What's a healthy net margin on Amazon FBA?

25–35% after every fee, COGS, freight, and ad allocation. Below 20% there's no cushion for returns or a soft month.

How do I allocate storage and ad costs per unit?

Divide monthly storage by units sold that month for storage per unit. For ads, divide monthly ad spend by units sold attributable to ads, or use your campaign ACoS × price.

What ROI should I target per unit?

Most sellers want 30%+ ROI on the cash they invest per unit (COGS + freight + prep). Below that, capital is better deployed elsewhere.

Why does revenue look high but my payout is small?

Referral + fulfillment alone are usually 30%+ of sale price, before COGS, ads, and storage. Always run net profit per unit — never judge a product by revenue.

How To Calculate Amazon FBA Profit

Most sellers can quote their revenue. Far fewer can quote their profit — and that gap is where businesses bleed out. This guide walks through every cost line, the core FBA profit formulas, and three worked examples so you know exactly what you keep per unit.

Revenue vs. profit

Revenue is what customers pay you. Profit is what's left after every fee, COGS, freight, prep, storage, advertising, and returns. A $25 sale can leave $6 — or a loss — depending on how thin the math is. Revenue tells you how busy you are; profit tells you whether you have a business.

The core profit formulas

Net Profit (per unit) = Sale Price − Referral Fee − FBA Fulfillment + Fuel Surcharge − COGS − Inbound Shipping − Prep − Storage Allocation − Ad Allocation − Returns Reserve.

Net Margin = Net Profit ÷ Sale Price. ROI = Net Profit ÷ Cash Invested per Unit (COGS + freight + prep).

Every cost line, explained

Referral fee (~15%) applies to price + shipping you charge. FBA fulfillment is per-unit by size tier, +3.5% fuel surcharge from April 2026. Inbound shipping/freight and prep are real per-unit costs. Storage and ad allocation are monthly costs divided across units sold. Returns reserve: set aside a small % based on your category's return rate.

Worked example: private label

Sale price $29.99 → referral $4.50 + fulfillment $5.45 + fuel $0.19 + COGS $4.00 + freight $0.80 + storage $0.20 + ads $4.50 + returns reserve $0.30 = $19.94 total cost. Net profit ≈ $10.05, margin ≈ 33.5%, ROI ≈ 209% on the $4.80 cash invested per unit.

Worked example: wholesale

Sale price $39.99, COGS $20, no inbound freight on small orders. Fees ≈ $11, ads $3, prep $0.40 → net profit ≈ $5.59, margin ≈ 14%, ROI ≈ 28%. Lower margin than private label but faster inventory turns and no product development risk.

Worked example: retail arbitrage

Sourced for $8 at clearance, sold at $24.99. Fees ≈ $8, prep $0.40, ads $0 → net profit ≈ $8.50, margin ≈ 34%, ROI ≈ 100%+. Excellent unit economics but doesn't scale — every restock requires fresh sourcing.

Mistakes that sink profitable products

Forgetting the fuel surcharge, ignoring inbound freight, no storage allocation, treating ads as marketing rather than cost, not setting a returns reserve, and pricing off the supplier invoice. Build every cost in before you commit.

Frequently asked questions

What's a healthy net margin on Amazon FBA?: 25–35% after every fee, COGS, freight, and ad allocation. Below 20% there's no cushion for returns or a soft month.
How do I allocate storage and ad costs per unit?: Divide monthly storage by units sold that month for storage per unit. For ads, divide monthly ad spend by units sold attributable to ads, or use your campaign ACoS × price.
What ROI should I target per unit?: Most sellers want 30%+ ROI on the cash they invest per unit (COGS + freight + prep). Below that, capital is better deployed elsewhere.
Why does revenue look high but my payout is small?: Referral + fulfillment alone are usually 30%+ of sale price, before COGS, ads, and storage. Always run net profit per unit — never judge a product by revenue.

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