How to use the FBA calculator

Shipping through FBA has many benefits for sellers, including the ability to obtain the Prime badge and access to Prime members; the possibility of obtaining the Buy Box, fewer logistics delays that affect seller ratings, and better display of the seller's brand.

Since FBA has so many benefits, how is the fee calculated? FBA fees include fulfillment, monthly storage fees, and warehouse inventory placement service fees for each product. Sellers will need to pay fulfillment fees based on product size and weight. The fee standards are as follows:

The following is an example calculation:

If you are selling a set or group of products, then it can only be calculated as a single ASIN, but the larger package size will result in higher FBA fees.

If your products are in Amazon warehouses for too long, you may be charged long-term storage fees. Here are the latest details of Amazon’s long-term storage fees (you can click here for more detailed updates):

On the 15th of each month, Amazon FBA will clean up the inventory. If the seller's inventory has been stored in the Amazon logistics center in the United States for 181 to 365 days, the long-term storage fee (LTSF) will be $3.45 per cubic foot. Products that have been in the logistics center for more than 365 days will be charged a long-term storage fee of $6.9 per cubic foot.

*Note : Long-term storage fees are subject to change at any time, and the best way to stay informed of policy updates is to check the FBA fees page on Amazon.com.

Step 1: Calculate the total cost of each product

To determine if your product is a good candidate for FBA, you need to calculate the total cost of each product. Add up the following expenses, while also considering the costs of running your business:

1) Purchase cost:

Cost of purchasing inventory

The cost of shipping the product from the supplier to the designated location

The cost of shipping the product to an Amazon fulfillment center

2) Return-related costs

·transportation

·Package

·Price reduction promotion

3) As a seller, you need to make a list of the expenses required to run your business, including:

Operating costs

·Water and electricity costs

Employee wages + benefits

·Insurance

Business trip expenses

·Tax

Marketing expenses

Web Development

Warehousing

·Rent, etc.

Once you understand these costs and set the profit margin you want to achieve, you can know the total revenue for each product.

Step 2: Divide the total cost by the number of products

Once you've calculated the total cost of all of your individual products, divide that number by last year's sales volume to get the cost of each product.

Step 3: Enter your data into the Amazon Seller Fee Calculator in Seller Central

The Amazon FBA calculator is located in the "All Statements View" area. Enter the product you want to measure, then fill in the product price, the cost of sending to the Amazon warehouse, and the product cost, and then click to calculate:

Step 4: Decide Which Products Are Best for FBA Shipping

Once you have the data, ask yourself the following questions:

How much does each product cost in a month?

Does the fee paid exceed 30% of the product cost?

If you spread the cost across each product, can you still make money on that SKU?

For a large and heavy product priced at $10, FBA fees may account for a large portion of the cost, while the FBA fee ratio for a small and light product priced at $30 will be much smaller. Therefore, products with a relatively high average selling price are the first choice for FBA shipments. In addition, popular products that can be sold quickly are also very suitable for FBA shipments.

To achieve the best results, sellers should minimize returns and choose not to ship certain SKUs or products that are not profitable through FBA.