Fulfillment by Amazon (FBA) is a service that Amazon offers to business owners who want to sell products on the Amazon platform. Services included in the Amazon FBA program are picking, packing, and shipping, all of which Amazon handles instead of the seller. Due to factors inclusive within Amazon FBA, many online sellers find it more convenient to sell on Amazon as compared to other existing eCommerce platforms. To assist sellers in managing their Amazon FBA stores, the Seattle based company also provides a free Amazon FBA Calculator to help FBA sellers calculate Amazon fees. Knowing how to use the FBA calculator is crucial for any seller. Here is an explanation of how to use the Amazon FBA calculator.
Amazon Seller Central: A Screenshot of Amazon FBA Revenue Calculator, from https://amzn.to/2BON6Sy
This Amazon FBA revenue calculator provides sellers a better view of the costs involved in running an Amazon FBA store. Similarly, using the Amazon FBA Calculator at the onset of the business helps FBA sellers decide what products are worth launching in their Amazon store. That is why it is important for sellers to know how to use the FBA calculator.
Amazon FBA Fees Included in the FBA Calculator
Without the help of an Amazon FBA calculator, it would be difficult for Amazon FBA sellers to truly understand FBA costs and fees associated – the said fees are outlined below.
Selling on Amazon Fees
Amazon Seller Central: A Screenshot of Amazon FBA Revenue Calculator, from https://amzn.to/30ccESW
This particular Amazon fee is composed of two fees. Inclusive within the “Selling on Amazon Fees” are the referral fee and the variable closing fees. These fees are subtracted from the overall sale. Mastering how to use the Amazon FBA calculator will give you a better understanding of Amazon fees.
The Amazon referral fee is an interesting subject on its own, which is why we have a separate article discussing more of this particular topic. Click Here to Know More About Amazon Referral Fees.
However, as an overview, the FBA referral fee is a fee that Amazon charges FBA sellers every time they sell a product. The charge is percentage based and varies from one product category to another. Click Here to See All Category Referral Fees.
Variable Closing fee, on the other hand, is the fee that Amazon charges in addition to the Amazon referral fee. Such a fee is applied to items that are both under the media and non-media categories.
For the non-media category, the variable closing fee is calculated per item along with the item’s corresponding weight. Amazon products classified under the media category get a flat fee of $1.80.
Fulfillment By Amazon Fees
Similar to the Selling on Amazon Fees, the “Fulfillment By Amazon Fees” is composed of two components, a fulfillment fee, and a monthly storage fee.
The aforementioned fulfillment fee pertains to the charge per unit for the picking and packing of orders, as well as other duties that Amazon fulfills on the seller’s behalf. Such other duties may include but not limited to shipping and handling of product returns and customer service.
The monthly storage fee is a basic fee that FBA sellers have to pay in exchange for storing their inventory in Amazon fulfillment warehouses. Aside from the picking, packing, and shipping duties of Amazon for their FBA sellers, storage is also included.
This kind of fee is calculated based on the volume of the product (in cubic feet), and may likely vary depending on the size tier of the product as well as the time of the year.
October to December is considered as peak months for Amazon, which is why storage fees are higher during those months as observed by sellers.
When to Use the FBA Revenue Calculator
Amazon FBA calculator is used mostly by top Amazon sellers to do product research. This is the best time to take advantage of this free Amazon seller tool.
Alternatively, the Amazon FBA calculator is also used by top Amazon sellers when it comes to repricing. The FBA revenue calculator provides insights for them to raise or lower the sale price of their products.
As a complementary tool to that of an Amazon repricer, the FBA calculator provides Amazon sellers with a clear picture of the profit margin impacts. Hence, giving sellers ideas on what product cost budget range they should follow to remain profitable.
How to Use FBA Revenue Calculator
After being introduced to the purpose of the Amazon FBA calculator and the fees involved in an FBA transaction, here are some tips on how to utilize the FBA calculator for product research and checking of margin impact.
Let’s start by using this alarm clock as the Amazon product example.
Amazon Store: A Screenshot of Amazon Store Product, from https://amzn.to/33cjkT5
STEP 1:
To start using the FBA calculator for product research, you can use any of the search terms (e.g. round clock, wooden clock, round wooden alarm clock) associated with the product or even its ASIN, EAN, ISBN.
To make things easier for new sellers, we will use the ASIN for this example. New sellers can easily check the ASIN in the product information section still found on the product listing page.
Amazon Store: A Screenshot of Amazon Store Product Information, from https://amzn.to/33cjkT5
Once found, simply copy and paste the ASIN to the FBA CALCULATOR SEARCH BAR and CLICK SEARCH.
Amazon Seller Central: A Screenshot of FBA Revenue Calculator Search Bar, from https://amzn.to/2DnPIaa
STEP 2:
Now that the product corresponding to the inputted ASIN is on display, sellers may begin placing the values in the Amazon fulfillment column. By doing so, the seller will determine the potential margin for this particular alarm clock.
Amazon Seller Central: A Screenshot of FBA Revenue Calculator Product Search Result, from https://amzn.to/2XdXR8y
To get a sense of the price range for the chosen product, the seller may also search other Amazon stores or listings selling similar items. Apart from searching Amazon for a similar product, the seller may also check on the suggested products just below the listing.
Amazon Store: A Screenshot of Amazon Similar Product Suggestions, from https://amzn.to/33cjkT5
Assuming that the seller is interested in becoming an FBA seller or already an FBA seller, be sure to only focus on “Amazon Fulfillment.” In the box provided, input the desired item price.
For this example, we will input $20.00 as its sale price or the item price.
Amazon Seller Central: A Screenshot of Amazon FBA Revenue Calculator, from https://amzn.to/2BOrh5y
STEP 3:
After inputting the value for the item price, the seller will then have to input the value for “Ship to Amazon” under the Fulfillment cost. The said input box represents the average per-unit price of an item a seller is planning to sell.
However, if the seller is not familiar with the average per-unit price, they may leave the field blank. For this example, we will assume that the shipping cost would be $0.40 per unit of the alarm clock.
Amazon Seller Central: A Screenshot of Amazon FBA Revenue Calculator, from https://amzn.to/2BOrh5y
To help sellers determine which fee will apply per unit, CLICK HERE.
STEP 4:
After the “Selling on Amazon Fees”, sellers should then fill in the “Cost of Product field.” This is a critical field to be completed, for this pertains to the “all-in cost” of the item sellers will be selling on Amazon.
The “Cost of Product” field simply pertains to the overall cost of purchasing the item from the wholesaler or manufacturer. It is “all in” in a sense because other expenses such as packaging materials, overseas shipping, and customs fee will be included in the computation.
And for this example, let just say that a manufacturer in China sells the alarm clock per unit for only $4.00 (inclusive of other purchasing expenses). After inputting the value, the seller can now click the “Calculate” button.
Amazon Seller Central: A Screenshot of Amazon FBA Revenue Calculator, from https://amzn.to/2BOrh5y
FBA Calculator Information Display
After clicking the Calculate Button, the FBA calculator will display data about the product. Such data is based on the values that the seller has just inputted. The main highlight of the result includes the net profit and net margin for the item being scouted.
Similarly, the Amazon FBA revenue calculator also showcases bar graphs on the right portion of the result, giving sellers a clear visual representation of the net profit, seller proceeds, cost, and revenue for the chosen item.
Amazon Seller Central: A Screenshot of Amazon FBA Revenue Calculator, from https://amzn.to/2D87eiZ
How to Use the FBA Calculator to Understand Margin Impact
With the help of the Amazon FBA calculator, sellers will have a clearer overview of the margin impact. Sellers can explore the revenue calculator and see how long until their business becomes profitable.
Amazon Seller Central: A Screenshot of Amazon FBA Revenue Calculator, from https://amzn.to/2D87eiZ
As an example, sellers may change the customer item price and check whether net profit will improve. As seen in the image above, the item price has been changed to $30.00 and as observed on the recalculated output, net profit drastically increased.
Reasons Why an Amazon FBA Calculator Alone Is Not Enough
Although the Amazon FBA calculator offers specific benefits to Amazon sellers, especially the newbie sellers, there are things that this internal calculator is incapable of performing. The free Amazon calculator is mainly used by experienced sellers for pre-selling guesstimation.
Here are some of the reasons why Amazon sellers should consider tapping the calculating power of third-party Amazon calculators.
Tedious & Time-Consuming Process
Amazon sellers using the free FBA calculator can easily attest to the tedious process involved in using the free calculator. For sellers to know the Amazon fees for a particular item, sellers have to manually enter the product name, Amazon Standard Identification Number (ASIN), or even the Universal Product Code (UPC).
No Save Function
In relation to the preceding paragraph, another reason why sellers should also consider using an external FBA calculator along with the free FBA calculator is the latter’s lack of save function.
After all the effort and time allocated for crunching FBA fees of a specific item, sellers will have to re-do such a process if they want to recheck it afterward. Since there is no save function, when faced with technical issues, such as browser problems, power outages, or website crashes, sellers will also have to redo the process to retrieve results.
No Data Export Feature
As well as the no save function, the free FBA calculator also lacks the data export feature. This simply means that whatever is displayed or calculated via a free calculator cannot be downloaded either as a CSV or PDF file.
Some sellers resort to writing down the result of a particular calculation result in order to compare it with another result of a separate Amazon product. And if a seller lacks that technical knowledge such as using keyboard shortcuts, such a process would be more taxing.
Comparison Difficulty
As previously mentioned, since data cannot be downloaded and split tabulation is unavailable, simultaneous data comparison is also not possible with Amazon’s free calculator.
Some Amazon sellers take advantage of third-party Amazon FBA calculators to enjoy important features like data comparison. Such a feature will ultimately result in increased productivity and sales.
No Additional Cost Perspective
Since the FBA calculator of Amazon is mainly focused on Amazon fees, other critical costs or expenses involved in the business are not included in the free calculator.
Expenses such as advertising costs, taxes, marketing costs, overhead costs, and other hidden expenses are beyond the scope of the free FBA calculator. Hence, necessitating the use of a more comprehensive FBA calculator.
The ones mentioned above are some of the reasons why Amazon sellers should consider complementing their use of the free Amazon FBA calculator with third-party FBA calculators. There are many options available online that sellers can take advantage of, some of which are even capable of cross-platform operation.
Additionally, some Amazon seller tools provide their own free FBA calculator once you are already enrolled in a specific program. Thus, making it more convenient for sellers to combine processes and solutions within just one platform.
If you wish to know your options when it comes to external FBA calculators, you may CLICK HERE!
Appraising Your Options
When it comes to achieving success on Amazon, the use of Amazon seller tools like the FBA calculator are very helpful, especially for product research. In terms of pricing strategy, using a repricer such as Seller Snap will also help lead to positive results.
Similarly, improving your ability to create a professionally done product listing may increase your chances of appearing in organic searches. Given such a necessity, mastery of Amazon SEO is critical.
Always remember to reevaluate your options when it comes to your Amazon venture. Never forget that selling on Amazon requires not just one method or singular tool. Diversify your options as well as your business strategy for the increased overall success of your Amazon business.
