FBA Margin Calculator

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Part Number:fbamargin
MARGIN CALCULATOR FOR FBA Using our Margin Calculator spreadsheet for FBA, it is easy to calculate the actual margin for any FBA sale. The level of detail is beyond that of the basic calculator offered by FBA and you can track changes in fees, shipping, wholesale costs etc. over time. In our experience, many sellers guess margins and set pricing at a point below profitability. Below I will explain how to enter data into each column and explain what the resulting numbers mean. You can create your own spreadsheet from the information below or for a nominal fee, purchase a preformatted spreadsheet here: Margin Calculator spreadsheet for FBA SKU Column In the SKU column, enter your unique identifier for the item. ASIN (Amazon Standard Identification Number) Column Self-explanatory. Order ID Column I highly recommend populating this column. If there is every a question about an entry, you can easily check for accuracy. Date We recommend that you use two digits for year, month and day with the two digit year number to the left. This allows sorting by date across the end of the year. For example, 171231 would sort just before 180101. Populating the date column allows changes over time to be monitored. Selling Price This is the price of the unit that you set. It is the price that the customer pays. Amount Collected Column This is the amount Amazon will give to you after fees. We believe this may be one of the most overlooked metrics by newer sellers! You can find this amount for an individual sale by going to Orders > Manage Orders (see Fig. 1 below)> In the Orders Details Column click the Order ID Number > Click “Grand Total” to see the fee breakdown. (see Fig. 2 below). The “total” amount (see Fig. 3) is the number to put into this Amount Collected Column. The “total product charges” amount is the price you set. This is the price that the customer paid for the item. Also, to get this number you can create a detailed transaction .csv (comma separated values) report that will have this information for all sales within a given time period. In Seller Central go to Reports > Payments > Date Range Reports > Generate a Report. Select a date range for the pertinent month or choose a custom time period. Choose “report type” transaction. Profit Column This amount is calculated by subtracting the COG from the amount collected from Amazon. This is the number you need to pay attention to! Min. Listing Estimate This number is a calculated estimate of the selling price at which you will break even on your item. This is a linear calculation on a logarithmic phenomenon (Noah can you make this linear?) so it will never be exactly accurate… unless by chance you happen to price your item exactly at the break-even point! Nevertheless, since it is calculated by subtracting the profit from the selling price, if you don’t price below this number, you will not lose money! C.O.G. (Cost of Goods) Column This amount is calculated by summing columns K through O. For simplicity, I did not add the cost of an Amazon pro account or other miscellaneous fees. Margin Percentage Margin Percentage = (Revenue – COG)/Revenue This measure is calculated using the Amount Collected (after fees) from Amazon as the revenue number. Arguably, using the selling price as the revenue number would not be very useful because Amazon does not put that amount into your bank account! Wholesale Cost Each This is the price you paid for the item. Cost of freight each to get them to you is calculated in the next column. Inbound Shipping Each This number is usually an estimate. Often, when purchasing wholesale, a variety of item will be purchased all at once. If you calculate the cost of shipping per item across several orders from a single supplier you can get a fairly accurate, average number. Packaging and Prep Each Boxes, polybag, tape and any other cost associated with preparing your item for sale at FBA. Shipping to FBA Each This is an estimate. It can be very accurate though, if you regularly ship case packs to the same warehouse. For example, 10 units costing $10.00 to ship to a FBA warehouse equals $1/each Miscellaneous Costs Each Amazon prep if you use their labeling service, labor, and any other product costs that are not figured into the other columns. Amazon Fee Real Percentage This is calculated by dividing the amount collected from Amazon by the Amazon sale price that the purchaser paid. This tells you the real percentage that Amazon keeps! Lower priced items will have a higher percentage here because the fixed costs (e.g. FBA Order Handling Fee, FBA Pick & Pack Fee) remain the same. This is worth considering when planning to sell lower priced items. Final Thoughts *For some items, it may be a better use of your time to just get close. For some of our smaller items, I simply enter the wholesale cost of goods and stick $2.00 in the in the “Shipping to FBA” column. The bigger point is that you want to know as accurately as possible the dollar amount that you can list at without losing money. *Be sure to use data from FBA orders that don’t have multiple items. Otherwise the percentages and fees will be inaccurate. *Be sure to collect multiple examples for ASIN’s over time since Amazon fees and other costs change over time. *You can use the spreadsheet to calculate margins for Seller Fulfilled items also. Just put your cost to ship to the customer into the “Cost to Ship to FBA” column. *This spreadsheet doesn’t figure in miscellaneous expenses like your Amazon Pro Seller Fee $49.95 per year, returns that are unsellable, and generally running your business.