How to use the Amazon FBA Calculator for Beginners

by | Dec 20, 2021

Awesome! You’ve found a product you want to sell on Amazon, but the only problem is, you’re not too sure just how much profit it will make!

Amazon fees can be confusing — there seem to be extra charges left, right, and center.

So, how can you be sure you’re on to a winner?

And the winner is... meme

Source: imgflip.com

Fortunately, Amazon provides an FBA calculator for working out all the potential fees. It’s free and super helpful once you’ve figured out how to use it.

This post takes a deep dive into the Amazon FBA fee calculator. I’ll show you exactly how to use it and explain each section.

I’ll also give you access to a special spreadsheet that I use myself to take your Amazon cost calculations to the next level. My spreadsheet builds in all the extra charges you need to look out for when you bring a product to market under your own brand.

Once you’ve read this post, you’ll be able to confidently know if your product will be profitable when you sell it by Amazon FBA.

Let’s jump right in.

What is the Amazon FBA Calculator?

The Amazon FBA calculator is a free tool provided by Amazon to accurately work out fees and profit margins for products sold by third parties on Amazon.

Amazon has complex calculus methods, and if you want to understand why the fees are so complicated, read my post on Amazon Fees.

But, in brief, Amazon’s FBA fees depend on the category of product you’re selling, its weight and size, and how long it sits on the shelves taking up space in the Amazon Warehouse.

Amazon also regularly tweaks its FBA charges. To get a precise understanding of what it will cost to sell a product on Amazon, always use Amazon’s FBA calculator first.

There are separate calculators for each country that Amazon operates. The US market one is here ― links to the FBA calculator for other countries are in the FAQ section below.

Amazon FBA Calculator

Amazon FBA Calculator

When would I use the Amazon FBA Calculator?

Finding out the per-unit fee for a product is the first step in narrowing down the list of potentials you are thinking of selling.

It allows you to play with different selling prices and see your potential returns for various price points. When you understand the actual returns you can expect, you can then determine if the manufacturer’s price works for you.

You may also use the Amazon FBA calculator if you currently sell products by FBM (you stock and ship the item). You can quickly see potential returns if you decide to let Amazon take over order processing, warehousing, and dispatch with FBA.

Help! I don’t understand Amazon FBA fees?

Amazon provides a fantastic opportunity to sell your products via their marketplace. It’s is one of the biggest online e-commerce sites globally, with millions of daily visitors looking to spend hard cash.

When you sell a product using the Amazon FBA program, several steps have taken place from Amazon’s point of view —

  • You’ve had access to Amazon’s website shopping traffic.
  • Your product is already stored in their warehouse.
  • Their workers have packaged up a sold item and shipped it using Amazon’s logistics.

Amazon charges you for each step in the process, rather than a single fee. The difference in a product’s size, weight, and value means that it’s ultimately fairer for Amazon to itemize their costs.

So now, let’s take a look at how you use the Amazon FBA calculator.

How to use the Amazon FBA Calculator.

First, Know What an Amazon ASIN is.

Amazon sells over 12 million different products, requiring a highly systemized and streamlined organization system. As a result, every product on sale is issued with an ‘Amazon Standard Identification Number’ or ASIN for short.

When you have an idea of a product you want to sell, it may well be the same (or something very similar) as a product already on sale in the Amazon marketplace. To use the FBA calculator, first find the product you want to sell and look for its ASIN.

The ASIN is usually found in the ‘Product Details’ section of a product page, as in the picture below.

Amazon product details

Amazon ASIN in product details

Opening the FBA Calculator

Once you have a product ASIN, copy it and head over to the Amazon FBA calculator. When the page loads, everything is greyed out, so you need to enter the ASIN to open up the calculator.

The calculator also works with other standard product stock codes, like a UPC, EAN, or ISBN. If you want to recreate my example as we go along, I have used the ASIN B074QMDT96.

Product search by ASIN

Entering the product ASIN

 
Once you’ve entered the ASIN and hit search, the product is populated, and the screen looks like the next image. Amazon returns the product’s title, its size and weight, and the main product image.

Below is the main calculator layout. There are two columns: ‘Your fulfillment,’ for FBM, and the second column,’ Amazon Fulfilment,’ is for FBA. If you’re starting an FBA business, which I recommend, you only need to focus on the second column.

Amazon FBA Calculator layout

Amazon FBA Calculator layout

How to use the Amazon Fulfilment (FBA) Section

There are four pieces of information required to calculate the fees & projected profit. They are;

  • Item price. Your target sale price.
  • Ship to Amazon. How much it costs you to ship a single item to Amazon’s warehouse.
  • Average inventory units stored. How many units you want to stock in the Amazon warehouse.
  • Cost of product. How much a single unit costs you to buy.

Enter this information in the boxes highlighted below.

Note that by default, the average inventory units are pre-set to one.

FBA calculator - fees & prospected profit

FBA calculator – fees & prospected profit

 
When you have data entered into these four sections, hit the calculate button, and the FBA calculator fills in the rest. In the example below, I’ve input the following prices for each piece of information.

Item price. $12.99

Ship to Amazon $0.25

Average inventory units stored left untouched

Cost of product $3.50

I have calculated my ship to Amazon price for the item as part of a larger shipment of products. If you are shipping to Amazon in bulk boxes within the same country, then $0.25 is close enough for a small product like a BluRay DVD.

Here are the results —

FBA Calculator Results

FBA Calculator Results

 
Now let’s take a look at each of the sections of the calculator in turn.

Revenue Section

This section details the fees Amazon charges you for the privilege of selling over the Amazon platform. You can see that the total revenue equals your sale price, then it deducts a fee for selling on the platform of $3.75.

If you click the $3.75 link, it shows you how this fee breaks down. For a further explanation of the costs, read my post here on Amazon Fees.

Selling on Amazon fees

Selling on Amazon fees

Fulfillment Cost Section

This section displays the fees involved in shipping the item. You can see that your ‘Ship to Amazon’ fee makes up part of the total, with the remainder being the fee Amazon charges to pack and ship the order directly to the customer.

The total cost for all of this is a reasonable $2.75.

Amazon fulfillment cost

Total fulfillment cost

Storage Cost Section

In an ideal world, all of your products would sell out as soon as they hit the Amazon warehouse! But, life’s not like that. Your products will sit on Amazon’s warehouse shelves for a while, so you get charged for this service.

Storage fees are tricky to calculate precisely — it depends on the average daily cubic footage of space your products occupy. But, Amazon calculates that this BluRay will have a monthly storage fee of $0.03.

So I can wait a few months for a sale without it eating into too much of my profits.

Amazon FBA calculator storage cost

FBA calculator – Storage cost per unit sold

Profitability Section

This section tells you how much you can expect to make on a single item when it sells.

The seller proceeds of $6.46 are calculated as follows;

Your $12.99 sale price, less the cost of the three sections outlined above —

Selling on Amazon – $3.75

Total fulfillment cost – $2.75

Storage cost per unit – $0.03

This leaves a profit of $2.96 once you take off your $3.50 cost of the product.

FBA calculator net profitability

Net profitability

 
Missing from the calculator are long term storage fees. These are fees that Amazon charges when an item has been in their warehouse for over 365 days. Long-term storage fees are incredibly high, so it’s something you need to keep an eye on.

However, the bottom line is that our BluRay DVD will make a profit of $2.96 per item when it sells.

The Graph Section

The graph section is best used for visualizing multiple sales of a unit. You can enter the number of units you want to send into the warehouse and see how much profit they would ultimately make you when they all sell out.

If you consider fulfilling the product yourself as an FBM seller, you can add your own fulfillment costs and compare them to the potential profits achievable as an FBA seller.

But if you leave those cells alone, it will display the existing figures in a bar chart.

FBA calculator graph

FBA calculator graph

 
Enter estimated monthly units and hit ‘calculate’ again to see volume profits.

How Do I Calculate Extra Costs?

Of course, selling the odd BluRay DVD here and there does not an Amazon fortune make.

To make a good lifestyle income, you should aim to launch your own brand product that you have manufactured on your behalf.

This likely means that you need to ship stuff between countries and use services like FBA inspectors and pre-Amazon processing services in your chosen Amazon marketplace.

You need to understand the full cost picture before you move ahead with a product. So, I created my own FBA calculator where you can add in all those extra charges. It’s a Google Spreadsheet, which you can access here.

Amazon FBA calculator spreadsheet

FBA Calculator Google Sheet

 
As you can see, it looks a little complex, so I created a short walk-through video that explains how to use it:
 

 
Combine the FBA calculator with my spreadsheet to decide whether your next Amazon FBA product is a winner.

Amazon FBA Calculator FAQs

Which Amazon FBA calculator should I use

It’s essential to use the relevant Amazon FBA Calculator for the country you’re selling in. Each calculator uses the location’s own currency, so it should be immediately apparent if you are using the wrong one.

Here is a link to the currently available ones.

Which FBA Fees Are Included in the Amazon FBA Calculator?

All the fees to sell an item are included in the Amazon FBA calculator with one exception — long term storage fees. The long term fees are very high and are charged after 365 days of storage in the Amazon warehouse.

What Other Costs Are There for Selling on Amazon?

Along with the FBA fees displayed in the calculator, you also have a monthly registration charge, currently $39.99, to access the Amazon marketplace.

Of course, the FBA calculator does not show additional costs like marketing, design, or any other manufacturing costs like a third-party inspection.

Is the Amazon FBA calculator accurate?

If you use the correct ASIN or other standard product code like a UPC, you can rely on the calculator’s fee output.

Conclusion

Understanding the FBA fees Amazon charges is a critical aspect of selling a product via the FBA program. Don’t try to guesstimate your fees. Use the calculator provided so that you understand precisely the cost of each element.

Final product fees, logistics to and from the warehouse, and storage are all parts of selling via Amazon FBA, so you need to have a firm handle on it to be the right side of profitability.

Fortunately, the FBA calculator is a valuable free tool to help you calculate your costs quickly. You can use it without signing up to Amazon first, so you can get an understanding if it’s a business model you want to try.

To get the whole picture, my calculator compliments the FBA calculator and enables you to factor in costs like Inspection and Promotion.

Amazon FBA calculator is a great business model. What product are you going to sell?

 

Please share with anyone you think this might benefit. Thank you 🙂