Amazon FBA Profit & Margin Calculator
Net Profit
$0.00
Profit Margin
0%
ROI
0%
Total Fees: $0.00
Break-even Price: $0.00
Understanding Your Amazon FBA Profit Margins
Selling on Amazon via Fulfillment by Amazon (FBA) offers massive scale, but the fee structure can be complex. To remain profitable, sellers must account for every cent that leaves their pocket, from the manufacturing floor to the customer's doorstep.
Key Components of the FBA Calculation
- Cost of Goods Sold (COGS): The total cost to produce or purchase the product from your supplier.
- Amazon Referral Fee: Essentially a commission for selling on the platform. This is usually 15% for most categories, though it varies.
- FBA Fulfillment Fees: The cost for Amazon to pick, pack, and ship your item. This depends heavily on the weight and dimensions of the product.
- Shipping to Amazon: The inbound freight cost to get your inventory to an Amazon fulfillment center.
- Storage Fees: Monthly costs based on the volume (cubic feet) your inventory occupies in the warehouse.
Example Calculation: Kitchen Gadget
Imagine you sell a kitchen gadget for $25.00. Your costs are as follows:
- COGS: $6.00
- Referral Fee (15%): $3.75
- FBA Fee: $4.50
- Inbound Shipping: $0.50
- Monthly Storage: $0.15
Total Expenses: $14.90
Net Profit: $10.10
Profit Margin: 40.4%
ROI: 168.3%
How to Improve Your FBA Margins
If your margins are slim (below 20%), consider these strategies:
- Reduce Package Size: FBA fees are tiered by dimension. Shrinking your packaging by just half an inch can sometimes save you $1.00+ per unit.
- Negotiate COGS: As your volume increases, renegotiate with your manufacturer.
- Optimize Inbound Logistics: Use Amazon's Partnered Carrier program for better shipping rates to warehouses.
- Bundling: Sell 2 or 3 items together. You pay one referral fee and one fulfillment fee for the bundle, rather than multiple fees for individual sales.