What is FBA Revenue Calculator? Basics of "Visualization of Profit Structure" and ROI Optimization that Newcomer EC Person in Charge Should Master

In sales on Amazon, first step to maximize profit is "accurate cost graps". FBA Revenue Calculator is tool officially provided by Amazon, which can instantly calculate effective profit amount and profit margin by entering sales price of product, delivery agency fee, inventory storage fee, etc. In this article, we explain visualization method of profit structure that new EC person in charge must hold and basic strategy to optimize ROI (Return on Investment).

Table of Contents (Click to Expand)

1. Definition and Role of FBA Revenue Calculator
2. Decompose Profit Structure into MECE
3. Data Utilization for ROI Optimization
4. Calculation of "Allowable CPA" in Ad Operation

1. Definition and Role of FBA Revenue Calculator

FBA Revenue Calculator is browser-based tool to simulate profitability when using Amazon Seller Service (FBA). By entering ASIN (Amazon Standard Identification Number) or entering dimensions and weight of product directly, it automatically calculates Amazon commission, delivery fee, and storage fee.

Mistake that new person in charge tends to fall into is judging by "simple gross profit" just subtracting purchase price from sales price. Actually, sales commission by category and monthly storage fee oppress profit. By visualizing these in advance, risk of "the more you sell, the more you lose money" can be avoided.

2. Decompose Profit Structure into MECE

To understand profit structure, it is necessary to organize cost into MECE (Mutually Exclusive and Collectively Exhaustive). Main items calculated by simulator are as follows.

Referral Fee: Percentage of sales set for each product category.
FBA Fulfillment Fee: Fixed cost based on size and weight of product.
Inventory Storage Fee: Variable cost according to occupied volume and period in warehouse.
Cost/Promotion Fee: Costs such as purchase price, Amazon Ads (Sponsored Ads), etc.

3. Data Utilization for ROI Optimization

Based on 'Net Profit' from the simulator, consider measures to maximize ROI. For example, reducing product size by a few cm might lower the FBA fee tier, dramatically improving per-unit profit.

When profit structure is visualized, it becomes clear which variable should be moved. Should unit price be raised, logistics cost be lowered, or inventory turnover rate be increased to suppress storage fee? Simulator data is essential for these decision makings.

4. Calculation of "Allowable CPA" in Ad Operation

When operating Amazon Ads, "profit amount before deducting ad cost" calculated by FBA Revenue Calculator becomes upper limit of "allowable acquisition cost (CPA)" as it is. Running ads without grasping this number is like driving in dark. Goal setting of ROAS (Return On Ad Spend) is also based on this simulation result.

FAQ

Q. Is calculation result of FBA Revenue Calculator 100% accurate?: A. Basic fees are accurate, but irregular costs such as long-term storage fees and return/disposal fees, and treatment of consumption tax need to be considered separately. Please use it as prediction of standard sales case to the last.
Q. Can I check profit margin of competitor products?: A. Yes, possible. Inputting competitor ASIN into the simulator allows estimating their Amazon Fee and delivery costs, aiding in price competitiveness analysis.

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