Amazon FBA Profit Calculator
Understanding Your Amazon FBA Profitability
Success on Amazon hinges on accurate math. While Fulfillment by Amazon (FBA) offers incredible logistics reach, it comes with a complex fee structure that can quickly erode margins if not calculated correctly.
Key Components of the FBA Calculation
- Referral Fees: This is Amazon's commission for selling on their platform. For most categories, this is 15% of the total sales price.
- Fulfillment Fees: This covers picking, packing, and shipping your product to the customer. It is based on the weight and dimensions of your product.
- Storage Fees: Monthly costs for housing your inventory in Amazon warehouses. These fees often spike during Q4 (October – December).
- COGS (Cost of Goods Sold): The total cost to manufacture or purchase your product from a supplier.
A Realistic Example
Let's say you sell a yoga mat for $45.00:
- • Product Cost: $12.00
- • Shipping to Amazon: $1.50
- • Referral Fee (15%): $6.75
- • FBA Fulfillment Fee: $7.20
- • Monthly Storage: $0.60
Total Expenses: $28.05
Net Profit: $16.95
Profit Margin: 37.6%
ROI: 141.25%
Why ROI and Margin Both Matter
While Net Profit tells you how much money you keep in your pocket, Profit Margin tells you how much "buffer" you have against price wars or advertising spikes. ROI (Return on Investment) is crucial for cash flow management; it shows how hard your capital is working for you. A healthy FBA business typically aims for at least a 20-30% profit margin and 100%+ ROI to account for advertising (PPC) costs and unexpected returns.