To help you estimate potential costs and sales during the product research phase, you will need to run some calculations. In particular, Amazon FBA sellers use the Amazon FBA calculator to help them figure out how much their expenses would be using the Fulfillment by Amazon business model.
If you Google the average monthly profit of an Amazon seller, an independent survey states that the number falls around $1000 to $25,000 per month.
The average monthly sales of an Amazon seller depend on various factors. This explains the wide range of the average Amazon seller’s monthly income.
Knowing the profitability of an item is an essential aspect of product research.
It can provide better foresight regarding investment costs and sales. It is a crucial administrative task to do before launching a product on Amazon.
What is the Amazon FBA Calculator?
The Amazon FBA calculator, also known as the Amazon revenue calculator, is a vital Amazon seller tool. It allows sellers to preview and compare product revenue estimates based on the fulfillment channel.
With the help of this FBA tool, sellers can quickly check which fees apply to each fulfillment option. Sellers will likewise have estimates of the potential total proceeds and per-unit sold.
What Are the Fees Included in the FBA Revenue Calculator?
The FBA calculator can help you determine if a particular product has huge earning potential. Using the free FBA calculator, sellers can have an estimate of the potential fees or expenses, including the following:
The Amazon referral fee is incurred for every item sellers sell on the marketplace. Amazon charges fees for each item based on the percentage of the total sale price. Typically, an Amazon referral is around 8% to 15%. But it could also go as high as 45% under the Amazon Device Accessories category.
Serving as a guide for new Amazon sellers, the total price of an item refers to the total amount that the Amazon shopper will pay. The referral fee depends on the selling price, delivery charges, gift wrapping charges, and product category.
FBA Fulfillment Fees
The FBA fulfillment fee – sometimes referred to as the “pick and pack” fee – refers to the per-unit fee charged by Amazon to fulfill items to customers. Similar to the referral fee, the fulfillment fee varies depending on:
– the item’s category
– product size tier
– dimensional weight
Monthly Storage Fees
Sellers who choose the FBA business model will have to consider the Amazon monthly inventory storage fees. This particular Amazon fee is for the space that products will occupy in Amazon’s fulfillment centers.
The monthly inventory storage fee is based on product size and the time of year. It means that storage fees will be relatively higher during peak shopping seasons. This typicall falls between October to December of each year.
Variable Closing Fees
The closing fees – or variable closing fees – are fees incurred for each unit sold. Hence, it is sometimes referred to by sellers as the per-item selling fee. In addition to the referral fees, Amazon sellers will also pay for closing fees of items listed under these categories:
- Software & Computer/Video Games
- Video Game Consoles
- Video Game Accessories
As of current writing, the closing fee for the items listed under the aforementioned categories is $1.80 per unit sold.
How to use the Amazon FBA Calculator
The ultimate goal of any Amazon seller is to generate profit by selling items on the Amazon marketplace. Therefore, knowing the profitability of an item is vital before building your Amazon inventory. To help you determine the profitability of an item, you can use the FBA revenue calculator.
To begin using the FBA calculator, you can search for a product that already exists on the Amazon marketplace. You can search either by keyword or ASIN. For items that do not yet exist on the Amazon marketplace, you can fill out the dimensions, unit weight, and category.
To locate the ASIN of an item, simply go to the product detail page and use the CTRL+F function to search for the term “ASIN.” The product ASINs are located below the product details section.
After obtaining the ASIN of a particular listing, you should click the “Search” button. You will be redirected to a page where you must enter the item price and shipping charge details.
The shipping price pertains to the cost of shipping your item to the Amazon warehouse.
Amazon suggests using an average cost for shipping to account for zone differences.
Note that you should only enter details required under the “Amazon fulfillment section.” This is necessary for sellers who want to know the profitability of their chosen product should they be using the FBA method.
To further narrow down the profitability of an item, you should also enter the cost estimates. The cost estimate refers to the cost of purchasing the product from a supplier or manufacturer.
Moreover, it also applies to the overall cost of producing a single item or unit. You can also include the other service add-ons you want Amazon to perform in the cost estimate section.
This can include FBA bagging and labeling service add-ons.
Once you have entered the details required, you can now press “Calculate”.
This allows the Amazon FBA calculator to provide you with a preview of the item’s profitability. Thus, giving a reference point for better and well-informed decision making.
Amazon Fees Not Included in the FBA Calculator
The profit margin of your Amazon business is not solely dependent on the information provided by the Amazon calculator.
It is worth noting that the FBA revenue calculator cannot provide or process fees, including but not limited to the following:
- Removal order
- Return processing
- Long-term storage
- Unplanned service
- High volume listing
- Rental book service
- Monthly subscription
- Refund administration
- FBA inventory storage overage
Amazon FBA Calculator By Marketplace
For Amazon sellers operating in global marketplaces outside the United States, you can check these FBA calculators by marketplaces or region for a better estimate.
Effective Amazon Product Research Tips
When conducting product research, it is not enough to only consider the profitability of an item. You should consider other factors if you wish to gain more ideas on items that are selling successfully on Amazon.
Almost anything is sold on Amazon.
It is very likely that an Amazon seller is already selling the product you wish to add to your inventory.
Hence, it is worth your time to conduct market research on your competitors.
This can quickly identify items that are already successful in the marketplace. Once you have identified a product, you should check some areas for improvements, including the product price.
To obtain a more competitive listing price, you can use the Amazon repricer AI to provide you with a competitive edge in the market.
Check the ‘Customers Also Bought’ and ‘Frequently Bought Together’ Sections
Amazon has a unique and powerful algorithm that quickly spots items frequently bought together. Such data can give you an insight into what products customers will likely buy after purchasing a particular item. You can create a unique product bundle that will encourage better customer engagement and purchases.
Check Trending Lists
Another avenue to get insight into what product would likely be profitable for your Amazon venture is the trending lists. You can also check platforms like eBay or Shopify for trending items in specific categories.
Amazon Product Research Tools
Another effective way of finding the best product for your Amazon business is employing an Amazon product research tool. There are many product research tools available online, both free and premium. With the help of a product research tool, you can get more information about the product and its market performance.
Product Research Services
In lieu of a product research tool, you may also hire a freelancer or product research service to perform the task for you. However, this can be expensive. This approach generally will cost you more than manual product research and product research software.
The Holistic Approach
The Amazon FBA calculator is a powerful tool for product research.
It can provide a clearer insight into an item’s profitability.
The potential business costs and expenses can be determined with the help of an FBA calculator.
However, knowing the profitability of an item does not guarantee that your Amazon business will be successful.
Becoming a profitable Amazon seller requires knowledge of other Amazon tools and services.
Some of the necessary Amazon tools and services sellers should be acquainted with include, but are not limited to:
– an Amazon repricer
– inventory management tools
– Amazon advertising and marketing services.
A holistic approach to your Amazon business will help increase your chances of success in this highly competitive eCommerce industry.
Junel Ayala is a writer at Seller Snap. Over the past years, he has been engaged in project management, SEO content writing, and local SEO marketing for various firms in the United States and Europe.