How to Calculate Amazon FBA Profit Margins and Amazon FBA Fees UK
Calculating Amazon FBA profit margins before ordering a products to sell on Amazon is vital to the success of any FBA private label seller. In this video I calculate the costs, profit margin and Amazon FBA fees associated with a typical product.
The standard Amazon FBA UK calculator does not show the VAT that is added by Amazon to the FBA fees, in this video I show you side by side screenshots from the freely available FBA calculator and the Amazon Seller Central FBA Calculator - in summary, always add VAT onto your FBA fees if you are not VAT registered.
Please use the FBA profit example blow as guide on how to calculate the profitability of your private label products:
1) FOB Unit Cost £4.00
2) Alibaba Trade Assurance Credit Card Fee 2.95% (multiply by 1.0295) = £4.12
3) Add Freight Forwarder Shipping Cost (Approximately 50p per KG) = £4.62
4) Add Customs Duty of 4% (multiply by 1.04) = £4.80
5) Add VAT at 20% (multiply by 1.20) = £5.76 (Make a note of this total)
6) FBA Fee (Selling on Amazon) 15% of Sale Price Fixed (£15.00 x 0.15) x 1.2 = £2.70
7) FBA Fee (Fulfilment by Amazon) Variable (£2.00 in this example) x 1.2 = £2.40
8) Total Unit Cost (£5.76 + £2.70 + £2.40) = £10.86
9) List Price = £15.00
10) Profit Per Unit (£15.00 - £10.86): £4.14 Per Unit (Approximately 30%)
Please drop a comment below if you have any questions about how to calculate Amazon FBA profit margins and fees, I reply to every comment within 24 hours. !
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