How to Use Amazon Revenue Calculator?
If you wish to profit from running the business on Amazon, product research is the key. You will have to play with different costs and pricing points to make sure of maximum profit margins and account for Amazon’s commissions.
Fortunately, you do not have to plug a bunch of numbers into an Excel spreadsheet and longing for the best. The Amazon revenue calculator helps merchants estimate margins and costs to pick the top items for investment and determine which fulfillment method is optimal — the AMZ fulfillment center or your own fulfillment.
This tool might seem daunting if you are a new Amazon merchant but read on. This blogpost breaks down how the FBA revenue calculator works and how to utilize this essential tool.
Why Use the FBA calculator?
Using the Amazon fee calculator is a critical part of exploring potential products for selling on Amazon. The calculator helps merchants to easily and quickly calculate the cost of selling a product on AMZ, as well as the potential FBA commissions that would be incurred. By utilizing the calculator, sellers can get an understanding of the profitability of selling a particular item on Amazon.
Using the Amazon fees calculator is also essential for budgeting purposes. By apprehending the cost of selling an item on Amazon, merchants can better schedule their budgets.
How to Determine the Profitability of an Item with Amazon FBA Calculator?
Using the Amazon fee calculator is a straightforward process. To start, you will need to have an AMZ profile and have your items listed in the marketplace. You are ready to use the tool when you have set up your profile and listed your goods.
Step 1: Sign into AMZ Seller Central.
The first stage to using the AMZ revenue calculator is to sign into your platform's Seller Central account. It's the account you utilize to manage your goods and sales on Amazon.
Once you have logged into your profile, you must find the revenue calculator page. For this, click on the "Reports" section on the webpage, then pick the "Revenue Calculator" option from your drop-down menu.
Step 2: Pick your item.
When you navigate to the revenue calculator webpage, you will need to choose the item you wish to estimate the possible earnings. For this, click on the "Select a product" button. It will open up a compilation of all the items you have added on Amazon. Next, select the item you wish to estimate the potential returns for and click "Add to Calculator."
Step 3: Fill in product details.
Once you have selected your item, you will need to fill in some details about it. For example, it includes the product's type, sales volume, and price.
The product type is essential because it will influence the potential profits you might generate from your item. Therefore, ensure to pick the most accurate type for your goods.
The sales volume and pricing are also crucial factors to consider. The price will impact the potential earnings you generate from your item, and the sales volume will impact how quickly you reach those earnings.
Step 4: Check the results.
Once you have entered all the necessary info, click "Calculate" at the bottom of the webpage. It will produce an estimate of the potential profits you might generate from your item.
The results page will display the estimated revenues for the goods in the current month and the projected revenues for the next year. It will show you the possible earnings you might generate from your merchandise over the next year.
FBA Fees NOT Included in the FBA Calculator
While the Amazon calculator is a fantastic tool for estimating expenses, you need to be aware that these charges are not necessarily all-inclusive. Other FBA costs only apply in certain circumstances, so it's really necessary to understand what those costs are and under which occasions they would apply to avoid any undesirable surprises along your way. Such fees are explained and outlined below.
Long-term storage costs
Twice a year, stock in AMZ fulfillment centers is evaluated as a long-term storage commission besides the monthly storage fee. So, when you order a lot of merchandise and it does not move quickly, these commissions could eat into your profit margins significantly.
Returns processing costs
A returns processing commission is charged for products for which AMZ delivers free return shipping (Watches, Jewelry, Apparel, Shoes, Handbags, Luggage, and Sunglasses). The cost equals the total fulfillment expense for the item. So remember it if you decide to sell a product in one of these niches.
Unplanned service costs
When stock arrives at a fulfillment center without appropriate preparation or labeling, AMZ performs service for sellers, and a per-unit fee applies. The marketplace provides lower commissions for the first shipment, but if you make more errors on future shipments, such fees double. So ensure to have followed all of the rules for product preparation and labeling — otherwise, you might include these expenses in your product price to get an exact margin calculation.
Removal order costs
If you need to have the item returned to you from the AMZ warehouses, there is a per-item charge to be aware of. There are also commissions associated with the liquidation or disposal of your goods once they're in the platform's warehouses.
Bottom Line
You know that a lot goes into a sale before it hits your bottom line. That is why the AMZ revenue estimator can help you immediately find essential metrics you need to check product ideas. However, for a more comprehensive analysis, you can also try third-party services that consider more variables. Happy selling!
