How do I work out my Amazon.sa margin from the fees in my settlement report?
Convert the report's fees into an amount per unit: referral and fulfilment fees as charged on the order, plus each unit's share of monthly storage. Add that total to your product cost and enter the item price excluding VAT as the selling price. The margin you get reflects your own account, not a generic fee table.
Three kinds of fee, three ways to count them
- Order-level fees such as the referral fee appear against each order in the report. Take them as they are for one unit.
- Unit-level fees such as fulfilment fees, if the marketplace stores and ships for you, also appear per unit shipped.
- Periodic fees such as monthly storage are charged on your whole inventory, so divide them by the units you sold that month.
The third kind is the one people forget, and it is what separates a fast seller from a product sitting in a warehouse.
A worked example
A product costing 48 sells for 80 excluding VAT. On product cost alone: profit 32 and margin 40%.
From the settlement report: a referral fee of 10 and a fulfilment fee of 9 on the order.
Storage for this product came to 60 for the month and you sold 30 units, so each unit carries 2.
Total fees 21, cost 69. In the Profit margin calculator: profit 11, margin 13.75%, markup 15.94%.
These figures are illustrative; the point is to take yours from your own report. Notice how a 40% margin on paper became under 14%.
Slow sellers pay more
If you sold only 10 units that month instead of 30, with the same storage bill of 60, each unit carries 6 instead of 2. Cost rises to 73, profit falls to 7 and the margin to 8.75%. Same product, same price, but slow sales ate more than a third of what profit was left. So re-run the numbers each month for items whose sales are slowing, and think about sending less stock in or clearing it.
Mistakes that inflate an Amazon margin
- Entering the VAT-inclusive price. Tax you collect is not profit.
- Leaving out the cost of shipping stock into the marketplace warehouse. Spread it across the units, as you would international freight.
- Carrying an old referral fee over to a new price. If it is a percentage, it moves with the price. To solve for a new price with a known fee percentage, use the Selling-price calculator.
- Ignoring sponsored ads. If they are spent on one product, divide them by that product's sales.
To track total fees month by month across all your products, you can log them in the Expense summary generator.
Common questions
Does the calculator know Amazon's fees?
No. It holds no marketplace's fees. You type what your report says, and the calculator works out the difference exactly.
What about returns?
If a product has a high return rate, add the average return cost per order to its cost as well.