Selling on Amazon FBA (Fulfillment by Amazon) offers incredible scale, but the fee structure can be complex. To ensure your private label or wholesale business is sustainable, you must understand the difference between your gross revenue and your net take-home pay.
The Core Components of FBA Fees
Referral Fee: This is Amazon's commission for selling on their platform. For most categories, this is 15% of the total selling price.
Fulfillment Fee: This covers picking, packing, and shipping your product to the customer. It is based on the weight and dimensions of your product.
Monthly Storage Fees: Amazon charges you for the space your inventory occupies in their fulfillment centers. These fees increase during the Q4 holiday season.
Cost of Goods Sold (COGS): This is your base manufacturing cost plus any inspection or packaging costs.
Real-World Example Calculation
Imagine you are selling a "Yoga Mat" with the following data:
Expense Category
Value
Selling Price
$35.00
Product Cost + Shipping
$10.00
Amazon Referral Fee (15%)
$5.25
FBA Fulfillment Fee
$6.50
Storage & Misc
$1.25
Total Profit
$12.00
Optimizing Your Profit Margins
A healthy Amazon FBA profit margin is typically between 15% and 25%. If your margin falls below 10%, you are at high risk of losing money if advertising costs (PPC) spike or if return rates increase. To improve your margins, consider optimizing your packaging to drop into a lower FBA size tier or negotiating better rates with your manufacturer.
function calculateFBAProfit() {
var price = parseFloat(document.getElementById('sellingPrice').value) || 0;
var cost = parseFloat(document.getElementById('productCost').value) || 0;
var shipToAmz = parseFloat(document.getElementById('shippingToAmazon').value) || 0;
var refPct = parseFloat(document.getElementById('referralFee').value) || 0;
var fbaFee = parseFloat(document.getElementById('fbaFulfillment').value) || 0;
var storage = parseFloat(document.getElementById('storageFee').value) || 0;
var ppc = parseFloat(document.getElementById('ppcSpend').value) || 0;
var misc = parseFloat(document.getElementById('miscCosts').value) || 0;
if (price === 0) {
alert("Please enter a selling price.");
return;
}
// Calculations
var referralFeeAmount = price * (refPct / 100);
var totalAmazonFees = referralFeeAmount + fbaFee + storage;
var otherCosts = cost + shipToAmz + ppc + misc;
var totalCosts = totalAmazonFees + otherCosts;
var netProfit = price – totalCosts;
var margin = (netProfit / price) * 100;
var roi = (cost > 0) ? (netProfit / cost) * 100 : 0;
// Display Results
document.getElementById('resRevenue').innerText = "$" + price.toFixed(2);
document.getElementById('resAmazonFees').innerText = "$" + totalAmazonFees.toFixed(2);
document.getElementById('resOtherCosts').innerText = "$" + otherCosts.toFixed(2);
var profitEl = document.getElementById('resNetProfit');
profitEl.innerText = "$" + netProfit.toFixed(2);
profitEl.className = "fba-result-value " + (netProfit >= 0 ? "fba-profit-positive" : "fba-profit-negative");
document.getElementById('resMargin').innerText = margin.toFixed(2) + "%";
document.getElementById('resROI').innerText = roi.toFixed(2) + "%";
document.getElementById('fbaResults').style.display = 'block';
}