Being an Amazon seller can help you grow your business. FBA allows you to avoid shipping costs and buyers are more comfortable with FBA. To price your products competitively with other sellers while still making a profit, you need to balance FBA costs, the purchase price, and the sale price. Amazon offers a variety of product categories that can be used to calculate its commission, fulfillment fees, and shipping costs. It is difficult to calculate each item’s price manually.
In this article, we will explain how you can use Amazon’s FBA calculator to estimate the profitability of your products and make better business decisions.
Table of Contents
- 1 What is an Amazon FBA calculator
- 2 What types of costs are included in the Amazon FBA Calculator
- 3 When to use the Amazon FBA Calculator for best results
- 4 Why you need to calculate Amazon FBA profitability upfront
- 5 Here’s the step by step process to use Amazon FBA Calculator
- 6 Does the FBA Calculator Work for All Marketplaces?
- 7 Glossary associated with Amazon FBA calculator
- 8 Why Amazon FBA Calculator Alone Is Not Enough
- 9 What are other alternatives to Amazon FBA calculator
- 10 Conclusion
What is an Amazon FBA calculator
If you are a seller trying to decide whether to use Fulfilment-by-Amazon (FBA) or another fulfillment method, the Amazon FBA Calculator will be of great help for you. A seller can use the calculator to either calculate FBA fees or compare just to FBM (fulfillment From Merchant) with FBA
The Amazon FBA calculator can help you determine if you are an Amazon FBA seller. This calculator gives you an accurate estimate of your profit on each item and every sale. FBA calculator calculates the correct fixed closing fee based on price category, shipping charges according to volume, size, weight, or volume, pick-and-pack fee, and any storage fees that may be applicable.
Just select the Product Category according to your product, and then enter the price. Amazon FBA calculator will provide a breakdown of all costs associated with fulfillment. You can even see details like monthly storage, labor and packing material costs, shipping costs, and customer costs.
A breakdown of the calculation shows selling fees, fulfillment cost, and your net profit. It is easy to adjust the numbers to find the right selling price based on your purchase price. This can be done quickly and without any complicated calculations. You will never need to manually calculate the FBA calculator again once you have learned how to use it. This will ensure that you always know the exact profit margin for each transaction.
If you are a seller trying to decide whether to use Fulfilment-by-Amazon (FBA) or another fulfillment method, the Amazon FBA Calculator will be of great help for you. A seller can use the calculator to either calculate FBA fees or compare just to FBM (Fulfillment by Merchant) with FBA.
What types of costs are included in the Amazon FBA Calculator
1. Referral fees
Referral fees are the “commission” Amazon pays for every item that is sold through its platform. This fee is usually a flat percentage, typically 15% or less.
These fees are not required upfront. Referral fees are deducted from your Amazon account once the sale has been made.
2. Pick & Pack
Cost of retrieving the item from the warehouses, packing it (including packing materials), and shipping it. This also includes labor costs.
3. Weight Handling
Amazon bases shipping costs (from the warehouse to the buyer), on weight. Although “free shipping” is not really free, the FBA merchant pays the bill. However, it seems quite appealing to customers. While you may not be able to cover all costs, a portion of Prime membership fees is included in compensating Amazon shipping costs.
4. Monthly Storage
This is the monthly cost to store your product in Amazon’s warehouse. It is calculated per cubic foot and on a monthly basis.
5. Prep Service
This cost is also paid by the seller and thus included in the Amazon FBA calculator. This cost is charged per item to prepare your goods for shipment for doing work like applying UPC code, wrapping items.
When to use the Amazon FBA Calculator for best results
The FBA Calculator can be extremely useful when you’re looking for new products to sell. It will provide you with an estimate of the FBA fees per unit and a rough estimate of your net profit and margin when you start to sell the item via FBA.
It can also help you to understand the impact on margins if you plan to increase or decrease the price of an item or its product cost. The calculator can help you determine your product cost budget and determine your minimum customer price to ensure that your business is profitable. If you plan to change from FBM to SFP, the Amazon FBA Calculator can be used.
If you are just starting to sell on Amazon, Amazon’s FBA calculator can help you compare the bottom-line profits between Merchant (FBM), fulfillment by Amazon (FBA), and Seller (FBM). Once you have started selling on Amazon through FBA, you will require more advanced tools to manage and track your sales.
Why you need to calculate Amazon FBA profitability upfront
Figuring out your profitability is a crucial business admin task if you sell physical products via Amazon FBA. It may seem difficult to keep track of Amazon FBA fees. However, whether you are a first-time seller or an experienced FBA seller, it is crucial to do proper research and calculate each product. This includes taking into consideration order revenue, seller fees, and production and fulfillment costs, as well as platform costs.
Amazon sellers who don’t keep a track of Amazon fees can find their profits dropping or they’re barely covering their cost. Once you have products in the wild, it is important to stay on top of your expenses and fees to ensure that your business runs smoothly.
Here’s the step by step process to use Amazon FBA Calculator
FBA calculator can be used for any item you wish to sell on Amazon. You can use any search term (e.g., round clock, wooden clock, round wooden alarm clock) to get started with the FBA calculator. Round clock, wooden clock, or round alarm clock that is associated with the product, its ASIN, EAN, and ISBN.
We will use the ASIN to make it easier for new sellers. The ASIN can be easily accessed by new sellers in the product information section, still located on the product listing page.
Once you find it, just copy and paste the ASIN to the FBA calculator’s search bar and click search.
Input Product Price
Once the result is displayed, sellers can place the values into the Amazon fulfillment column. The seller will decide the margin that this alarm clock can earn.
If the seller is interested to become an FBA seller or an FBA seller already, make sure you only focus on Fulfilment by Amazon (FBA). In this example, $20.00 will be entered as the sale price or item price.
Input Fulfillment Cost
After the item price will be entered by the seller. Next, the Fulfillment cost value for Ship to Amazon will be inputted by the seller. This input box shows the average price per unit of the item that a seller plans to sell.
If the seller does not know the average price per unit, they might leave it blank. In this case, the shipping cost for the alarm clock would be $0.40.
After paying the “Selling on Amazon fees”, sellers must fill in the cost of the product field. This pertains to the total cost of the item sellers will sell on Amazon. The “Cost of Product” field only refers to the total cost of purchasing an item from a wholesaler or manufacturer. It is “all in” as other costs, such as shipping overseas, packaging materials, and customs fees, will be added to the calculation.
For this example, imagine that a Chinese manufacturer sells an alarm clock per unit at $4.00, this includes all other expenses. The seller can now click on the “Calculate” button after entering the value.
Does the FBA Calculator Work for All Marketplaces?
Yes, Amazon FBA Calculator works across all marketplaces like the USA, UK, Europe, Canada, Australia, and India. Find below the link to each FBA calculator:
Glossary associated with Amazon FBA calculator
BSR–BSR also known as “Best Sellers Rank”, is often referred to as “sales rank”. It is the score that products are assigned based on past sales data. This ranking is automatically calculated by the Amazon A9 algorithm using historical sales data and recent sales. The BSR for products is updated hourly.
COGS– COGS, means Cost of Goods Sold that allows you to match the price of a product (and possibly the cost of getting it to market), and the sale of the product.
This will give you a clear picture of your real revenues, gross margins, and profitability for any given month.
Cost per Unit– The cost per unit can be defined as how much money the company spent to produce a single unit of a product or service. This calculation takes into account two factors, namely the variable cost and fixed cost. This number is used in determining the price of products or services.
FBA– Fulfillment by Amazon (FBA), is a storage and shipping option that Amazon provides to help businesses sell their products. Amazon’s fulfillment centres are specially designed to receive and pack products for FBA. Amazon will then pick up, pack, and ship the products to the customer. All post-sales services, including returns, refunds and customer service, are taken care of.
Gross Margin – Gross margin is the difference between net sales and cost of goods sold (COGS). It’s simply the money that a company keeps after paying the direct costs of producing the goods and services it sells.
Landed Cost– What it will cost to produce and ship your product to Amazon This includes more than the actual cost of manufacturing products or buying products. The landed cost includes all manufacturing costs, shipping/freight charges, freight forwarder fees and packaging costs, taxes, etc.
Net Margin Per Unit– Its simply the ratio of net income to revenue. It’s the ratio of net profits to revenue for a business or segment. The net profit margin is usually expressed in percentages but can also be expressed in decimal form. The net profit margin shows how much revenue a company has converted into profit.
Pick & Pack– Its simply means the Cost of retrieving the item from the warehouses, packing it (including packing materials), and shipping it. This also includes labour costs.
PPC– Amazon Pay Per Click is an advertising format in which advertisers pay Amazon a fee when a customer clicks on their advertisement (pay-per–click). There are three types of Amazon ad types: Sponsored Products and Sponsored Brands. This is an extended version of the previous Product Display ads.
Retail Price– Retail price refers to the final price at which a product is sold to customers. These are the end users, or consumers. This means that customers don’t buy the product to resell it, but rather to use it.
Stock out– When customer orders exceed the stock available, a stock out is created. When the demand for a product is greater than anticipated and the stock of safety stock does not have enough to fulfil all orders, a stock out can occur. Stock outs can also be caused by delays in the supply chains or stoppages in a company’s production process.
Why Amazon FBA Calculator Alone Is Not Enough
- To find out Amazon fees for a product you need to manually enter the product name, ASIN, or UPC. After you click the button “calculate”, you will see some nice bar graphs that compare FBA fees to what you would pay for fulfilment by Merchant (FBM). You are responsible for shipping and handling the products. The tool (or your browser), cannot save Amazon’s margin impact calculation for later. You will need to manually enter the retail price and other numbers.
- Amazon’s FBA calculator is free to use (click here to view it). However, you can’t export the calculation as a csv file or any other type of file. If you need to keep track of costs, such as to compare products with a higher profit margin, you will need to record each fee in a separate spreadsheet. You can’t also quickly recalculate the effect of promotions on your profit margin. If you don’t know the keyboard shortcut that flips through windows (holding down Alt-key on Windows OS) then you are wasting your time clicking between the FBA calculator to Excel or Google Sheets to record the costs you have just generated using the tool.
- With the FBA Calculator, you can’t compare product margins simultaneously Amazon’s free tool calculates FBA fees only one at a. As we mentioned, the Amazon tool cannot export data to allow you to compare FBA product profitability in spreadsheets.
- You Can’t Consider Additional Costs (Advertising, Taxes, etc.) Use the FBA Calculator for a Free Calculation. You get what you see. You will only get an estimate of the referral fees, handling fees, and other costs associated selling on Amazon FBA. The free tool doesn’t include ACoS, marketing costs, taxes (which can vary by country and state), and overhead like employee salaries and mortgage payments.
What are other alternatives to Amazon FBA calculator
Jungle Scout FBA Profit Calculator
Jungle Scout’s calculator is downloadable as an XLS file, which is quite different from other calculators. It will be delivered to your mailbox. You can then use it for an accurate estimate of product profitability, net margin, net profit and FBA fees.
- It’s super-easy to use both online and offline calculator
- Comprehensive breakdown of all costs and profit/loss expectations
- You can use the downloadable file on your PCs, laptops, or mobile devices.
AMZScout FBA Fees Calculator
AMZScout, one of Jungle Scouts’ main competitors couldn’t miss the chance to create a FBA fees calculator. This extension is available as a Chrome extension.
- Instant estimation of your sales and income.
- Complete information about Amazon’s commissions
- Based on the product’s dimensions and weight, fees are calculated
- All calculations are directly entered into the extension window.
- This calculator uses data directly retrieved from the seller central
Viral Launch Amazon FBA Calculator
Viral Launch is a popular provider of tools and services to Amazon sellers. While most of its products are available for a fee (but not the Amazon FBA Calculator), you can still get one for free. To get precise estimates of your margins or profits, all you need to do is to insert an ASIN, product link, and the landed cost, if applicable.
- This calculator gives you realistic estimates of all fees that you can expect
- This tool is ideal to get an idea of FBA fees, upfront investment required for new sellers and how much they will cost.
- Viral Launch’s Market Intelligence tools and Product Research tools are complementary to Viral Launch
We hope you have enjoyed our article about using the Amazon FBA Calculator. With this knowledge, we know that you can easily track your profit when selling on Amazon. it’s very easy to get carried away with the excitement of making money on Amazon, but if you are making bad decisions you might be making less money than you think. As you are planning your strategy you should look at the Amazon FBA calculator to see if you are making enough money. The Amazon FBA calculator will help you make better decisions.
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