Becoming an Amazon seller can be one of the best steps for many brands to enhance their profitability. After all, it is the top ecommerce platform that has revolutionized the industry. However, Amazon seller profit depends on many things and factors you must take into account.
The key is to understand the fees as an Amazon seller so you can calculate your profit margins. So, if you are looking for a full picture of Amazon seller fees, profit, and much more, here is your complete guide.
Amazon Selling Fee And Costs
Amazon offers two plans to its sellers. The individual sellers have to pay $0.99 for each time they sell. However, they also have to pay the variable closing fee that can vary between $0.45 and $1.35.
On the other hand, the professional sellers have to pay a variable closing fee and referral fee percentage that comes to an average of 13%. However, they also have to pay $39.99 per month. Keep in mind that professional sellers don’t have to pay the item fee of $0.99.
Here are some top costs that Amazon sellers have to pay:
- Variable costs: Returns, storage fees, FBA fees
- Upfront costs: Cost of goods, samples, photography, shipping
- Marketing costs: Pay per click and other promotions
Understanding FBA Fee And Other Costs
Your Amazon seller profit will depend on the FBA fee and other costs. The FBA fee is the cost associated with becoming an Amazon seller. It will usually be 15% of the price of an item plus $3 to ship your product.
Keep in mind that you also have to consider other costs for your Amazon seller profit and loss. These include returns, shipping items back from customers, write-offs, disposal costs, and more. You also have to think of your business costs, such as taxes, payroll, insurance, and more.
Of course, these costs will keep on fluctuating, but many of them will also remain the same. So, how to calculate your Amazon seller profit margin if your costs keep fluctuating like this? Let’s find out.
How To Calculate Profit On Amazon Seller
Fortunately, Amazon has an excellent FBA calculator that can help you calculate how much you will pay in fees to use the FBA model. The FBA calculator depends on the country you are from. These include:
- Canada FBA Calculator
- France FBA Calculator
- Germany FBA Calculator
- India FBA Calculator
- Italy FBA Calculator
- Mexico FBA Calculator
- Spain FBA Calculator
- UK FBA Calculator
- US FBA Calculator
The first step you need to do when understanding how to calculate profit on Amazon sellers is to use this Amazon seller profit calculator. To do this, you need to identify the following expenses first:
- Referral fee
- Removal order fee
- Inventory storage fee
- Returns processing fee
- Fulfillment fee
- Long-term storage fee
- Inbound shipping
Open the calculator for your country and enter the product title, ASIN, ISBN, EAN, or UPC. The fees will be based on the dimension and weight of the product. Once you enter your costs, you can click on the cost of seller fulfillment.
It will open up a small box where you can enter your costs of shipping, packaging material, monthly storage, labor, customer service, and more. It will then help you see your cost on a per-unit basis. You can then use this to calculate your Amazon seller profit margin.
Ways You Can Streamline Your Amazon Seller Costs
If your Amazon seller profit is too low, you can always streamline your costs. You can do that by:
- Adopting Better Practices For Inventory Management
A stockout can also cost you in many ways, as you can lose out on sales. Your competitors will be selling more and getting reviews. During this time, your rankings will take a hit and it will take you time to recover.
That is why it is crucial to adopt better inventory management practices for your Amazon selling. It will help you prepare for any stockouts and the costs associated with them.
- Negotiate With Suppliers
Reduce your costs and increase your Amazon seller profit margin by negotiating with your suppliers. If you order more inventory, you can receive a discount and your cost per unit will lower. That is why it is crucial to create an excellent relationship with your supplier to source items.
So, keep assessing your supplier relationships from time to time and understand how you can use them to your advantage to cut costs in no time.
- Decrease Returns
Finally, you can decrease returns to increase your Amazon seller profit. You can do this by using services to contact sellers who are initiating returns to solve the problem and prevent any negative feedback. You can also have a strict return policy to protect your business from low-profit margins.
Try Dropshipping Instead With SaleYee
If you want to increase your Amazon seller profit, you can always opt for the Amazon dropshipping model. You don't need a high initial investment for it and anyone can begin with this model to enhance their sales and profits. Keep in mind to choose the right platform for your Amazon dropshipping needs.
SaleYee is an excellent Amazon dropshipping platform that will offer you more than thirty-thousand profitable products. They have warehouses worldwide, which means your customers will receive free and fast delivery. Finally, their customer support is excellent as they will help you out at any day and anytime.
So, if you are looking to become a successful Amazon seller, you can start with the dropshipping model. It will enable you to lower your costs and you will begin making a significant profit in no time.
Final Words
That was your complete guide on how to calculate profit on Amazon seller. Now that you have everything you know, you can calculate your profit margins and begin making the right decisions for your shop. Keep in mind to use the dropshipping model if you want to make the most of your Amazon journey. Once you opt for dropshipping, your costs will lower and profit margins will increase.
