Amazon FBA, Marketing Strategy / 5 MIN READ

How to Use Amazon FBA Calculator Data to Drive Decisions

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No matter what type of product they specialize in, the eternal struggle all Amazon sellers face is managing their inventory. This involves not only ensuring that you keep enough of your best-selling items in stock. It also extends to knowing which products you choose to have available in the first place. Of course, there’s a lot more to this process than simply cherry-picking whichever items you think may connect with consumers.

To really make your Amazon seller account stand out, you should focus on a specific niche. Building your store around a related group of products helps build brand loyalty and can be a key growth strategy.

But once you identify your niche, you need to find the best products to sell. After all, you need to maximize your potential profitability. Thankfully, the Fulfillment by Amazon Revenue Calculator can assist in taking your Amazon store to the next level.

What is the Amazon FBA Calculator?

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Without the right data to guide you toward success, your chances of creating a sustainable business on Amazon are slim. With such intense competition, that’s just the way it is. You can’t afford to gamble your store’s future, at least not without some direction. That’s why Amazon offers a clean way to collect the data you need to make better business decisions.

Once you do have the data accessible, you can extract it and apply it to your business in a very tangible, actionable way. With the Amazon FBA Calculator, you’ll be able to understand your Amazon FBA fees and compare your fulfillment options. And in doing so, you’re able to make the right call which can positively impact your Amazon store’s future.

Before you take any steps forward, the FBA Fees Calculator gives you a chance to make data-driven decisions. Rather than turning to guesswork, this tool alleviates the pressure so that you can analyze if a particular product is even worth the effort to integrate it into your store. Before you invest in a product, you’ll receive a glimpse at how it affects your bottom line.

Using the Amazon FBA Calculator

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As Amazon sellers know, you have two primary fulfillment options:

Fulfillment By Amazon (FBA) and Fulfillment by Merchant (FBM) route.

In the latter, sellers manage their own fulfillment. But if you’re looking to assess which fulfillment method makes more sense, the Amazon FBA Calculator provides real-time cost comparisons between FBA and FBM. Even if you’re already onboard with FBA, you’d use the FBA Fulfillment Fees Calculator to determine if a product is ideal for your needs. 

In any case, here are the simple steps you need to take advantage of the FBA calculator:

  • Enter product details: First, find the Amazon product you want to enter into the calculator and enter its details into the search bar. You can choose between the product name, UPC, EAN, ISBN, and ASIN, depending on what you have available. Whichever you use, a simple cut-and-paste works best to ensure accuracy.
  • Plug in your numbers: Then you will enter a few key figures. These include the item’s selling price, the shipping cost, and the total per-unit fulfillment cost to the seller. Even if you don’t have the exact numbers, you can run the calculation based on an estimate. This estimated total should include storage cost, labor, packaging, shipment, customer service and other costs.
  • Run your reports: Once you have all the relevant data inputted into the calculator, it’s time to generate your report. The Amazon FBA Calculator will inform you of the comparative profit margins between using FBM and FBA. But it will also advise you how to adjust your selling or shipping prices to remain competitive.
  • Adjust your reporting: Your instant report will cover comparative revenue, cost, seller proceeds, and net profit. You can even adjust the number of monthly units sold, and the report will update to reflect the estimated monthly sales increase you’ll experience with FBA. In the process, the Amazon FBA Calculator helps you gain valuable insights you can use to shape your product decisions.
  • Take action: Of course, the data you receive from your report is not useful unless you implement what you’ve learned. If that product you were considering adding to your inventory simply isn’t worth the investment, you’ll be able to anticipate this misstep first. The future of your Amazon seller account depends on your ability to course-correct as soon as possible. So use the Amazon FBA Calculator as a guideline going forward.

The Amazon FBA Difference

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As the calculator makes abundantly clear, FBA can often be a critical tool in getting the most out of your store. But if you’re still unclear how FBA differs from simply handling the fulfillment yourself, here’s a quick rundown of some of the key ways in which Amazon FBA can be beneficial:

  • Small, high-end products: With FBA, your store will see the most benefit if you carry mostly smaller, higher-end products. Shipping costs can wreak havoc on your bottom line if you’re not strategic about your inventory. And you need those high profit margins to justify the investment in FBA. If your store tends to handle a lot of heavier items, carefully consider if FBA is right for you.
  • Less stress about fulfillment: As an Amazon seller, you have enough on your plate without worrying about order fulfillment. Rather than dealing with packaging and delivering your orders, Amazon takes this burden off your shoulders. FBA could very well be worthwhile simply because you’re delegating this essential task to a company that knows all too well how to efficiently manage that side of the business.
  • Customer service management: Likewise, FBA sellers lean on Amazon to assist in customer service matters. Because the company governs the fulfillment process from top to bottom, you won’t have to deal with the persistent distractions that customer service issues can bring. You’re also better positioned to leverage not only the investment of FBA but the infrastructure and implicit trust of Amazon’s brand. 
  • Limited need for physical space: Sellers who do their own fulfillment not only have to contend with the additional pressure of running it themselves. They also have to operate out of a primary physical location (i.e., their fulfillment center). But with FBA, Amazon stores your products for you and handles all related tasks. So you’ll enjoy much more independence and keep costs down in this area.

From the outside, becoming an Amazon seller may seem like an easy way to build your own business. But if you’ve been running your store for a while, you know just how complicated it can truly be. You need all the insights you can to help steer your Amazon seller account toward maximum profitability.

In that regard, the Amazon FBA Calculator is a godsend. We cannot stress enough how useful of a tool it is to shine a light on what works and what doesn’t. So, if you aren’t already, be sure to incorporate this tool and its reporting into your best practices.

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Originally published Mar 31, 2020 2:11:28 PM / Updated June 5, 2020

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