What is a good profit margin on Amazon?

Most experienced FBA sellers target 25–35% net margin after all fees, with anything below 15% considered risky once you factor in returns, PPC, and seasonal storage spikes. Premium private label brands sometimes hold 40%+ margins, while high-volume commodity products often run thinner at 15–20% but make up for it on velocity.

How far above break-even should I price?

A common rule of thumb is 25–40% above break-even. That gives you room to fund PPC during a launch, absorb returns, cover long-term storage fees, and still hit a healthy 20–30% net margin. Anything less than ~15% above break-even leaves almost no margin for error.

Should PPC be included?

Yes — if you plan to run ads, include your average PPC cost per sale in the Advertising field. Ignoring it means your calculated break-even is artificially low; once ads turn on, your real break-even shifts up by your per-unit ad spend (often $1–$3 during launch).

How do FBA fees affect break-even?

FBA fulfillment and storage fees are flat per-unit costs, so they raise break-even dollar-for-dollar. The referral fee is a percentage, so it raises break-even by the formula (cost ÷ (1 − rate)) — at a 15% referral rate, every $1 of product cost actually adds about $1.18 to break-even, not just $1.

Does this include Amazon's monthly Professional plan fee?

No — the $39.99/month Professional plan is a fixed monthly cost spread across all units sold, not a per-unit fee. If you sell 200 units a month, that's $0.20 per unit, which you can add into the Storage field for a more accurate break-even.

Amazon FBA Break-Even Calculator

Your break-even price is the minimum you can charge on Amazon and still walk away with $0 — not a loss. It's the floor. Anything below it loses money once Amazon takes its referral fee, FBA fulfillment fee, and storage cost. Tip: most experienced FBA sellers price 25–40% above break-even to leave room for PPC, returns, and storage spikes during Q4.

Last Updated: June 2026

Reviewed for current Amazon FBA referral and fulfillment fees.

Product cost ($)

Inbound shipping ($)

Packaging cost ($)

Amazon referral fee (%)

Most categories are 15%; range is 8–20%.

FBA fulfillment fee ($)

Per unit, based on size/weight. Confirm in Seller Central.

Monthly storage cost per unit ($)

Advertising (optional)

Advertising cost per sale ($)

Average PPC spend per unit sold.

Break-even price

$17.27

Minimum to cover all costs

Total product costs

$9.50

Cost $8.00 + ship $1.00 + pack $0.50

Total Amazon fees

$7.77

Referral $2.59 + FBA $4.98 + storage $0.20

Profit at break-even

$0.00 · 0%

By definition — price above to profit

Cost breakdown

Product cost: $8.00
Inbound shipping: $1.00
Packaging: $0.50
Advertising / PPC: $0.00
Referral fee (15%): $2.59
FBA fulfillment fee: $4.98
Monthly storage: $0.20
Total costs at break-even: $17.27

Formula

Total product costs = Product cost + Inbound shipping + Packaging + Advertising per sale · Non-referral Amazon fees = FBA fulfillment fee + Monthly storage per unit · Break-even price = (Total product costs + Non-referral fees) ÷ (1 − Referral %) · Referral fee at break-even = max(0.30, Break-even × Referral %) · Profit at break-even = $0 · Margin at break-even = 0%

Worked example

Product cost $8, inbound shipping $1, packaging $0.50, referral fee 15%, FBA fee $4.98, storage $0.20/unit, no ads.

Total product costs: 8 + 1 + 0.50 = $9.50
Non-referral Amazon fees: 4.98 + 0.20 = $5.18
Fixed costs to recover: 9.50 + 5.18 = $14.68
Break-even price: 14.68 ÷ (1 − 0.15) = 14.68 ÷ 0.85 ≈ $17.27
Referral fee at that price: 17.27 × 0.15 ≈ $2.59
Check: 17.27 − 9.50 − 5.18 − 2.59 ≈ $0.00 profit
Margin at break-even: 0%

Answer: $17.27 minimum price · $0 profit · 0% margin at break-even

How it works

Break-even isn't a target — it's a floor. Because Amazon's referral fee is a percentage of the selling price, raising your price also raises one of your costs, which is why you can't just add fees and product cost together. The formula divides your fixed costs by (1 − referral rate) to back into the price where everything lines up at zero.

Why Amazon sellers need this number: it's the fastest sanity check before you source a product. If your supplier's quote plus shipping pushes break-even above the prices competitors are already charging, the product won't work — no amount of optimization will save it. It's also the baseline for setting promotional discounts: if your everyday price is $24.99 and your break-even is $17.27, the deepest coupon you can run without losing money is about 30% off.

How to price above break-even: most FBA sellers add a target margin (often 25–35%) on top of break-even, then test from there. So a $17.27 break-even product might list at around $22–$26 to give room for PPC, returns reserves, and the long-term storage fees that hit aged inventory in Q4.

Common mistakes

Treating break-even as your target price instead of your floor — pricing at break-even guarantees zero profit.
Forgetting that the referral fee scales with the price, so adding up costs without solving for it underestimates break-even.
Leaving PPC out — most FBA products need ads, and ignoring them means your real break-even is higher than the number on the page.
Using the off-peak storage rate year-round; Oct–Dec storage can be 2–3× higher and pushes break-even up.
Ignoring returns — even healthy products see 3–7% return rates, which effectively raises per-unit cost.

Go deeper with plain-English guides on the same topic.

FAQ

What is a good profit margin on Amazon?: Most experienced FBA sellers target 25–35% net margin after all fees, with anything below 15% considered risky once you factor in returns, PPC, and seasonal storage spikes. Premium private label brands sometimes hold 40%+ margins, while high-volume commodity products often run thinner at 15–20% but make up for it on velocity.
How far above break-even should I price?: A common rule of thumb is 25–40% above break-even. That gives you room to fund PPC during a launch, absorb returns, cover long-term storage fees, and still hit a healthy 20–30% net margin. Anything less than ~15% above break-even leaves almost no margin for error.
Should PPC be included?: Yes — if you plan to run ads, include your average PPC cost per sale in the Advertising field. Ignoring it means your calculated break-even is artificially low; once ads turn on, your real break-even shifts up by your per-unit ad spend (often $1–$3 during launch).
How do FBA fees affect break-even?: FBA fulfillment and storage fees are flat per-unit costs, so they raise break-even dollar-for-dollar. The referral fee is a percentage, so it raises break-even by the formula (cost ÷ (1 − rate)) — at a 15% referral rate, every $1 of product cost actually adds about $1.18 to break-even, not just $1.
Does this include Amazon's monthly Professional plan fee?: No — the $39.99/month Professional plan is a fixed monthly cost spread across all units sold, not a per-unit fee. If you sell 200 units a month, that's $0.20 per unit, which you can add into the Storage field for a more accurate break-even.

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Formula

Worked example

How it works

Common mistakes

Related Guides

FAQ

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