Amazon FBA Profit Calculator
Calculate your net profit, ROI, and margins for Fulfillment by Amazon
Understanding Amazon FBA Profitability
Selling on Amazon via the Fulfillment by Amazon (FBA) program offers incredible scale, but the fee structure can be complex. To succeed as an Amazon seller, you must look beyond the "Selling Price" and account for every penny that Amazon deducts from your disbursement.
The Key Components of FBA Math
- Cost of Goods Sold (COGS): This is what you pay the manufacturer for the product. It is the baseline for your ROI calculation.
- Amazon Referral Fee: This is essentially a commission. For most categories, Amazon takes 15% of the total selling price.
- Fulfillment Fee: This covers picking, packing, and shipping your product to the customer. It depends heavily on the weight and dimensions of your item.
- Storage Fees: Amazon charges you per cubic foot for holding inventory. These fees increase significantly during Q4 (October through December).
Example Calculation: Selling a Yoga Mat
Imagine you are selling a yoga mat for $35.00. Your costs are as follows:
- Product Cost: $10.00
- Shipping to Amazon: $1.00
- Referral Fee (15%): $5.25
- Fulfillment Fee: $7.50
- Monthly Storage: $0.25
In this scenario, your total costs are $24.00. Your Net Profit is $11.00. Your Profit Margin would be 31.4%, and your ROI would be 110% (since you spent $10 to make $11 profit).
Why ROI and Margin Matter
Net Profit Margin tells you how healthy your business is. A margin of 20% or higher is generally considered good for FBA. ROI (Return on Investment) tells you how hard your money is working. If you have $1,000 to spend on inventory, you want to put it into the product that returns the highest ROI in the shortest amount of time.
Tips to Increase Your FBA Profit
1. Optimize Packaging: If your product is close to a size tier boundary, reducing the packaging by even half an inch can save you dollars per unit in fulfillment fees.
2. Negotiate COGS: As your volume grows, negotiate better pricing with your supplier to lower your base costs.
3. Manage Inventory Health: Avoid "Long-Term Storage Fees" by only sending in 60-90 days worth of inventory at a time.