FBA Calculator - Calculate Amazon Seller’s FBA Fees
Figuring out exactly how much profit you are making, or anticipate to make, is one of the biggest challenges of every Amazon seller. While growing revenue and a large bottom line can be enticing, in the end, it does not pay the bills. In reality, the net profits and your return on investment are what determines whether you have a successful product and a successful business.
While this sounds good, it can actually be hard to calculate. There are selling and referral fees, shipping fees, taxes, FBA fees, returns, advertising, and so on. While we can’t tackle all of these different fiscal complications here, we can address some of the more difficult ones: Amazon fees and FBA fees. One easy way to evaluate these costs for a product is by using an Amazon FBA calculator. While many companies offer these, the AMZScout FBA Calculator is accurate, convenient, and embedded in tools that help make it a one-stop-shop for Amazon data.
Table of contents
What is an FBA fee?
Amazon has a wide variety of fees. They charge a fee for selling products on their site, called a referral fee. Typically, referral fees are 15% of the sales price, though this has some exceptions based on category and final price. Additional fees exist for products that you choose to have Amazon fulfill.
Amazon has a fulfillment program called Fulfilled by Amazon (FBA). With FBA, you send products to Amazon’s warehouses, and they handle storage, distribution, shipping to customers, customer service, and returns. It comes with a fee, called the FBA fee, which varies based on the size and weight of the item.
Many Amazon sellers choose to use FBA because of the simplicity and the perks. When you choose FBA, it means your item gets the ever-important Prime badge. This typically helps with conversion and where your item appears in searches. Almost half of households in the United States have an Amazon Prime membership, and it stands to reason that they want to use it to get faster shipping. Some customers even select the option to only look at products with Prime delivery. In addition to this benefit, FBA sellers have an advantage in gaining the “buy box”.
The buy box is an algorithm that determines who is the “default” seller for an item with multiple sellers. It is based on both seller feedback and performance, return rate, shipping metrics, price, and things like Prime status. Thus, for sellers looking for an easy edge in the buy box, sending an item to Amazon’s warehouses can be a good option.
For all the benefits of using FBA, there are certainly some drawbacks. They charge seller fees based on both the size and the weight of the item. This is variable, and Amazon FBA fees can become quite expensive as the size or the weight increases. Here is a brief outline of some of these FBA fees for different size tiers. These change frequently, so be sure to check with both our website and the AMZScout FBA Calculator to make sure you are getting accurate estimates.
There are six product size tiers on Amazon, and between each tier the pricing changes substantially.
Each of these different tiers comes with different costs, shown below.
Realistically, most FBA sellers will not be working with these larger items, but it is important to recognize the different tiers and how it will affect pricing. Small changes in dimensions and weight can greatly affect profitability for your items, and will perhaps take a product from good investment to bad, or vice-versa.
What is an Amazon FBA Calculator?
Amazon offers its own FBA Revenue Calculator. It goes by many names, including the Amazon Fee Calculator, the Amazon Profit Calculator and even the FBA Revenue Calculator. It allows you to look up an ASIN and calculate the Amazon FBA fees based on the current size and weight entered for the item. This is a great tool, but can be tedious to use.
One difficulty with using Amazon’s tool is having to go to their website each and every time. It is much easier to have a broad platform of tools that can help you find the Amazon fees quickly and easily. This is where AMZScout’s FBA Calculator is especially effective. The AMZScout FBA Calculator is available both on our website and through our Chrome extension.
There are some important things to remember when using these calculators. First, they are based on the uploaded sizes and weights. Some users, when creating a listing, ballpark these numbers, or even outright lie.
- If you have a more direct understanding of the potential size and weight of your item, you can manually calculate this using the information about FBA fees.
- Not every item that looks very similar to your new product will have identical dimensions, and small changes in measurements can result in large changes in fees.
How to calculate FBA fees and revenue in Europe and other countries
The fees will vary not just by item, size, and weight, but also by country. This is not especially surprising. Amazon has different shipping rates throughout the world. As such, the fees for fulfillment can change drastically between the United States, France, etc.
Here are several of the different Amazon calculators for each country. It is worth noting that if you do not have a unified account between your stores in different regions of the world, they will not all work. For instance, if you only sell in the United States, only the FBA revenue calculators for Canada, Mexico, and the United States will work, as these are all part of the North American region. If you have a unified account connecting your North American Amazon account to your European Amazon account, the calculator for each of these countries will work as well.
App and Extension for Calculating FBA Fees and Revenues
Given the difficulties with using all of the different FBA profit calculators provided by Amazon, there are now apps and extensions that offer this service. The best of these is the Chrome Extension by AMZScout. This extension allows you to perform all of the calculations that Amazon’s FBA calculator can do, but with the added benefit of coming as one single extension.
The AMZScout Google Chrome Extension provides a built-in profit calculator t which is within the greater toolkit of an excellent app with a full suite of tools for Amazon sellers. This app provides information on monthly sales, margin estimates, daily sales, number of reviews, general competitiveness of the niche, how optimized each listing is, and gives you a general idea of the potential for a product or search term
Once you’ve found a product with good potential (potential score of at least 6), then you can look at the tools below each search result. By clicking on a particular product within the AMZScout app, you are given numerous other options. This includes finding the product directly on Alibaba based on matching images. More importantly, it allows you to open the profit calculator for each item.
How does FBA Calculator work?
The AMZScout profit calculator lets you enter in several variables, such as the product cost, price you expect to sell at, additional per unit costs (catch-all for things like advertising, cost of shipping from your manufacturer to your shipping agent, giveaways, cost to ship to Amazon, etc.), and additional monthly costs. It uses this to estimate your monthly profit and revenue for an item like the one being researched in the figure below, and even provides you with the return on investment figure.
Return on investment is important because it states your profits in terms of how much money you are putting in. If I can make $20 from the sale of an item that cost me $20 total, I have made a 100% ROI. If I make that same $20 on an item that cost me $100, I only had a return of 20% on my spending. Clearly, a higher ROI is better, though it will depend on volume, return rates, and other factors to determine if a product is worth selling.
The other important thing to note is that the AMZScout Calculator shows you estimated monthly storage costs. Amazon continues to charge storage fees, and if the past is any indication, these charges will continue to increase substantially over the next few years. They have raised the month-to-month storage prices and have substantially increased long-term storage fees. This means sending a massive quantity of inventory can be risky without previous sales history.
What are the costs to sell on Amazon?
FBA fees make up a substantial part of your costs for selling on Amazon. These fees may seem small for an individual item, but as you sell hundreds or thousands of units a month, they can begin to add up to massive amounts. The good thing is that, many of the other costs associated with selling on Amazon will become marginalized as your volume increases. This includes things like the Amazon Professional Seller fee, which is a $39.95 monthly subscription fee to sell items on Amazon as a pro.
If you only sell 40 items a month, this fee is significant, as it adds a full dollar in cost to every item you sell. But as your sales increase, many fixed costs become almost negligible. For a seller who sells 4,000 items a month, this fee is only one cent each. This is true with many other fixed costs for sellers.
It is important to differentiate between fixed and variable costs. Your fixed costs can decrease in effect simply though increasing your sales, while your variable costs tend to scale proportionally to your items. Some variable costs actually scale down as you increase. This is especially true for items that can be purchased in bulk, such as shipping supplies, boxes, or even the product itself! Oftentimes, the amount your pay for your first order can be cut down significantly when you place a bulk order for tens of thousands of pieces.
Besides the fixed and variable costs, there is the cost in labor that many Amazon sellers quickly forget about. When evaluating the efficacy of your business, you should at some point begin to consider the costs of your labor. If you put in hundreds of hours for a profit of $50 a month, you may need to re-evaluate your business. While sweat equity is a very real factor at companies, and every small business owner realizes they may not receive a paycheck early on, the time you and your partners put into the company eventually has to be considered as a cost when evaluating the profitability of your Amazon business.
FBA vs. FBM
Some sellers look at the expensive costs for Amazon fulfillment and think, maybe I should just handle this myself. Good news, that is certainly an option. Fulfilled by Merchant (FBM) is when the seller ships and processes all their orders, and handles returns, by shipping and receiving directly from customers. Sometimes it can be much cheaper. But there are some drawbacks.
If you are not approved or not shipping as a Prime shipper (a special program called Seller-Fulfilled Prime or SFP), you will not have the special Prime badge on your listings. If you are competing against other sellers on your listing, not being Prime means you will be hurt in your quest to win the buy box.
Surprisingly, sometimes the Amazon fees end up not being as expensive as they seem. This is especially true for smaller and lighter items. For the smallest category of items, Amazon charges $2.41 to fulfill. This is likely to be less than, or at least very similar to what you would spend to ship it out yourself. For these small items, FBA is usually the recommended method for fulfilling orders. For larger and heavier items, you may be able to save some money. If you are not SFP, make sure it is an especially non-competitive niche where perhaps the Prime badge will not be vital to sales. In these cases, it may make sense to ship the items to the customers yourself.
The other word of warning to those considering FBM: it changes the game. When the entire business is FBA, it is easy to run a truly mobile and flexible business. As soon as you begin shipping items yourself, fixed costs begin to increase, things like a warehouse and shipping materials become a larger part of the budget, and sometimes you sacrifice some of the flexibility that made you want to sell on Amazon in the first place. Be cautious before making the jump to fulfilling items yourself on Amazon. It may save a little money, but in the end can cost more in terms of total sales, time spent, and even long-term stability and vision of your Amazon business.
Tips to Reduce FBA Fees
All of this talk of fees, expenses, variable and fixed costs, and sweat equity may be disconcerting. Fear not, there are ways to keep these fees to a minimum and keep your profits as high as possi
#1. Know the cutoff points between size tiers.
Being aware of where a jump in FBA fees occurs can save you hundreds or thousands of dollars a month. The difference between a regular and oversize item can be the difference between a home run and a strikeout.
#2. Explore some alternative methods of fulfillment.
These include both FBM, which was discussed in depth, and Small and Light. This is a deeper topic for another day, but the Small and Light program offers slower fulfillment with the Prime badge and a reduction in fees for the smaller items you carry. It is worth exploring, and could bring you savings in the long run.
#3. Use programs like Seller Fulfilled Prime if you are a more established seller.
This allows you to sell larger and heavier items than you had previously looked at in the past and could help your business expand quickly. While smaller and lighter objects are always the first items sold by Amazon companies, big items can have a very high profit margin and ROI, but typically come with a higher upfront investment. These items mean extra research, and extreme caution, but could help take your business to the next level.
We’ve shown you what an FBA calculator is and how to calculate profits for Amazon items. We’ve also shown how these fees scale and change for different sellers, and why it is important to pay close attention to these fees. We encourage you to continue to check in with our site as a way to learn from Amazon experts’ tips and tricks for the veteran and rookie seller alike.