Amazon FBA Profit Calculator
Calculation Results
Understanding Amazon FBA Profitability
Success on Amazon hinges on accurate math. While many sellers focus on gross revenue, the "Fulfillment by Amazon" (FBA) model involves various layers of fees that can quickly erode margins if not accounted for during the product sourcing phase.
Key Components of the FBA Calculation
- Selling Price: The final list price visible to the customer.
- Product Cost (COGS): The total cost to manufacture or purchase one unit of your product.
- Amazon Referral Fee: Essentially a commission for selling on their platform. Most categories charge 15%, but some vary from 8% to 45%.
- FBA Fulfillment Fee: The per-unit fee charged to pick, pack, ship, and provide customer service for your items. This is determined by the size and weight of the package.
- Shipping to Amazon: The cost of transporting your goods from your supplier or warehouse to an Amazon Fulfillment Center (often via Amazon's partnered carrier program).
Example Calculation
Imagine you sell a yoga mat for $40.00. Your manufacturing cost is $10.00 and it costs $2.00 to ship it to Amazon. If the referral fee is 15% ($6.00) and the FBA fulfillment fee is $8.00, your total costs are $26.00. Your net profit would be $14.00 per unit, resulting in a 35% margin and a 140% ROI.
Why Net Margin Matters
A healthy Amazon FBA business usually aims for a net margin of 20% or higher. This provides a buffer for PPC (Pay-Per-Click) advertising costs, returns, and seasonal fluctuations. If your margin is below 10%, you may find it difficult to scale or maintain profitability after marketing expenses.