How profitably you sell on Amazon.com will depend on the characteristics of your product, order fulfillment method, additional services, and other factors. Today, we’ll show you how to get a rough estimate of your profit per unit of production and estimate Amazon sales margin using a calculator.
How to estimate Amazon sales margin using a calculator?
Selling cost on Amazon depends on your sales plan, product category, execution strategy, and other variables. The options are flexible, so you can find the combination that works best for you and your goals.
Thus.
All you need to enter is:
- Your cost of goods (per unit)
- Listing price (price that a customer pays to purchase an item on Amazon (excluding shipping).
- Product category (the category that best describes the product. Sellers pay Amazon a percentage of the total sales price for each product sold, and the “referral fee” depends on the category).
- Fulfillment method (sellers can send goods directly to customers (Fulfillment by Seller) or send inventory to Amazon (Fulfillment by Amazon).
If you have chosen the Fulfillment by Seller method, then you will also need to indicate the cost of delivery of the order. Note that Amazon provides shipping credit to offset this cost (with some limitations), but shipping costs are still included when calculating fees.
When you complete orders yourself, Amazon will charge a shipping fee based on the product category and shipping service the customer has chosen, and then transfers the amount to you in the form of a shipping credit.
If you have chosen the Fulfillment by Amazon method, then you will need to indicate the size and weight of the product. Unit fees include collection and packaging of your orders, shipping and handling, customer service, and product returns. The cost depends on the weight and dimensions of your product.
The example is here:
As you can see, based on the data provided, Amazon estimated:
- The selling price of the product on Amazon is $ 10.00.
- The cost of the goods is $ 5.00.
- Referral fee for the category that we have chosen – $ 1.50
- FBA fee – $ 2.70
Thus, your TOTAL MARGIN is $ 0.80.
The calculator provides an estimate that does not include taxes, sales plan fees, FBA storage fees, additional services, all possible shipping costs, and other costs your business may incur.
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