Is Amazon eating your profits one fee at a time?

An Amazon seller plugged their numbers into the FBA calculator and nearly choked: $19.99 retail, just $0.64 profit. That’s a razor-thin 3.2% margin—before ads, returns, or reality. 👊

Now they’re second-guessing everything. The seller community had opinions—and not all of them were comforting.

Would you still launch?

• Amazon fees draining your profits? 😩
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SELLERBITES INBOX

An Amazon seller (OP) asked: “Is this really how FBA fees work? I’m showing $0.64 profit on a $19.99 item… what am I missing?”

OP plugged their numbers into Amazon’s FBA Revenue Calculator and nearly choked. 

After landing cost ($3/unit and $3.89 with tariff), the calculator showed cost per unit at $19.35 and net profit just $0.64 on a $19.99 sell price—3.23% margin. 

Here’s the breakdown:

• Fulfillment fee: $13.79
• Storage fee: $0.54
• Inbound shipping: $2.02
• Unit cost after tariff: $3.89
• Final cost per unit: $19.35
• Estimated monthly sales: 100
• Estimated monthly profit: $64

And that’s before ads, promos, returns, or reality. 😅

📉 The $0.64 wake-up call

OP was gearing up to order 2,507 units—roughly $7,500 landed (before tariffs)—and thought they had room to price competitively.

But now, with Amazon’s numbers staring back at them, they’re wondering…

Did they just make a $7,500 mistake? 😬

🧮 Something’s off in the math

Seller in the thread  noticed OP’s calculator inputs weren’t right.

• Item price field is wrong. OP entered $3 (unit cost) where the selling price should go. That alone wrecked the output.
• Shipping charge field used incorrectly. Sellers suggested setting that to $0 and rolling inbound costs or misc freight into the proper cost fields.
• COGS left blank. Unless the product is free, you need to enter landed cost (product + tariff + inbound to FBA).
• Weight creep. Double-check unit weight; even fractions matter. A $13.79 FBA fulfillment fee is huge for something expected to retail at $19.99.

Fixing those fields gives a truer margin picture—and may be less terrifying… or confirm it’s worse.

💣 The margin trap

Even if the fee numbers were right:

• $3.89 landed + $13.79 fulfillment + storage/inbound etc = almost no headroom at $19.99.
• That’s before PPC, promos, refunds, damaged inventory, and return shipping.
• Launching thin leaves you no defensive budget if a competitor cuts price or costs rise (tariffs, freight, fuel).

🧠 What other sellers said

The hive-mind didn’t sugarcoat it.

• Raise price. If the category can support $24.99–$29.99, go there fast.
• Premium over bargain. Competing cheap with those fees is suicide; build brand and charge for value.
• Recalculate after package change. Shave size to drop fee tier before launch.
• Always account for ads. Some sellers set their top-of-search pricing strategy assuming $5–$10 blended ad spend per unit.
• Returns happen. Budget for them—or your “profit” disappears.
• Plan for tariffs. Negotiate cost relief, reduce materials, diversify sourcing away from one country.

🚧 Should you even launch?

At just $0.64 profit per unit—before ads or returns—some sellers say it’s a no-go. Others see it as a long-game play. But when margins are this thin, one bad turn can tank the whole launch. 

Do the math, expect the worst, and don’t ignore the hidden fees.

THOUGHT OF THE DAY

If your margin is $0.64 before ads and returns, is it really a profit—or a ticking time bomb?

Don’t just price your product, pressure test it. A solid cost breakdown means nothing if FBA fees, errors, or packaging knock your margins down to cents.

TOGETHER WITH WALMART MARKETPLACE

Set your business up for growth with Walmart Marketplace & WFS

Lavazza, a successful coffee brand, saw more than 200% growth in Walmart Marketplace sales within 18 months of leveraging Walmart Fulfillment Services (WFS) to manage fulfillment*  

*Data provided by Lavazza.  

Before WFS, Lavazza filled their own orders, which strained their logistics network. With WFS, Lavazza sees: 

• Improved efficiency  
• Increased on-time delivery to customers with WFS’ fast and free 2-day shipping 
• The ability to reinvest in marketing and advertising. 

“We send our product to a single location. Walmart picks it up and distributes it faster than we'd be able to do.”   

– Matt O’Hara, E-Commerce Operations Manager, Lavazza North America  

Want to grow your business? Let WFS do the heavy lifting while you focus on scaling your way. 

Join Walmart Marketplace today

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