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Amazon FBA allows you to outsource storage, packaging, shipping, customer service, and returns to Amazon.
Therefore, Amazon charges you a fee which has a significant impact on your net profit. Amazon FBA fees depend on several factors, which we will all discuss later in this article.
Since it's a lot of hard work to calculate Amazon FBA fees manually, you should use the AMZScout FBA Calculator.
The AMZScout FBA Calculator is an Amazon Chrome Extension that calculates all FBA fees automatically and tells you whether it's worth selling a product on Amazon or not. The calculator gives you an idea of what profit you can make at what selling price.
All you need to do is to enter some information such as production costs or shipping costs. The AMZScout FBA Calculator then automatically calculates your potential profit.
If you want to know how to use the AMZScout FBA Calculator, you've come to the right place. In this post, we show you how to use the calculator to estimate your costs and profits.
If you also want to learn more about other AMZScout tools, I recommend reading our AMZScout Review.
The AMZScout FBA Calculator is available at the Chrome Store. You can also head over to AMZScout's website and download it:
After you've installed the Chrome Extension, the AMZScout symbol shows up on the right side of the URL entry in the Chrome Browser.
Click on the symbol to start the Chrome Extension:
Within the Chrome Extension, you can enter data like product costs, shipping costs, taxes, or CPC per unit. Data such as the size or weight of a product are automatically identified by the tool.
It's important that you first select a product on Amazon and then activate AMZScout. The calculator then gathers all the essential data.
The production costs per unit vary depending on the supplier, order quantity, and your negotiation skills.
In general, the more units you order, the lower the costs per unit.
Always try to keep costs per unit low since these costs directly influence your profit margin. If you don't know the exact costs yet, enter an estimated value.
Besides production costs, shipping costs also play a crucial role.
The costs vary depending on the supplier's location and how fast you want your inventory to be delivered.
In general, you can ship products by sea freight (low cost) or by air freight (more costs).
Keep in mind that you also have to calculate shipping costs per unit. Assuming you've ordered 300 units and you've to pay $300 for shipping, the shipping cost per unit is $1.
It's the same as with production costs. The more units you order the lower your shipping costs per unit will be. Try to keep these costs low.
If you launch a new product on Amazon, you've to promote it. Otherwise, you won't be very successful.
If you use Amazon PPC, you have to pay per click.
According to Adbadger, the average CPC (Cost-per-Click) is $0.97, while the average ACoS (Advertising Cost of Sales) is 34.42% of the selling price. (Source)
Of course, you need to consider these costs in your calculation.
You've to pay taxes on every single sale you make. Taxes vary depending on country and situation. To simplify things, you can assume a tax rate of 20%.
It's the price you sell your product on Amazon. Don't consider any planned discounts, just enter the real selling price of your product.
I think it's clear what the estimated monthly sales are.
AMZScout FBA Calculator suggests a value based on historical sales data. Try to slightly decrease this value to minimize the risk of miscalculation.
Amazon FBA fees vary depending on the size and weight of an item and are mainly divided into the following categories:
Amazon charges a monthly storage fee. The Amazon FBA Calculator shows you these estimated monthly storage fees automatically.
The dimensions and weight of a product determine the fulfillment fees. Thus, you've to consider the size of an item since this has a significant impact on your profitability.
In addition to the fees mentioned above, Amazon also charges a referral fee. The referral fee is on average of 15% of the selling price.
I highly recommend checking out this article for a detailed overview of all Amazon fees.
Besides all the benefits of Amazon FBA, there are also some drawbacks. You have to pay lots of fees which lower your profit margin.
The costs to sell on Amazon quickly become quite expensive as the size or weight of your product increases.
If you want to sell on Amazon successfully, you'll need to calculate your costs and profits exactly.
And you should use AMZScout FBA Calculator to do this.
The calculator shows your Profit Margin, Return on Investment (ROI), and the Estimated Monthly Turnover.
The AMZScout FBA calculator is extremely helpful in planning an FBA business, which is why every Amazon seller should use it.