It is quite an effort to know how much income you can generate by selling a product on Amazon. Being one of the most popular marketplaces for online merchants, Amazon has a wide array of charges - marketplace account fees, variable cost fees, referral fees, shipping costs, etc. The fee depends upon whether you are an individual seller or a professional merchant, shipping your product yourself or using FBA (Fulfillment by Amazon).
One cannot estimate how much benefit can be earned by selling a product. Here, the readymade Price Calculators come to the rescue and helps you calculate how much profit are you going to make on the sale. Amazon Price Calculators are well equipped to help the sellers in determining their total profit on items after shipment and all money related transactions.
Let us take at the functioning of such a calculator.
Enter the details of the product such as its measurements, weight and the item’s price.
Let us consider that I am a bookseller selling a book with dimensions 9.5 × 6.6 × 1.5 inches, having a cost of $18, and utilizing Amazon FBA Service.
Open the Amazon Revenue Calculator and under the title ‘Revenue’, enter a value of $18 under the category ‘Amazon Fulfillment’.
Click on the ‘Calculate’ button. The calculator separates and displays the individual fees that you will need to pay to Amazon.
The Calculator displays the following outcomes −
Let’s analyze the results produced by the Calculator −
Amazon charges a Referral Fee of 15% of the item’s price on books. That makes the referral fee = 15 × 18/100 = 2.7.
Amazon will charge you the Variable Closing Fee of $1.35 because the books are listed under Media or BMVD product, and Amazon charges $ 1.35 on any BMVD product that you sell.
Coming to the Fulfillment Costs, refer to the Fulfillment Cost Table in Chapter 6 for Standard-Size Media Products. Since your product costs beneath $30,0 you do not qualify for Zero-Fee Fulfillment and will be charged $1.06 for pick and pack (per unit) and $1.24 for weight handling since the book weighs 1.5 pounds.
You don't have to pay any order handling fee or outbound shipping charges, since the weight is below 2 lb.
Amazon also charges a monthly storage fee of $0.03 per unit. Thus, the Fulfillment Cost Subtotal becomes $1.06 + $1.24 + $0.03 = $2.33.
Your total cost totals to $2.7 + $1.35 + $2.33 = $6.38.
The Item price was $18. Hence, your margin becomes $18 - $6.38 = $11.62.
Next, the calculator requests for the number of items you are selling in a month, let’s say 30 numbers. The calculator shows a chart comparing the revenue, cost and margin impact for selling 30 books.
The calculator also compares the values of your satisfaction and Amazon’s fulfillment. The fulfillment charges under the tab ‘Your Fulfillment’ are tentative and have just been taken for producing the example. However, Amazon’s FBA charges are always lower than the shipment charges you will confront.