Amazon FBA Profit Calculator
How to Use the Amazon FBA Profit Calculator
Success on Amazon hinges on understanding your numbers. This calculator helps you determine your net take-home pay after Amazon takes its cut and you cover your manufacturing costs. To use it, simply enter your expected sale price, the cost to produce or buy the item (COGS), and the specific FBA fees associated with your product size and category.
Understanding FBA Fees
Referral Fees: This is essentially Amazon's commission for bringing you the customer. For most categories, this is 15% of the total sales price. However, some categories like electronics (8%) or apparel may vary.
Fulfillment Fees: This covers the cost of picking, packing, shipping, and providing customer service for your orders. This fee is based primarily on the weight and dimensions of your product's packaging.
Key Metrics for Sellers
When evaluating a potential product, pay close attention to these three metrics:
- Net Profit: The actual dollar amount you keep per unit sold.
- Profit Margin: Your profit divided by the sale price. A healthy FBA margin is typically between 20% and 30%.
- ROI: This measures the efficiency of your capital. If you spend $10 to make $5 in profit, your ROI is 50%. This is crucial for managing cash flow and scaling your inventory.
Real-World Example
Imagine you are selling a yoga mat for $35.00. Your cost to buy it from the factory is $10.00, and it costs $2.00 to ship it to an Amazon warehouse. Amazon's referral fee is 15% ($5.25) and the FBA fulfillment fee for a large standard item is $6.00.
Your total expenses would be $10 + $2 + $5.25 + $6 = $23.25. Your net profit would be $35.00 – $23.25 = $11.75, resulting in a 33.5% profit margin and a 98% ROI.