Selling on Amazon Fulfillment by Amazon (FBA) involves more than just subtracting your product cost from your selling price. To get an accurate Net Profit figure, you must account for the multi-layered fee structure Amazon imposes on sellers.
The FBA Profit Formula: Net Profit = Selling Price – (COGS + Shipping to Amazon + Referral Fee + FBA Fulfillment Fee + Storage Fees + Advertising + Returns)
Key Input Definitions
Referral Fee: This is Amazon's "commission" for selling on their platform. For most categories, this is 15% of the total selling price.
FBA Fulfillment Fee: This covers the cost of picking, packing, and shipping your product to the customer. It is based on the weight and dimensions of your product.
COGS (Cost of Goods Sold): The total amount you paid the manufacturer to produce one unit of your item.
Monthly Storage: Amazon charges you based on the volume (cubic feet) your inventory occupies in their warehouse. This fee increases during Q4 (October – December).
Real-World Example Scenario
Imagine you are selling a "Premium Yoga Mat" for $35.00.
Product Cost: $8.00
Shipping to Warehouse: $1.50
Referral Fee (15%): $5.25
FBA Fee: $6.50
Storage Fee: $0.40
PPC Spend per Unit: $4.00
In this case, your total expenses are $25.65. Your Net Profit would be $9.35 per unit, with a Profit Margin of 26.7% and an ROI of 116.8%.
Tips for Improving Your Margins
If your calculator results show a low margin (below 20%), consider these strategies:
Optimize Packaging: Lowering the dimensions by just an inch can sometimes drop your product into a cheaper FBA tier.
Bulk Shipping: Use sea freight instead of air freight to reduce your per-unit shipping cost to Amazon warehouses.
Increase Price: Sometimes a $2 increase in price doesn't affect conversion rates but can significantly boost your net profit.
Negotiate with Suppliers: Once you have consistent sales volume, negotiate a 5-10% discount on manufacturing costs.
function calculateFBAProfit() {
var price = parseFloat(document.getElementById('sellingPrice').value) || 0;
var cost = parseFloat(document.getElementById('productCost').value) || 0;
var ship = parseFloat(document.getElementById('shippingToAmazon').value) || 0;
var refPerc = parseFloat(document.getElementById('referralFeePercent').value) || 0;
var fbaFee = parseFloat(document.getElementById('fbaFulfillmentFee').value) || 0;
var storage = parseFloat(document.getElementById('monthlyStorage').value) || 0;
var ppc = parseFloat(document.getElementById('ppcSpend').value) || 0;
var misc = parseFloat(document.getElementById('otherCosts').value) || 0;
if (price 0) ? (netProfit / cost) * 100 : 0;
// Display Results
document.getElementById('resTotalFees').innerHTML = "$" + totalAmazonFees.toFixed(2);
document.getElementById('resTotalUnitCost').innerHTML = "$" + totalUnitCost.toFixed(2);
var profitEl = document.getElementById('resNetProfit');
profitEl.innerHTML = "$" + netProfit.toFixed(2);
if (netProfit >= 0) {
profitEl.className = "result-value profit-positive";
} else {
profitEl.className = "result-value profit-negative";
}
document.getElementById('resMargin').innerHTML = margin.toFixed(2) + "%";
document.getElementById('resROI').innerHTML = roi.toFixed(2) + "%";
document.getElementById('fba-results').style.display = "block";
}