or wholesale purchase price per unit.
- Referral Fee: Amazon's "commission," typically 15% for most categories.
- Fulfillment Fees: The cost for Amazon to pick, pack, and ship your item to the customer.
- Inbound Shipping: The cost to transport your inventory from your supplier or warehouse to Amazon's fulfillment centers.
- Storage Fees: Monthly costs based on the volume (cubic feet) your inventory occupies in the warehouse.
Example Calculation
Imagine you are selling a yoga mat for $40.00. Your manufacturing cost is $10.00. Amazon takes a 15% referral fee ($6.00) and charges a $7.50 fulfillment fee. Shipping to Amazon costs you $1.00 per unit, and you spend $3.00 on PPC advertising per sale.
In this scenario, your total expenses are $27.50. Your Net Profit is $12.50, resulting in a 31.25% profit margin and a 125% ROI.
Strategies to Improve FBA Profitability
To increase your margins, focus on three areas: optimizing product packaging to reduce FBA size tiers, negotiating better rates with suppliers for high-volume orders, and refining your Amazon PPC campaigns to lower your ACoS (Advertising Cost of Sale).