A product that sells for $35 and costs $8 from the supplier does not automatically produce $27 of profit.
Start with landed cost
Landed cost commonly includes:
- Product cost.
- Packaging.
- Prep and labeling.
- Inbound shipping.
- Duties and import costs.
Add marketplace and fulfillment costs
Amazon referral fees vary by fee category. FBA fulfillment depends on product details and current fee rules. The safest workflow is to use a current Amazon Revenue Calculator estimate and enter it into the planning model.
Spread expected losses across every order
If 5% of orders are returned and each returned unit creates a $12 loss, the expected return cost is $0.60 for every unit sold.
This approach prevents return costs from disappearing from the margin calculation.
Calculate the complete result
Use the Amazon True Profit Calculator to see:
- Profit per unit.
- Profit margin.
- ROI on landed cost.
- Profit before advertising.
- Break-even selling price.
The output is only as reliable as the assumptions entered, so keep fee and supplier inputs current.