Amazon FBA Profit Calculator: Why My Spreadsheet Wasn't Enough

Before RedHen Labs, I kept my profit in a spreadsheet: price, cost of goods, Amazon’s fees, a formula at the bottom. It was not pleasant. Every number in it was right on the day I typed it, and the business didn’t stay on that day.

A calculator is still the right first step. Run a product’s price and costs through one and you know what a sale is worth today. The trouble is everything that moves after.

Amazon’s fees move

My cutting board gel paid Amazon about $4.35 a unit for fulfillment from May through September. In mid-October it went to $4.64. My other best sellers went up at the same time: my Refined Walnut Oil and Cutting Board Wax from $4.35 to $4.64 a unit, my two hard wax oils from $4.76 to $5.06.

I read Amazon’s email about it. I try not to think about their fees too much. That’s the honest reason a spreadsheet goes stale: nobody wants to re-type Amazon’s fee table every time it changes.

The costs Amazon bills to the account, not the sale

Some of what Amazon charges isn’t per unit at all. It arrives per shipment or once a month. From May through October, on my US account:

• $1,681 to ship inventory into Amazon
• $626 in an inbound fee Amazon’s records call a “convenience” fee
• $267 in storage
• $256 to dispose of inventory
• $170 in Amazon’s monthly subscription
• $113 in Vine fees
• $67 in coupon fees

Against that, Amazon paid back about $525 in reimbursements. A calculator can hold a per-unit guess at shipping and storage (ours has a field for each), but the real bills come per shipment or per month, and the rest has no field at all. Together: about $3,200 in six months.

Orders I ship myself

Some orders I ship myself, and I buy the labels through Amazon: about $200 a month since August, and $390 in June. A spreadsheet only knows the shipping number you gave it. As of this week, RedHen Labs counts what Amazon actually billed for those labels instead.

Returns

The usual warning is that returns eat a big share of revenue. On my three best sellers, refunds stayed under 2% of units from May through October, and I haven’t really had return issues. That’s worth knowing too: a profit model built on someone else’s return rate would have taken margin off products that don’t need it.

How I’d fill in a calculator today

1. Take the fulfillment fee from your latest orders, not from a chart you saved in the spring.
2. Work out inbound shipping per unit: your last few inbound shipping bills divided by the units in those shipments.
3. Do the same for storage, from Amazon’s monthly storage charge.
4. Use your own return rate, product by product.
5. Run it again every time Amazon emails you about fees.

What I use now

RedHen Labs takes each order’s fees from what Amazon actually charged (Amazon’s own estimate until the charge posts), shows the account-level costs as their own lines, and works out profit after ads for each product. Product costs go in once; when one changes, you give the date it changed, so last month’s profit stays last month’s.

A calculator tells you what a sale is worth today. RedHen Labs keeps the answer current.