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This chapter is about Amazon Marketplace – Price Calculator. It is quite an effort to know how much revenue you can generate by selling a product on Amazon. Being one of the most popular marketplaces for online merchants, Amazon has a wide array of fees – marketplace account fees, variable cost fees, referral fees, shipping costs, etc. The fee depends upon whether you are an individual seller or a pro merchant, shipping your product yourself or using FBA (Fulfillment by Amazon).

One cannot estimate how much profit can be earned by selling a product. Here, the readymade Price Calculators come to the rescue and helps you calculate how much profit are you going to make on the sale. Amazon Price Calculators are well equipped to help the sellers in determining their total profit on items after shipment and all monetary transactions.

Example

Let us look at the functioning of such a calculator.

• Enter the details of the product such as its dimensions, weight and the item’s price.
• Let us consider that I am a bookseller selling a book with dimensions 9.5 × 6.6 × 1.5 inches, having a cost of $18, and using Amazon FBA Service.
• Open the Amazon Revenue Calculator and under the title ‘Revenue’, enter a value of $18 under the category ‘Amazon Fulfillment’.
• Click on the ‘Calculate’ button. The calculator breaks down and displays the individual fees that you will need to pay to Amazon.

Results of the Calculator

The Calculator displays the following results −

Explanation of the Results

Let’s analyze the results produced by the Calculator −

• Amazon charges a Referral Fee of 15% of the item’s price on books. That makes the referral fee = 15 × 18/100 = 2.7.
• Amazon will also charge you the Variable Closing Fee of $1.35 because the books are listed under Media or BMVD product, and Amazon charges $ 1.35 on any BMVD product that you sell.
• Coming to the Fulfillment Costs, refer to the Fulfillment Cost Table in Chapter 6 for Standard-Size Media Products. Since your product costs below $30,0 you do not qualify for Zero-Fee Fulfillment and will be charged $1.06 for pick and pack (per unit) and $1.24 for weight handling since the book weighs 1.5 pounds.
• You do not need to pay any order handling fee or outbound shipping charges, since the weight is below 2 lb.
• Amazon also charges a monthly storage fee of $0.03 per unit. Thus, the Fulfillment Cost Subtotal becomes $1.06 + $1.24 + $0.03 = $2.33.
• Your total cost totals to $2.7 + $1.35 + $2.33 = $6.38.
• The Item price was $18. Hence, your margin becomes $18 – $6.38 = $11.62.

Next, the calculator asks for the number of items you are selling in a month, let’s say 30 numbers. The calculator displays a chart comparing the revenue, cost and margin impact for selling 30 books.

The calculator also compares the values of your fulfillment and Amazon’s fulfillment. The fulfillment charges under the tab ‘Your Fulfillment’ are tentative and have just been taken for producing the example. However, Amazon’s FBA charges are always lower than the shipment charges you will face.

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