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Amazon Price Formulas - Complete Guide

Understanding Amazon pricing formulas is essential for profitable FBA selling. This guide covers all the key formulas you need to calculate selling prices, profit margins, and ROI.

1. Basic Profit Formula

Net Profit = Selling Price - Total Costs

Where Total Costs = Product Cost + All Amazon Fees + Other Costs

2. Profit Margin Formula

Profit Margin % = (Net Profit / Selling Price) × 100

Example: If profit is $5 and selling price is $25, margin = (5/25) × 100 = 20%

3. ROI Formula

ROI % = (Net Profit / Total Investment) × 100

Total Investment includes product cost, fees, and all other costs

4. Break-Even Price Formula

Break-Even Price = Total Costs per Unit

The minimum price at which you neither profit nor lose money

5. Target Price Formula (Based on Margin)

Target Price = Total Costs / (1 - Target Margin %)

Example: If costs are $10 and you want 30% margin, price = 10 / (1 - 0.30) = $14.29

6. Amazon Fee Calculations

Referral Fee

Referral Fee = Selling Price × Referral Fee %

Minimum referral fee is $0.30 per item

FBA Fulfillment Fee

Based on size tier (determined by dimensions and weight). See our size tier calculator for details.

Storage Fee

Storage Fee = (Length × Width × Height / 1728) × Storage Rate × Months

Dimensions in inches, divided by 1728 to get cubic feet

7. Total Cost Formula

Total Cost = Product Cost + Referral Fee + FBA Fee + Storage Fee + Shipping + Packaging + Advertising + Other Costs

Example Calculation

Product: Kitchen Item

Selling Price: $29.99

Product Cost: $12.00

Referral Fee (15%): $4.50

FBA Fee: $3.22

Storage (2 months): $1.50

PPC: $2.50

Total Costs: $23.72

Net Profit: $6.27

Profit Margin: 20.9%

ROI: 26.4%

Use Our Calculator

Don't want to calculate manually? Our calculator does all these formulas automatically:

Open Profit Calculator →

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