Amazon FBA: How to Calculate Your Cost of Sale
What is the Cost of Sale in Amazon FBA? The question that many people who are new to Amazon FBA is what is the cost of sale. Well, Cost of Sale refers to the actual price of your product online on the Amazon marketplace. It is not your profit or loss. In simple words, it is your selling price.
To calculate the sale cost, you need to know the following things: Quantity sold, Shipping cost, Handling fees, Amazon fulfilment rate Amazon Seller Central fee Amazon Fulfillment Cost Cost of sale calculation formula: Cost of Sale = Quantity X Unit Price + Handling Fee + Fulfillment Rate + Shipping Fee.
If you have not yet computed out the Cost of Sale, then there are some things which you must remember while calculating. These things will help you understand the calculation, and you will quickly figure out the Cost of Sale.
The most crucial thing in this formula that will help you calculate the Cost of Sale is “Quantity Sold”. You should figure this quantity as the total number of products you sell on Amazon. So, you can calculate the exact number of units by finding out the actual sales of your products.
Next is your unit price, which is the selling price of each product. This is the cost of your product.
Shipping cost is nothing but the cost of shipping your products to your customer. You must know that Amazon handles your products to complete your orders. You should include this cost in your Cost of Sale calculation formula. The fba shipping cost calculator might be helpful for handling it.
If you ship your products with a carrier or courier, you need to pay a handling fee from your profit. It is the percentage amount you have to pay from your total net profit.
Amazon Fulfillment Rate:
This is the rate at which Amazon will fulfil your orders. It is the percentage amount you have to pay from your total net profit. If your Fulfillment rate is 50%, then your cost of sale will be 50% of your selling price. In other words, it means you need to take only half of your selling price to complete your order.
Amazon Seller Central Fee:
There is another fee which you should pay from your total profit. This is the fee that Amazon charges you for their services. It is the fee that they charge for fulfilling your orders.
If you desire to sell more on Amazon FBA, it is better to open an FBA account. If you don’t have much time for this, then I suggest that you start selling the products in the standard marketplaces and add them on top of it later.
We hope that after reading this article, you have understood what the Cost of Sale is and how to calculate it. But, if you have any inquiries regarding this topic, please comment to us below. We will answer you as soon as possible.