Calculating true FBA profit requires understanding all Amazon fees and costs. Many sellers lose money because they don't account for every expense.
Amazon FBA Fee Breakdown
| Fee Type | Typical Range | Notes |
|---|---|---|
| Referral fee | 8-15% | Category dependent |
| FBA fulfillment | $3-8+ | Size/weight dependent |
| Storage fees | $0.75-2.40/cf | Monthly, higher Q4 |
| Return processing | Varies | Category dependent |
Profit Calculation Formula
FBA Profit Formula
Profit = Sale Price - Product Cost - Amazon Fees - Shipping to FBA - Advertising - Returns
Realistic Margin Targets
- Target 30%+ gross margin before ads
- Net margin of 15-25% is healthy
- Account for 10-20% advertising spend
- Factor in returns (2-5% typical)
Track Your Actual Profits
Use Amazon analytics tools to track real margins, not estimated ones.
Key Takeaways
- Account for all Amazon fees in calculations
- Target 30%+ gross margin before advertising
- Returns and long-term storage eat into profits
- Track actual margins, not projections
Frequently Asked Questions
What profit margin should I aim for on Amazon?
Target 30%+ gross margin and 15-25% net margin after all costs including advertising.