What is an FBA calculator and how to use it
If you are selling on Amazon, you are surely familiar with all the different costs that come into the final calculation. Those costs quickly add up. If you make the mistake of miscalculating your costs, you may end up with a lower profit margin then you’d like. Or even worse, you may end up losing money.
That’s where FBA calculators come into question. With these handy tools, you will save yourself a lot of time and potential headaches.
A short introduction to Amazon FBA
In case you haven’t heard of it already, FBA stands for Fulfillment By Amazon. As you’re surely familiar, Amazon has the world’s largest fulfillment center. As the largest online store in the world with over 90 million Prime users in the USA alone, Amazon is a huge market to tap into.
The business model is quite simple.
- It’s your job to find products to sell on Amazon
- Create product listings
- Send products to Amazon fulfillment centers
- Amazon will handle the packaging and shipping as well as returns
How to optimize your product listing for Amazon
When you think about it, Amazon is basically a huge search engine for people looking to buy stuff. And like and search engine it uses keywords to decide on what product to show to customers.
You need to know what people are searching for on Amazon if you want to show up on the front page.
That’s where most of the searches end. So if you want that prime real estate, you better get familiar with Amazon SEO.
What is Amazon SEO?
In a nutshell, it’s search engine optimization for the purpose of better ranking at search results. It’s not much different from Google SEO, although it’s more simple.
There are a couple of things to keep in mind.
- Keywords are the lifeblood of Amazon SEO
- Product description and product detail page is the most important part of the SEO equation
- Backend keywords is another opportunity to target potential buyers
You should put the most important keywords in the product title. Those are the search terms people are actively typing into Amazon.
The product details page is another opportunity to include keywords you couldn’t fit into the title, as well as your chance to list all the features and benefits of your product.
Use descriptive language and do your best to sell the product in the description.
Backend keywords or “hidden” keywords are terms you can type into the backend of your sellers account for the purpose of giving Amazon more information about your product.
The limit is 250 characters, so use them wisely.
Those keywords will not be shown to the customer, so avoid unnecessary punctuation.
Why use Amazon FBA calculators
More then a third of the first time Amazon sellers lose money because they don’t know their true profit. What is the true profit?
That would the money that’s left from Amazon sales minus all the costs.
The costs that come into question when selling on Amazon can be roughly divided into three categories:
- Front-end costs - buying samples, making quality photos, shipping products
- Variable costs - FBA handling fee, storage fee, returns, etc…
- Cost of marketing - the cost of your advertising efforts (pay-per-click, promotions)
If you want to turn selling on Amazon into a real business, it’s not enough just to randomly decide upon a product to sell. Most of your efforts should be funneled into researching the right product and calculating if the product even has the potential to be profitable.
While you may even be making sales, if you don’t calculate your costs properly you may end up with no profit at all.
FBA fees are usually 15% of the price of the product as well as another 3$ for handling and shipping the item in question. When you take into consideration all of the work that Amazon is doing for you it truly does seem like a small cost to pay.
But, we want to be precise with our costs and that is why we use FBA fee calculators.
How to use Amazon FBA revenue calculator
FBA calculator for Amazon is a free tool made to show you the total costs of your product so that you can know your profit margin.
The steps to calculating your revenue are quite simple.
- Find your product on Amazon
- Type in the name, UPC, EAC, ISBN or ASIN of your product into the calculator and enter the product cost, shipping cost as well as other details
- After you enter all the information hit the calculate button and wait for the cost breakdown.
3 other best Amazon FBA calculators
The team at Jungle Scout really took the effort to make a comprehensive tool that will help you launch your Amazon business. Not only does it list all the fees associated with selling on Amazon, but the tool also explains it so you can understand it better.
It is not a free tool, but it may be a good option for someone wanting to get a little extra edge over his competitors.
It also comes with a Chrome extension so you can get real-time data while browsing the Amazon page.
While not as detailed as Jungle Scout’s app, Viral Launch makes up for it in ease of use. You just type in the product URL or ASIN and you wait for the calculator to break down the costs and profit per product.
If you are aching for more information though, you can check out their Chrome extension as well.
Another great free tool that comes in the form of a Chrome extension as well. You can just type in the product’s ASIN and let the calculator do the rest.
Their website is also quite comprehensive and great for understanding all the costs that come into the equation, such as product size, shipping costs, etc.
Selling on Amazon may be one of the best ways to achieve financial independence. With the help of tools such as FBA fee calculators, it’s easy to find potential winning products to sell. Most of the manual work can be outsourced to applications, while it’s your job to optimize the listings and make sure that the whole business functions like a well-oiled machine.