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:
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