Amazon FBA Profit & Margin Calculator
How to Use the Amazon FBA Profit Calculator
Calculating your potential Amazon FBA (Fulfillment by Amazon) profit is the most critical step before sourcing any product. This calculator helps you break down the complex fee structure used by Amazon to ensure your private label or wholesale business remains sustainable.
Understanding the Core Components
- Selling Price: The final price the customer pays on Amazon.com.
- Product Cost (COGS): The manufacturing cost per unit plus any inspection or prep fees.
- Referral Fee: Usually 15% for most categories, this is Amazon's commission for bringing you the customer.
- Fulfillment Fee: The cost Amazon charges to pick, pack, and ship your product. This is based on size and weight.
- Shipping to Amazon: The freight cost (ocean or air) divided by the number of units in your shipment.
Example Calculation
Imagine you are selling a yoga mat for $35.00. Your manufacturing cost is $10.00, and it costs $2.00 per unit to ship to an Amazon warehouse. If the FBA fulfillment fee is $6.50 and the referral fee is 15% ($5.25), your total expenses before advertising are $23.75. This leaves you with a net profit of $11.25 per unit, or a 32% profit margin.
Why Profit Margin and ROI Matter
While Net Profit tells you how much cash you keep, Profit Margin tells you how "safe" your product is from price wars. A margin of 25% or higher is generally considered healthy for FBA. ROI (Return on Investment) tells you how hard your money is working; if you spend $10 to make $10 profit, your ROI is 100%.