How to Calculate True Amazon FBA Profitability (After All Fees)

Amazon’s dashboard figures misrepresent actual profit. Gross sales and payout totals do not account for product sourcing costs, inbound shipping, advertising spend, or the true cost of returns. Sellers who rely on these numbers to assess product viability are making decisions on incorrect data.

Getting to a true per-unit margin requires tracking five cost layers.

Why Amazon’s Numbers Are Not Enough

The Business Report in Seller Central shows gross sales and sessions. The Payments report shows what Amazon deposited. Neither tells you what a product actually costs to sell or what margin it generates after all expenses are accounted for.

The gap between the payout figure and true profitability can be significant. A product that appears to generate CAD $8,000 monthly in payouts might produce CAD $2,000 in actual margin, or less, once all cost layers are applied.

The Five Cost Layers

Layer 1: Amazon’s Fee Stack

Amazon charges multiple fees per unit sold. Each needs to be tracked separately.

Referral fee: A percentage of the selling price, varying by category. On Amazon.ca, home and kitchen products are typically charged 15%. Check the Amazon fee schedule for your category.

FBA fulfillment fee: Charged per unit, based on size tier and weight. Fees differ between Amazon.ca and Amazon.com. A standard-size item that costs CAD $4.50 to fulfill on Amazon.ca may cost a different amount on Amazon.com.

Monthly storage fees: Charged on cubic footage. October through December rates are higher than January through September. Slow-moving inventory accumulates storage fees that reduce per-unit economics.

Returns processing fee: Charged when Amazon processes a customer return, in addition to the lost fulfillment fee from the original outbound shipment. Category-dependent.

Other fees: Removal fees if you need to retrieve inventory, inbound placement fees introduced in 2024, and regulatory fees for applicable product categories.

If you are registered for GST/HST, all of these fees are eligible for Input Tax Credits. See Amazon GST/HST for Canadian Sellers for the full list of recoverable expenses and how to claim them.

Layer 2: Landed Cost

The landed cost is the true per-unit cost to get a product to an Amazon fulfillment center. Most sellers track only the supplier invoice price. The full landed cost includes:

• Supplier price per unit
• Ocean or air freight (allocated per unit)
• Import duties and tariffs
• Customs brokerage fees
• Product prep work
• Inbound shipping to FBA

These costs vary by shipment. A per-unit landed cost should be recalculated with each purchase order as freight rates and duties change.

Without accurate landed cost tracking, margin calculations will overstate profitability. The error compounds at scale.

Layer 3: Advertising Spend

Pay-per-click advertising costs should be calculated on a per-unit-sold basis, not treated as general overhead.

Take total ad spend for a product over a period, divide it by units sold during that period. The result is your advertising cost per unit. Subtract this from your net payout to see how advertising affects the actual margin.

ACOS (advertising cost of sale) expressed as a percentage is useful for campaign management. For profitability analysis, the per-unit dollar figure is more actionable. A 25% ACOS on a CAD $30 product means CAD $7.50 in ad cost per unit sold. On a product with a CAD $10 margin before advertising, that leaves CAD $2.50.

Layer 4: Returns

Returns are not simply refunded sales. The full cost of a return includes:

• Lost revenue on the refunded unit
• Non-refunded FBA fulfillment fee on the original outbound shipment
• Returns processing fee
• Value loss if the item is returned in unsellable condition (some percentage of returns are graded as damaged or unsellable)

High-return categories such as apparel, electronics, and some home goods require explicit returns adjustment in any margin model. A product with a 15% return rate has a materially different actual margin than one with a 2% return rate, even with identical payout numbers.

Layer 5: Unclaimed Reimbursements

Amazon owes reimbursements for inventory that is lost or damaged at fulfillment centers. These amounts are not automatically credited. They must be identified through systematic case filing.

Sellers who do not audit their reimbursement entitlements regularly are leaving revenue on the table. The amount varies by inventory volume and fulfillment center activity but is commonly in the range of 1–3% of FBA revenue for active accounts.

A Simple Calculation Framework

Step 1: Net payout after Amazon fees

Selling Price minus Referral Fee minus FBA Fulfillment Fee minus Allocated Storage Cost equals Net Payout After Fees.

Step 2: True unit margin

Net Payout After Fees minus Landed Cost minus Ad Cost Per Unit minus Returns Adjustment equals True Unit Margin.

Step 3: True unit margin percentage

True Unit Margin divided by Selling Price equals True Unit Margin Percentage.

A Worked Example

Consider a bamboo cutting board sold on Amazon.ca at CAD $52, with 220 units sold per month.

• Referral fee (15%): CAD $7.80

• FBA fulfillment fee: CAD $6.25

• Storage allocation: CAD $0.45

• Net payout after Amazon fees: CAD $37.50

• Landed cost (product and freight): CAD $12.80

• Ad cost per unit (18% ACOS): CAD $9.36

• Returns adjustment (4% rate): CAD $1.50

True unit margin: CAD $13.84 True unit margin percentage: 26.6%

The Amazon payout for 220 units was approximately CAD $8,250. The actual margin was approximately CAD $3,045. The difference is not fees Amazon charged in aggregate. It is the cost of inventory, advertising, and returns that the payout figure does not capture.

What This Requires from Your Bookkeeping

Accurate SKU-level margin calculation requires:

• Clean per-unit landed cost records updated with each purchase order
• Ad spend tracked and allocated per product, not pooled as overhead
• Returns tracked at the product level with fee impact recorded
• Amazon fee data pulled from Seller Central reports, not estimated

Most sellers lack this infrastructure. The data exists in Seller Central, but it takes time and a structured process to extract it correctly and connect it to product-level accounting records. Payout reconciliation — matching what Amazon deposited to the underlying revenue, fee, and tax components — is a prerequisite to any of this. The same reconciliation logic covered in How to Read a Shopify Payouts Report applies directly to Amazon settlements.

Scope of This Guide

This guide covers per-unit profitability calculation for FBA sellers on Amazon.ca. It does not cover:

• Multi-channel fulfillment cost differences
• Vendor Central arrangements
• Wholesale or private label cost structures outside of the framework described
• Tax treatment of any of the cost components above

Individual SKU analysis reveals which products are actually profitable and which are subsidizing underperformers. Payout totals do not.