Amazon FBA
Amazon FBA Profit Margin Guide
Amazon FBA margin is shaped by more than product cost. Referral fees, fulfillment fees, storage fees, returns, coupons, inbound shipping, prep cost and PPC can each reduce contribution profit. A product with a strong gross margin can become weak once all Amazon-specific costs are included.
Contribution margin formula
Start with selling price minus referral fee, FBA fee, product cost, prep, storage allowance and expected returns. Then subtract advertising cost per sale. This gives contribution profit per unit before tax and fixed overhead.
Why size tier matters
Small changes in package size or weight can move a product into a different fulfillment cost range. Before ordering inventory, test packaging dimensions and run a conservative fee scenario.
Practical benchmark
Many new sellers should avoid products that only work at perfect PPC performance. Leave room for launch discounts, returns and ranking campaigns.