Instruction To Calculate Profit Margin By Amazon Revenue Calculator

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If you are an Amazon seller, knowing your profit is vital to surviving and thriving the cutthroat world of Amazon. One of the most popular questions sellers ask themselves before starting their business is, “Is it profitable to sell on Amazon?” 

Hold on…how can you know whether a product you sell on Amazon is going to be profitable before listing it? The answer is, use the Amazon Revenue Calculator to determine the net profitability on a product before selling it. 

What is the Amazon Revenue Calculator?

Amazon Revenue Calculator is a preview tool that allows you to compare revenue estimates for products based on the fulfillment channel used. With Amazon Revenue Calculator, you can easily see which fees apply to each fulfillment option and enter sales volume estimates to calculate total proceeds, as well as per-unit sold estimates.

Keep reading! Because Gearment’s going to walk you through the full process of getting to understand your business financials, and how to calculate your net profitability by using Amazon Revenue Calculator to keep your revenue always in the green. 

Read more: What Is Fulfillment By Amazon? How It Benefits?

Note: These instructions only calculate the profit margin of 1 unit of product.

Step 1: Access Amazon profit margin worksheet: AMAZON REVENUE CALCULATOR  

Step 2: Find and copy&paste the product ASIN on the page Amazon revenue calculator

You need to find the ASIN of your competitor’s product by searching for your product’s main keyword in the Amazon Search toolbar. This makes it possible for Amazon’s sheets to identify and estimate the size and weight of the products you’ll be selling on Amazon.

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However, you can also fill in the product information if you already have information about the category, dimension, and weight of the product you need to calculate profit margin:

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Refer to the dimension information of the Gearment product here: Gearment- FBA Packing Dimensions 08/2021

Step 3: Choose whether you want to calculate profit margins for FBM or FBA products:

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I. FBM: Fill in the box “Your Fulfillment”

  1. Item Price: This is the price you will sell to customers on Amazon
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  1. Shipping: This is the shipping price you will collect from customers and this will be counted towards your revenue.
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  1. Cost of seller fulfillment: This is the total cost for you to fulfill 1 unit of product. 
  • Click “click here” to enter detailed fulfillment costs for 1 product unit.
  • If you use Gearment’s fulfillment service, just enter the “ship to the customer” cost.
  • Refer to the shipping fee here: GEARMENT PRICING SHIPPING FEE.pdf
Amazon Revenue Calculator
  • Click “I do not know my detailed fulfillment cost”→ enter the approximate fulfillment cost for 1 product unit if you do not know the exact cost. 
  • Approximate fulfillment cost → only enters shipping cost if you are a Gearment seller.
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  1. Monthly storage cost per unit: the cost to store 1 unit of product per month. 
  • If you use Gearment’s fulfillment service, “Monthly storage cost per unit” is “0”
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  1. Average inventory units stored: the average number of units you store in the warehouse.

The tool will calculate costs based on the storage cost of 1 shipment instead of 1 unit of product. Therefore, enter “1” to see the profit margin of 1 unit of product. 

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  1. Cost of product: the cost of purchasing the product from your supplier, or the cost required to produce 1 unit of product
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  1. Calculate net profit:
  • Your revenue, cost, seller proceeds, and net profit statistics will appear on the right side of the interface.
  • You’ll see Amazon autofill statistics, such as the cost of sales on Amazon and net profitability.
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FBA: Fill in the “Amazon Fulfillment”

II. Item price: Item price is the price you would sell to customers on Amazon

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  1. Fulfillment by Amazon fees: 
  • The fee of fulfillment you pay for Amazon to fulfill one unit product when using FBA service. In this section, the system will charge you based on the product, product volume, and product category you selected in step 2. 
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  1. Ship to Amazon: the cost of shipping 1 unit of product to Amazon warehouse.
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  1. Average inventory units stored: the average number of units you keep in stock. This tool will calculate costs based on the storage cost of 1 shipment instead of 1 unit of product. Therefore, enter “1” to see the profit margin of 1 unit of product. 
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  1. Cost of product: 
  • The cost of purchasing products from your suppliers, or costs required to manufacture or produce 1 unit product.
  • Refer to the product Gearment here: GEARMENT SALE PRICE.pdf
  1. Calculate the net profitability (calculated profit net):
  • Your revenue, cost, seller proceeds, and net profit statistics will appear on the right side of the interface.
  • You’ll see Amazon autofill statistics, such as the cost of sales on Amazon and net profitability.
Gearment

The Amazon Revenue Calculator is a useful tool for calculating Amazon FBA fees, shipping costs, and other expenditures to determine profits. Let’s use this amazing tool to determine the maximum profit potential of your products.