One of your most crucial objectives as a business admin who is involved in the sales of physical products on Amazon FBA is to discover your profitability. Whether the product in question has been launched on Amazon or not, figuring out your profitability is of paramount importance.
In this regard, while going through the phase of product research, you may need to do some research as well as calculations in order to estimate the potential of your product. In essence, this is consequential only when it is done before launching, as you will need to take the initial costs of investment into account, alongside other related costs too, including the FBA costs, and also estimated sales.
In the same vein, once your product is already out there in the park, that is, already launched, it is similarly essential to keep on top of your outgoings and fees, just to be sure that your business is being operated properly – more like a well-greased machine.
But then, it is quite unfortunate that several sellers on Amazon are caught in the web of losing money, which can be attributed to their failure of completing the above-described exercises, both before and after the launch of their products on Amazon.
In this regard, the Amazon FBA Calculator is a beneficial and efficient tool that helps a great deal in calculating margins. It also explicitly breaks down every one of the fees that are associated with selling your products with Fulfillment by Amazon (FBA) .
Whether you are still in the stage of research, wherein you make extensive findings about potential sell-able products on Amazon and seeking means of understanding margin potentials, or you are planning on making a switch to FBA from a merchant fulfilled model, having an extensive and detailed knowledge of how to make use of the FBA calculator.
In this article, we have made intentional and somewhat containing efforts at describing the full process of understanding the financials of selling your product on Amazon, and also how to make use of the free tool – FBA Calculator – to execute your calculations efficiently.
We have also included a list of the best Amazon FBA Calculator that you may consider using. Without much ado, let’s get down to business.
What is Amazon FBA?Â
FBA, an acronym for Fulfillment by Amazon, is a situation whereby sellers on Amazon send their product directly to the warehouse and logistics centers of Amazon. Consequently, when a customer orders any of your product, such a good will be shipped to such customers by Amazon themselves.
Also, all of your products that get sold and shipped in this manner are similarly included in Amazon Prime and consequently go as free delivery for all of Amazon's Prime customers.
Over time, Amazon FBA has grown to be one of the most popular means of earning a substantial income on the web. Factually, more than two million individuals, across the universe, put up their products for sale on Amazon. And as the case is at the moment, almost anyone can enlist their product to be sold on Amazon, irrespective of whether you made such a product yourself or purchased wholesale.
Nonetheless, the whole ideology behind the Amazon FBA is that you sell it while Amazon ships it for you. As simple as that!
Basically, the Amazon FBA works in simple and straightforward ways. Summarily, this is the way it works:
- You forward your products to Amazon.
- Amazon keeps such a products stored in its warehouses.
- When a customer orders any one of your products, they pick it up, pack it, ships, and track the order on your behalf.
- Amazon also handles refunds and returns.
However, the above-described process comes at a price – of course, it isn’t free. They charge interested and engaged persons, both fulfillment and storage fees. But then, payments that you make to Amazon also includes the platform's exquisite 24/7 customer service, shipping costs, and also grants you access to one of the most advanced and largest fulfillment networks across the universe.
Why use Amazon FBA ?Â
There are several enjoyable advantages attached to signing up for Fulfillment by Amazon. Below, we have outlined a few of these benefits:
Qualifies You To Have Amazon’s Name Associated With Your Products:
Signing up for Fulfillment by Amazon offers such a seller some extent of quality guarantee, which, of course, most buyers will appreciate, and almost always cause them to buy from such a seller. Basically, what the Amazon name does to both your product and your account is that it helps you to gain the exclusive trust of your potential customers, as they are somewhat sure of getting excellent customer service plus rapid delivery with sellers on FBA.
1.Subsidized Shipping Fees:
As a seller on FBA, you may enjoy subsidized shipping fees too. Owing to the already established relationship between Amazon and these shipping companies, sellers making use of this service, therefore, are allowed to pay lesser shipping fees. Besides, you may also enjoy exclusively free shipping over specific amounts since items sold via FBA are eligible for both Free Super Saver Shipping and Amazon Prime.
2.Multi-Channel Fulfillment:
Amazon is also capable of handling and shipping inventories that are being sold on multiple channels other than the Amazon marketplace,
3.Shipping Standardization:
All orders from Fulfillment by Amazon are processed in the same manner that Amazon handles its merchandise. This implies that when someone buys your product, Amazon picks such a product from its inventory, packs, and ships the product to such a buyer. Similarly, as a seller, you can feature an item on your website, and through FBA, still have Amazon handle all of the heavy lifting.
4.Access to the Prime Audience:
Amazon, via FBA, also allows you as a seller to reach out to both new and existing customers who are seeking free one or two-day shipping. This kind of service is filtered by Amazon, specifically for Prime-eligible products, and also only convert if the Prime badge is visible enough.
Understanding our CostsÂ
Before we delve deep, we must understand your costs. Basically, it is essential that you do this quite early as it serves as a deciding factor as to what products are worth the launch, and those that are aren't, plus, also the lifecycle of such a product.
The costs discussed herein can be broken into three major categories, namely:
- Variable costs (FBA fees, returns, storage fees, etc.)
- Upfront/Referral costs (cost of goods, samples, shipping, and photography)
- Marketing costs (pay per click and promotions)
The referral fee, in this regard, refers to the charge for selling your product on Amazon. The referral fee is measured as a minimum dollar amount or a percentage of the selling price, any one of them, which is more significant. The percentage of the sale price is category-oriented. That is, it varies by category. Although the standard rate in this regard is fifteen percent. Also, the minimum dollar amount is typically 1 dollar.
Overall, the referral fee is dependent on categories, and consequently, some categories have lower costs while some have higher fees.
On the other hand, the variable costs only apply to products of the media, such as music, books, videos, video games, DVDs, software, and consoles.
Overall, Amazon FBA fees are the costs incurred as a result of selling your stuff on Amazon. Usually, it amounts only up to fifteen percent of the product's price and an addition of 3 dollars, which covers the handling and shipping of the item. As much as Amazon FBA charges participants, considering how much one can earn via the program justifies that it pays in the long run.
More often than not, too, there are a few more small costs that are usually included, but quite unnoticed. For instance, we have the “think of return” fee, disposal costs, business costs such as payroll, insurance, taxes, and so on. But the thing about these smaller costs is that they fluctuate and change rapidly. Some stay the same anyway.
In this regard, how can you ensure that you are on top of everything, and also aware of your exact profits and outgoings? This is where the Amazon FBA Calculator becomes handy! Below, we have comprehensively described the exact situations that you may need to make use of the FBA fee Calculator.
When to Use the FBA Revenue Calculator?Â
There are several times to make use of the FBA calculator for Amazon. But one of the most helpful times is when you are doing researches about new, sellable products on Amazon. Apart from using this tool to have a grasp of what your potential profit margin is, the FBA Calculator also offers a clear and easy to understand statement of what the FBA fees actually looks like for every one of your products on a per-unit basis.
Another excellent way of making use of the FBA Calculator is to have a clearer understanding of the margin impacts from lowering or raising the selling price or cost price of an item. Information gotten in this regard comes handy when you seek to determine the exact product that suits your range of cost budget.
You may also make use of this information to determine the minimum selling price of your product in order to make a profit.
Also, this tool can be used when a seller is considering to switch to FBA from a merchant fulfilled model, as it offers a more precise comparison of margin and costs under each category.
Finally, you can make use of the FBA revenue calculator when you seek to understand margin impacts.
Best Amazon FBA CalculatorsÂ
Selling your products through Fulfillment by Amazon may result in considerable low profits, or worse cases, no profits at all. It may as well go as extreme as making losses too. But then, it is quite inarguable to mention that FBA offers an extensive range of advantages, too much to ignore. Hence, how can one decide?
Interestingly, Amazon practices an exclusively transparent FBA fee policy. Besides, as a seller signed up for the Amazon FBA, you can also make use of the FBA calculator for Amazon to check and confirm the profitability, estimated fulfilling fees, and margins of a product.
But then, there are several types of FBA fees calculator in this regard, which may leave you confronted with the problem of choice – having to choose which of the AMZ FBA Calculator will work best for you. In this regard, here in this section of our article, we have compiled a detailed list of the best Amazon FBA calculators you can find online.
IO Scout
The first on our list of the best Amazon FBA Calculator is IO Scout. If you are particular about getting comprehensive breakdowns, which includes a lot of information to assist you in understanding each step, then IO Scout may be the best option for you.
When you are an Amazon seller, it can be easy to get wrapped up in the product research and forget all about the fees that will be associated with each individual listing. However, this is an important aspect of your business, and neglecting to keep tabs on your costs is a major faux pas that can wind up costing you a lot of money.Â
This is where the IO Scout Amazon FBA Calculator can come in major handy! This tool is built to help you understand and prepare for the costs that are going to be associated with your Amazon listings.Â
With the IO Scout Amazon FBA Calculator, you can predict the following information:Â
- The fees associated with your listing
- The amount of profit to expect from a single listing
- The price you need in order to make a profit
- The amount you can spend to buy the merchandise
- The budget you should set for marketing
- Your overall profit margins
We will explore each of these ideas a little bit further.Â
The Fees Associated with your listing
Although selling on Amazon FBA actually helps to take a little bit of the pressure off of you, it is not a service that you can or should expect for free. Amazon is going to have to exert space, time, and energy to help you fulfill your orders; so, you will have to pay for that.Â
The fees associated with Amazon FBA include a referral fee, a closing fee, a storage fee, and then a fulfillment fee. Each of these fees actually has a unique formula for deciding how much you are going to be charged. Further, there is also a wide variation of price that it can cost Amazon to ship products to your customers.Â
Figuring all of this out on your own probably sounds a little bit more complicated than you might have been expecting. You might even understand why you can lose money if you forget to consider the fees.Â
This is where the FBA calculator becomes the tool that saves your business from going bankrupt. With this tool you can expect a clear understanding of what it is that you are going to owe Amazon each month based on your monthly sales.Â
Expected Profit
As important as anticipating the bill that will be sent to you through Amazon, is the anticipation of how much money you can expect to make. Doing the math to figure this out is complicated and too easy to make worrisome errors with. Using the FBA calculator, you can get a pretty accurate estimate on the money that you can expect to see after all the money is settled between the costs and profit.Â
Marketing
Any successful business tends to need a marketing budget in order to make sure that enough people get eyes on your brand. Using the FBA calculator will give you a good idea of the money that you can afford to spend on a marketing campaign. While it is important to market, marketing will not do you any good if you are spending more money than you are making from the start of your business.Â
Overall Profitability
Once you have a firm grasp on the amount of profit that you can expect to make from a single sale on your product, then you know the data you need in order to calculate your profit for more sales. Using the information you glean from the FBA calculator, you can multiply your profit by 10 or 100 in order to see what you will make on selling a larger number of items. No matter the number of sales you make on Amazon, your profit margin always remains the same which is a great benefit of being an Amazon seller.Â
It seems clear that the benefits of the Amazon FBA Calculator from IO Scout actually make your journey as an Amazon seller much easier. IO Scout has a full set of useful tools for your Amazon business, but even just the simple tool of the Amazon FBA calculator makes the investment into these tools worth it for you business. Without these tools, you will have to do this research and math all on your own.
IO Scout FBA calculator is completely FREE.
Viral Launch
One of the exciting things about the Viral Launch FBA calculator is its ease of use and user-friendliness. All that you need to do is to copy and paste the URL of your product and hit the “calculate” button.
However, should you also want to get more details about the fees, then you may also opt-in to watch their videos or the sign-up features, which allows you even to earn more. The viral launch features chrome extension too.
AMZ Scout
Another free Amazon FBA calculator that we consider worth using is the AMZScout FBA fee calculator. One exciting thing about this tool is its diversity of use. Via their official website, you can either calculate your fees, or you can also do so by installing AMZScout’s chrome extension. And, of course, both options are free!
AMZScout also offers an easy-to-use and quick responsive interface to its users. All that you need to do is to copy and paste the URL of your product and allow them to handle the rest.
Seller App
Seller App is relatively more straightforward when compared to several other FBA calculators. This tool doesn’t calculator the total sales volume. Instead, what it does basically is to help its users to connect all the dots, including Sales, Operations, and Marketing, into a single platform to ensure the growth and ultimate success of such user. SellerApp is also free!
Salecalc
Although, it is quite tasking to operate, talk about having to enter a lot of data manually, Salecalc is entirely free.
An interesting thing about this FBA calculator is that it doesn't only allow you to calculate your estimated profit for a particular product. Instead, with the tool, you can calculate for any product in a category. It also offers the calculated details of your various transactions. But then, we must mention that it isn’t as accurate and comprehensive when compared to others on this list, but then, its intuitiveness is one that can't be matched.
So, should you be seeking to know your entire profits and fees earned and accrued from selling a product on Amazon, plus your losses too, then this may be your best option!
ShipBob
Finally, on our list of best FBA Calculators, we have the ShipBob calculator! This calculator provides results under the basis of prices for FBA services that Amazon practiced in the past few months.Â
This translates to allowing its users to calculate their fees based on the size of their package, number of orders received, the average weight of their product, and other related variables that may have impacts on your Amazon FBA fee. All these are put into consideration to offer you an eventual accurate result.
How to use Amazon FBA Calculator?
Making use of the FBA calculators may not be as complicated as many assume. In fact, it is as straightforward as possible. In this section, we will be analyzing the entire process of making use of both the traditional Amazon FBA calculator and also those of the free FBA calculators discussed in the last section of this article.Â
The steps discussed herein are basically the general model of most FBA calculators.
Step 1:Â Insert some basic information and your fixed and upfront costs
In this regard, you may leave the formulas (usually colored green). However, you need to replace all the figures, sometimes colored red, with your information. For spaces that are not applicable, enter zero (0).
Step 2: Insert your marketing costs too if it’s applicable
Step 3:Â You may also check out your business financial analysis. Here, you will find what your Gross Margin will look like at various price points.Â
Once completed, you may hit the save button.
Similarly, if you are making use of the traditional FBA calculator of Amazon, then you should also know that apart from the fact that it is quite straightforward too, the steps involved are always the same irrespective of the country that you are selling from.
The steps involved are:
1. Navigate to the product’s page on Amazon.
2. Next, enter the product’s cost, shipping costs, and total cost per unit of such a product. To do so, simply switch to the calculator and do as required in the spaces provided.
3. Push the "calculate" button and wait for the Amazon FBA calculator to display the detailed breakdown of costs involved with your item.
And that's all!
Final Thoughts
Truth be told, these FBA calculators aren’t as perfectly accurate all the time as they seem to be. As proof, even Amazon provides a disclaimer in this regard, advising users not to trust the data in its entirety. So, we advise that you do not raise your hopes too high, nor should you place the entirety of your trust on these calculators, as they may falter sometimes.
Notwithstanding, up to an appreciable extent, one may trust your financials with these calculators. At least, so far, the best solution to knowing the exact status of your fees with Amazon FBA is by making use of the FBA calculator. Make use of any of the best Amazon FBA Calculators that we have reviewed in this article, and better your confidence in getting your financials right.
In this regard, hopefully, you can have a more confident feeling about managing your business financials on Amazon. Are you just starting or launching a new product too? This guide will help a great deal also!
FAQ Â
What do FBA Calculators take into account?Â
Basically, when you want to fulfill your products through Amazon, as a seller, you need to understand that Amazon will charge you for the following:
- Order handling
- Prep service
- Outbound shipping
- Picking and packing
- 30-day storage
- Weight handling
- Inbound shipping
Is FBA Worth It?Â
Before a conclusion can be made on whether an FBA calculator is worth its use, you must first put a few factors into consideration – elements apart from its costs, though. This, therefore, implies that this decision depends on your preferences as a seller. Hence, it is up to you to decide if it is best for you or not.
Nonetheless, we recommend that you go through this article to have a deeper understanding of the benefits to enjoy when using an FBA calculator for your amazon business.
Are FBA Calculators 100% Accurate?Â
Simply, No. No FBA Calculator is absolutely perfect, not even Amazon’s. This, too, has been discussed extensively in the conclusive part of this article. A lot of what you will be getting from these calculators are estimates. The good thing is that these estimates have been formulated to make the right estimates or in the least, a very close estimate.
