Editor's Note: Our site, www.palletfly.com, uses this calculator for most of the Amazon Reseller Deals that we post. Please feel free to visit our site and join our network.
In this article we will be providing you a step by step guide on how to use the Fulfillment by Amazon Revenue Calculator or as it’s been dubbed in the reseller community The “FBA Calculator”. Here is a link to the calculator. Linky>
What is The Fulfillment by Amazon Revenue Calculator?
The Amazon Profitability Calculator is a free tool that Amazon provides for it’s 3rd party seller network to calculate how much money they should expect to NET when selling any given item in the amazon catalog.
How does The Fulfillment by Amazon Revenue Calculator work?
Amazon uses a particular piece of information to find the correct listing. (We will go through the steps later on in this post). Once the correct listing is located, the calculator breaks down all the fees based on the item information that it is pulling from it’s product page.
We will now go through each field and explain what it is:
Below is a snapshot of The Fulfillment by Amazon Revenue Calculator as it will appear when you put in an item. There are 2 columns. The first is for when you ship the item yourself, the second is for when Amazon fulfills the item (FBA)
- Item Price: This is the price charged to the buyer for the item. Amazon adds the item price and shipping price when assessing which offer from multiple sellers is the most competitive.
- Shipping: This is the price charged to the buyer for shipping. For Seller Fulfilled orders, the seller collects this amount as revenue for the order. For FBA orders, this amount is always assumed to be zero when offers compete, the actual cost the buyer depends on their selected shipping service level - the seller does not collect this revenue and their FBA fulfillment fees do not change. FBA listings always compete on Amazon assuming $0 for the buyers shipping cost.
- Amazon Referral Fee: The cost of selling an item through Amazon’s marketplace. Essentially, the are referring their customers to your items. Amazon charges different percentages on different categories, so be sure to check this before trying to calculate it on your own.
- Variable Closing Fee: Amazon sometimes charges a closing fee when you make a sale.
- Order Handling: Some operations have a flat cost per order for fulfillment. If you have a fixed cost for all items, you can input that here. The calculator will calculate this for the FBA column on it’s own.
- Pick & Pack: This is the cost to physically retrieve the item, pack it and the packaging material used for the shipment. You may estimate this by considering the cost of labor and the number of orders a person can process/hour, divided by their hourly cost. The calculator will calculate this for the FBA column on it’s own.
- Outbound Shipping: This is the postal, carrier or manifest cost of shipping the item to your customer. You may need to use an average to account for zone differences and service levels. FBA fees remain the same, regardless of the shipping method selected by the buyer. The calculator will calculate this for the FBA column on it’s own.
- Weight Handling: This fee is the weight based shipping fee for Fulfillment by Amazon orders. This fee is calculated based on the weight of the item. For large-screen television units including plasma, LCD, projection, and CRT, this will include a Special Handling fee of $50 per unit. The Special Handling fee will apply to TVs with screens 42" or larger, as well as certain smaller televisions (based on other factors such as weight and how delicate the TV is).
- Monthly Storage: This is the monthly inventory-storage fee you would pay for storing a single unit of this product in a fulfillment center this month. FBA charges by the cubic volume of the item in feet for time it's in a fulfillment center. Inventory-storage fees can vary by month.
- Inbound Shipping: This is the postal, carrier or manifest shipping cost to get the item to your fulfillment warehouse. With FBA you can choose to ship items from your facility, or direct from your distributor or vendor if the items and shipments adhere to our labeling, prep, and delivery requirements.
- Customer Service: This is the per item or order loaded cost of customer service and returns processing. Customer service and returns processing are included in the cost of FBA.
- Prep Service: This is the per item cost to prepare it for shipping or use with FBA (for example, if you must label each item or shrink wrap them you may want to include that cost here).
- Fulfillment Cost Subtotal: This is the total cost of shipping the item.
- Cost Subtotal: This is the total cost including shipping and fees.
- Margin Impact: This is the difference in the NET proceeds that you will get when selling with self-fulfillment or selling with amazon FBA.
How to use the Fulfillment by Amazon Revenue Calculator:
Now we will show you a step by step tutorial on how to use the Fulfillment by Amazon Revenue Calculator.
Step 1. Type in some information about the item you are selling. Here are some useful ones that you may use:
- Search terms (not so accurate)
- UPC
- ASIN (Learn more on how to get this quickly. Linky>
Step 2. Next hit the search button and locate the item from the list that pops up.
Once you select the correct item, the item will be loaded on the page as such:
Step 3: Enter the price you expect to sell this at (usually the buy box price. See this article for more details about buy box. Linky>). If you are self-fulfilling, don’t forget to enter your average shipping & prep cost.
Complete! You are now done checking the NET for this item!
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Stay tuned for our next article and hit the comments if you need help with something that we haven’t covered.
