Struggling to figure out the amazon fba fees calculator – am I missing something?

Marketing
1

After reading the introduction post from @jordysg I've gone right down the FBA rabbit hole over the weekend! I’ve been looking at the amazon fba fees calculator tool and I’m a bit confused. Numbers keep changing depending on weight/dimensions and I can’t tell if I’m overestimating or underestimating what I’d actually take home.

Not sure if I'll have the time to devote to it but I’m just trying to do some test runs with small lifestyle products (stuff like eco mugs, maybe planners) but when I put in costs it feels like the margin disappears. Am I using it wrong? Or do people just accept crazy slim margins and make up for it in volume?

Would love if someone could break this down in plain English 🙏

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Hey @olivias .. happy to jump in here and offer what advice I can.

First up, don’t worry, you’re not alone! The FBA fee calculator trips up plenty of folks early on. It looks neat on the surface, but there’s more underneath. I'll try to unpack it based on how I’ve been running my home & kitchen line.

What the calculator actually tells you

It’s basically spitting out two key costs:

Fulfillment fees (picking, packing, shippiong). These go up if your product is bulky or heavier.

&

Storage fees. Doesn’t sound like much month to month, but if stock lingers in Amazon’s warehouse, it bites you.

That’s before your own landed cost (manufacturing + shipping into Amazon) and advertising. The calculator won’t remind you of those.

How I approach it step by step

  1. Run a baseline: Throw in the product dimensions/weight as accurately as possible. Don’t guess. Measure a boxed sample and round up, Amazon rounds against you.

  2. Add hidden bits: I manually tack on 20-25% of my sales price to cover ads + returns. So if the calculator says I’d clear $6, I write it down as $4.50. Keeps me sane.

  3. Check tiers: Products just over a size/weight break are killers. I once had a spatula that was 0.1 cm too long and it bumped me into a higher fee bracket. Trimming the packaging saved me $1.30 per unit, no joke.

  4. Think volume vs. margin: Low margin, high volume can work, but only if you’re confident in sales velocity. As a beginner, safer to start with something that nets you 30-35% after fees.

A recent example of mine:

I sell a set of kitchen clips. Landed cost is $2.10. Amazon fees + fulfillment around $5. Ads chew $2. Net profit = ~$3. On a $12.99 selling price, that’s about 23%. Not amazing, but consistent. Because clips move fast, I can reorder monthly and keep cash flowing.

On the flip side, I tested an insulated jug. Looked cool, but after the FBA calculator, oversized fees, and slow sales, I was down to 5% margin. I dropped it.


Finishing up, don’t just play with the calculator. Build a spreadsheet with: Landed cost, Amazon fees (from the calculator), Ad spend assumption (e.g. 20-25%) and finally, Storage buffer.

Run a few scenarios (optimistic, realistic, ugly) and see if it still makes sense.

If your planner idea is ending at 10% margin on paper, it’ll likely be worse live. If the mug gives you 30% after ads, that’s workable.

Does that help?

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Thanks so much @jordySG, that breakdown actually makes it way clearer! 🙌 Especially the part about rounding dimensions up, I wouldn’t have thought of that.

One thing I didn’t quite get though… when you say you “tack on 20–25% for ads + returns” is that just a rule of thumb you use, or do you work it out from past campaigns? I’m worried if I just add a random % I’ll either overestimate and talk myself out of a product, or underestimate and get stung later. How do you decide on the right number?

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@jordysg

So quick beginner-ish question from me… when you guys talk about “landed cost,” does that include things like customs, packaging, and freight forwarding, or are you literally just looking at supplier invoice + shipping?

I’ve only done affiliate sites up to now, so product costs aren’t my thing, but I’m trying to wrap my head around what the real number should be. I feel like if I ever tried FBA and only used the supplier cost, I’d be fooling myself on margins.

How do you make sure you’re not missing some hidden fee in the total?

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@olivias Hey Olivia,

It’s early here in Singapore but I wanted to get this out before the day runs away with me again! The 20 to 25 percent isn’t a magic number. It’s just a guardrail I use before I’ve got real sales data to go on. Once the listing has been live a few weeks, I update it with actuals.

When I launch something, ad spend is always heavier at the start. So I’ll pad my sheet with 25 to 30 percent to stop myself from getting starry eyed about margins. After about a month, I check TACoS (that’s ad spend divided by total sales) and see where it’s settling. If it’s running closer to 18 or 20 percent, I know I can adjust my assumptions down. If it’s spiking into the high 20s, then I keep the bigger buffer.

Returns are a smaller piece but I fold them into that same range. For kitchen stuff I plan around 3 to 4 percent coming back, paper goods like planners are usually lower. I’d rather overstate that cost than get caught short.

So the “extra 20–25” is basically me baking in two unknowns: ads that I know will be unpredictable in the first few weeks, and a bit of wastage from returns. Once you’ve got a couple of months of history, you can tighten the number and get more accurate.

If you want, I can share the way I set up my sheet so you can plug in your own assumptions and then update it once you’ve got sales data. Would that be helpful?

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@terryhutchins Hi Terry,

Good question. I treat landed cost as everything it takes to get one unit into FBA and ready to sell. Not just supplier price.

For me that’s product, packaging, inserts, carton, freight to port, main freight, insurance, customs duty, brokerage, drayage, any 3PL prep, labels, and the final inbound to Amazon. If a cost touches the unit before it hits the FC, it’s in.

Quick sanity check I use: invoice plus all shipping plus all taxes and fees, divided by units received in sellable condition. That’s your real number.

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@jordysg Thank you Jordy. Makes a lot of sense.

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@jordysg I see, thank so much for your super detailed responses!

I have built a quick sheet as you described above and I’m playing around with some numbers. Very interesting. I could get lost in this for days!