Amazon FBA profitability: what you really make per product
How much do you really make on each product you sell on Amazon? Start from sales, take out returns, every Amazon fee, advertising and what the product cost you. What is left is your contribution margin. This guide gives you the full cascade, the formulas and a worked example.
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How much do you really make per product on Amazon?
Your real result per product is net sales (gross sales minus returns) minus the referral fee, FBA fulfilment, storage, other Amazon fees, advertising and the product cost. What remains is your contribution margin, before overheads and taxes. If any of those lines is missing, the number you see is higher than the truth.
From sales to margin, line by line
Nine lines take you from what shoppers paid to what each sale leaves in your pocket. Rates differ by category, size and date, so for any figure check the official Amazon fee schedule for your marketplace.
The four formulas you need
Calculate them per product and per marketplace. An account average hides the products that lose money.
Contribution margin
Net sales − Amazon fees − advertising − product cost What each sale leaves after paying the channel, the ads and the product, in euros. It is not what remains after rent, salaries, tools or taxes.
Margin over net sales
Contribution margin ÷ net sales × 100 Lets you compare a €5 product with a €50 one. Use net sales, after returns, as the base, not gross sales.
Breakeven ACoS
Margin before advertising ÷ price × 100 The most you can spend on ads per euro of sale before that sale earns nothing. A target ACoS above this point loses money on every advertised sale, however good the ads dashboard looks.
ACoS and TACoS
ACoS = ad spend ÷ ad sales · TACoS = ad spend ÷ gross sales ACoS judges a campaign, TACoS shows the weight of advertising in the whole business. Neither tells you the profit by itself, so compare them with your breakeven. See how to track them in Amazon Ads analytics.
One product, every line added up
Illustrative example 100 units sold in a month at €20.00 each, VAT excluded. 5 units are returned and cannot be resold. Product cost is €6.00 per unit. The amounts are invented to show the arithmetic, they are not Amazon rates.
| Line | Amount | % of net sales |
|---|---|---|
| Gross sales | €2,000.00 | 105.3% |
| Returns and refunds | −€100.00 | −5.3% |
| Net sales | €1,900.00 | 100.0% |
| Amazon fees | −€710.00 | −37.4% |
| Referral fee | −€285.00 | −15.0% |
| FBA fulfilment fee | −€380.00 | −20.0% |
| Storage | −€30.00 | −1.6% |
| Other fees | −€15.00 | −0.8% |
| Income after fees | €1,190.00 | 62.6% |
| Advertising | −€238.00 | −12.5% |
| Sponsored Products | −€180.00 | −9.5% |
| Sponsored Brands | −€40.00 | −2.1% |
| Sponsored Display | −€18.00 | −0.9% |
| Product cost | −€600.00 | −31.6% |
| Contribution margin | €352.00 | 18.5% |
The same example as a waterfall
- Gross sales €2,000.00
- Returns −€100.00
- Net sales €1,900.00
- Amazon fees −€710.00
- After fees €1,190.00
- Advertising −€238.00
- Product cost −€600.00
- Contribution margin €352.00
Read the result
- Margin before advertising
- €590.00€5.90 per unit
- Breakeven ACoS
- 29.5%€590.00 ÷ €2,000.00
- ACoS in this example
- 17.5%€238.00 ÷ €1,360.00 of ad sales
- TACoS
- 11.9%€238.00 ÷ €2,000.00 of gross sales
- Margin per unit sold
- €3.52€352.00 ÷ 100 units
Ads run at 17.5% ACoS, below the 29.5% breakeven, so each advertised sale still earns money. At a 35% ACoS the same €20.00 sale would cost €7.00 in ads against €5.90 of margin before advertising: a loss of €1.10 on every advertised sale. And if the product cost line were empty, this month would show a 50.1% margin instead of 18.5%.
Six ways Amazon numbers flatter you
These are the reasons a margin looks better, or worse, than it really is.
The same cascade, calculated for you
The Profitability section of Epinium connects Seller Central or Vendor Central and Amazon Ads, and builds this cascade for every product and marketplace, with advertising split by campaign type: Sponsored Products, Sponsored Brands and Sponsored Display. Amazon does not know your product cost, so you add it once with a date and the margin recalculates.
P&L waterfall
From gross sales to contribution margin for any period, country and connection, with the previous period for comparison.
Margin by product
One row per product and marketplace, with a cost coverage column that shows which products still have no cost.
Product cost with a valid-from date
Enter it product by product or import a file. A past date recalculates from that day, and earlier sales keep the cost they had.
What each plan shows
Guru shows everything up to advertising, with the last line called What's left. Business adds product cost, contribution margin, margin over net sales and cost coverage.
See the full profitability page →
Epinium starts with Amazon here, and more channels are on the way. Product cost and contribution margin come with the Business plan.
A decision tool, not your accountant
Epinium does not replace your accountant and does not do bookkeeping. It tells you which products earn money and which do not.
No VAT and no taxes
Contribution margin is calculated before VAT, income tax and any other tax.
No overheads
Salaries, office, tools and other indirect costs are not part of the calculation.
Your accountant keeps the books
Use Epinium to decide which products to push, reprice or drop. Use your accountant for the accounts.
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Head eCommerce, BANDAI Entertainment Europe
Know what you really make on every product.
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ExploreFrequently asked questions
How do you calculate profit per product on Amazon FBA?
Start from net sales (gross sales minus returns) and subtract the referral fee, the FBA fulfilment fee, storage, other Amazon fees, advertising and the product cost. The result is the contribution margin, what each sale leaves before overheads and taxes. Divide it by net sales to get the margin percentage. Do it per product and marketplace, because an account average hides the products that lose money.
What is a good margin on Amazon FBA?
There is no universal number. It depends on category, price, how much you rely on advertising and your overheads. A more useful test is whether the contribution margin covers your overheads and taxes with something left over, and whether your advertising stays below the breakeven ACoS of each product.
What is breakeven ACoS and how do you calculate it?
Breakeven ACoS is the ACoS at which an advertised sale earns exactly zero. Calculate it as the margin before advertising divided by the selling price, as a percentage. In the example on this page it is €590.00 ÷ €2,000.00 = 29.5%. A target ACoS above that point loses money on every advertised sale. A launch campaign can knowingly run above it to win ranking, but then you should know by how much.
What is the difference between ACoS and TACoS?
ACoS is ad spend divided by the sales attributed to those ads, so it judges a campaign. TACoS is ad spend divided by total sales, so it shows how much weight advertising has in the whole business. Epinium calculates TACoS on gross sales. Neither tells you the profit by itself: you need the margin to know whether a given ACoS is affordable.
What fees does Amazon charge FBA sellers?
The main ones are the referral fee (a percentage of the sale price that varies by category), the FBA fulfilment fee (per unit, by size and weight), storage fees and other service charges. Advertising is billed separately through Amazon Ads. Rates change by category, size and date, so check Amazon's official fee schedule for your marketplace.
Why does my Amazon margin look higher than it really is?
The usual causes are a missing product cost, a month that is still in progress because Amazon publishes some charges with a delay, storage that lands on one day in a daily view, returns not taken out of sales and advertising that is not tied to any product. Check how much of your sales has a cost before trusting a margin.
How does Epinium know my product cost?
It cannot, because Amazon does not know it. You add it yourself, either product by product from its sheet or by importing a file (.csv, .txt, .xlsx, .xlsm or .xls) with a downloadable template. Every cost has a valid-from date: a past date recalculates the P&L from that day and earlier sales keep the cost they had. Product cost and contribution margin are part of the Business plan.
Does Epinium replace my accountant or do bookkeeping?
No. Epinium shows the contribution margin of each product and marketplace so you can make decisions. It does not include VAT, taxes or overheads, and it does not keep your books. Your accountant remains the one who does that.