Key Metrics
Before diving into the calculations, it’s worth understanding exactly what each number means. Seller Aim surfaces four core profitability metrics for every product:
Profit is the most direct measure — it tells you the dollar (or pound, or euro) value you net from a single unit sold.
ROI is the most important metric for capital allocation. It tells you how hard your money is working. A 10 cost (50% ROI) is far more attractive than a 40 cost (12.5% ROI).
Margin is useful for comparing products that sell at very different price points, and is the metric most relevant for VAT and tax planning.
Break-even price is a practical negotiating and pricing tool — it tells you the floor below which you cannot sell without losing money, and gives you a reference point when approaching suppliers about pricing.
FBA vs FBM Fees
Amazon charges sellers in different ways depending on how a product is fulfilled. Seller Aim calculates both models automatically based on the product’s category, dimensions, and weight pulled directly from the Amazon listing.FBA (Fulfilled by Amazon)
When you send inventory to an Amazon fulfillment center, Amazon handles storage, picking, packing, and shipping to the customer. The fees involved are:- Referral fee — a percentage of the sale price (typically 8–15% depending on category), charged on every sale regardless of fulfillment method
- FBA fulfillment fee — a per-unit fee covering pick, pack, and ship, calculated based on the product’s size tier and weight
- Storage fee — a monthly fee per cubic foot of space your inventory occupies in Amazon’s warehouse (higher rates apply during the October–December peak period)
FBM (Fulfilled by Merchant)
When you fulfill orders yourself, you only pay Amazon the referral fee. However, you need to account for your own shipping costs to the customer. Seller Aim includes an editable shipping cost field in the FBM calculator so you can enter your actual postage and packaging costs. FBM is sometimes more profitable for heavy, bulky, or low-velocity products where FBA fulfillment and storage fees would otherwise erode margin significantly.FBA and FBM are calculated side by side in Seller Aim so you can instantly compare which fulfillment method makes more financial sense for each specific product — without having to run two separate calculations.
Setting Your Cost of Goods (COG)
The profit calculation is only as accurate as the cost of goods you enter. COG is the total landed cost of a single unit — what you actually pay to have the product in your possession, ready to send to Amazon (or ship to a customer for FBM). What to include in COG:- Purchase price from your supplier
- Inbound shipping to your prep centre or warehouse (prorated per unit)
- Prep and labelling fees (if using a prep service)
- Any import duties or customs costs (for international sourcing)
VAT and Tax Settings
Tax treatment has a direct impact on profitability calculations, and Seller Aim supports both European and US sellers.European Sellers — VAT
If you are VAT-registered and selling on Amazon’s European marketplaces (UK, Germany, France, Italy, Spain, etc.), your effective revenue and costs look different depending on your VAT scheme:- Standard VAT — you charge VAT on sales and reclaim VAT on purchases. Your profit calculation should use ex-VAT figures.
- Flat Rate Scheme (UK) — you pay a fixed percentage of gross turnover to HMRC and keep the difference. Seller Aim allows you to configure your flat rate percentage so calculations remain accurate.
US Sellers — Sales Tax
For US sellers, sales tax is generally a marketplace-facilitated tax collected and remitted by Amazon directly, so it does not typically affect your net profit calculation. Seller Aim’s default US configuration reflects this. If your specific situation requires custom tax treatment, you can adjust it in your account settings.Interpreting Results
Once you have all your inputs set — COG, selling price, fulfillment method, and tax settings — Seller Aim gives you a complete profitability picture. Here’s how to use those numbers effectively.What makes a “good” ROI?
There’s no universal answer — the right ROI threshold depends on your business model, capital availability, sales velocity, and risk tolerance. That said, common benchmarks by model are:- Online arbitrage: Many experienced sellers target a minimum of 30% ROI as a starting threshold, factoring in the relatively quick inventory turnover and low risk per unit
- Retail arbitrage: Similar to OA, though faster turnover sometimes justifies accepting slightly lower ROI on individual units
- Wholesale: Lower per-unit ROI (15–25%) can still be attractive when buying in volume with reliable, repeatable supply
- Private label: ROI expectations vary widely and are secondary to margin and long-term brand value
Using break-even to negotiate with suppliers
Break-even price is one of the most actionable outputs of the profit calculator. If you know you need to sell at £18.99 to break even and the current Buy Box price is £21.99, you can work backwards to determine the maximum COG you can accept. This gives you a hard number to bring to a supplier negotiation:“At your current price of £9.50 per unit, I’m at 18% ROI. To make this order work at scale, I need to be at £8.00 — can you get there at a minimum order of 200 units?”
Checking your numbers before every order
Profitability conditions on Amazon change. Prices fluctuate, competitors enter and exit, and Amazon adjusts fees periodically. Get into the habit of re-running the profit calculator immediately before placing any order — even for products you’ve bought before — to confirm the numbers still work at today’s prices and fees.Go Deeper
Profit Calculator
See the full reference for the Seller Aim profit calculator — all inputs, outputs, bulk analysis mode, and how to save scenarios for later review.