Where the money goes
On a typical FBA listing, total Amazon fees land somewhere between 25% and 40% of the selling price once referral, fulfilment and storage are combined. Sellers who model only the referral fee consistently overestimate their margin.
The fees you should also model
- Long-term storage — charged on inventory held beyond a threshold period, and it escalates
- Returns processing — in some categories the referral fee is not fully refunded on a return
- Removal or disposal — the cost of getting unsold stock back out
- Advertising — usually the largest uncosted item for new listings
A margin rule of thumb
Many experienced sellers target a net margin of at least 20% after all fees but before advertising, on the basis that advertising spend during a product launch will consume much of the remainder. A listing that nets 8% before advertising is unlikely to be viable.