Amazon FBA Profit Calculator
Revenue & COGS
Amazon Fees & Marketing
Understanding Amazon FBA Profitability
Selling on Amazon through the Fulfillment by Amazon (FBA) program is a popular way to scale an e-commerce business. However, many sellers fail to account for the "hidden" costs that eat into margins. This calculator helps you determine your true net profit after all expenses.
Key Components of the FBA Calculation
- COGS (Cost of Goods Sold): The raw cost to manufacture or purchase one unit of your product.
- Referral Fees: Amazon's "commission" for selling on their platform, typically 15% for most categories.
- Fulfillment Fees: These cover picking, packing, and shipping your product to the customer. They vary based on size and weight.
- PPC/Ad Spend: Marketing is essential on Amazon. This field accounts for the average cost of advertising attributed to a single sale.
Realistic Example: The Yoga Mat Scenario
Imagine you are selling a premium yoga mat for $35.00. Your manufacturing cost is $10.00 and it costs $2.00 to ship it to Amazon's warehouse. Amazon takes a 15% referral fee ($5.25) and charges an FBA fulfillment fee of $6.50 due to the size. If you spend $4.00 on PPC ads per unit sold:
- Total Expenses: $10.00 + $2.00 + $5.25 + $6.50 + $4.00 = $27.75
- Net Profit: $35.00 – $27.75 = $7.25
- Profit Margin: ($7.25 / $35.00) = 20.7%
- ROI (Return on Investment): ($7.25 / $10.00) = 72.5%
Tips to Improve Your Margins
To maximize your Amazon FBA profit, consider optimizing your packaging to move into a smaller size tier, which can significantly reduce fulfillment fees. Additionally, sourcing higher volumes can lower your per-unit product cost and inbound shipping rates.