How Do I Calculate My Product Profit?
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Quick answer
Product profit is the net amount left over after subtracting all costs from a product's sale price. For Amazon sellers, those costs include Amazon referral fees, FBA fulfillment charges, shipping or prep expenses, product costs, and any advertising spend allocated to the sale. The result is a per-unit profit figure that helps determine whether a product is viable and how much can be spent on ads before a sale becomes unprofitable.
Getting this number right matters because Amazon fees and campaign costs can consume a large share of the sale price. A quick calculation gives you a baseline to compare against your advertising cost per order.
What to subtract from the sale price
Start with the amount the customer pays, then remove every direct cost attached to that unit.
- Amazon referral fee
- FBA fulfillment fee or seller-fulfilled shipping
- Product cost from your supplier
- Inbound shipping, prep, or packaging costs
- Any advertising cost allocated to the order
If you use FBA, the fee depends on product size and weight. Keep the numbers on a per-unit basis so they match the sale price.
Simple per-unit profit formula
Use the formula: Profit per sale = Sale price – (product cost + Amazon fees + fulfillment + shipping + allocated ad spend).
For example, a $30 sale with $10 product cost, $4 in Amazon fees, $5 fulfillment, $2 inbound shipping, and $4 allocated advertising spend leaves $5 in net profit.
When this matters
This number is the starting point for setting a break-even Amazon Ads bid. If your profit per sale is $5, you can afford no more than $5 in total advertising cost per order before the sale loses money. Tools like the Amazon Ads Dashboard by Todoza can consolidate spend and sales data so you can see how ad costs are affecting that margin across campaigns.
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Once you know your per-unit profit, you can use it to evaluate keyword bids, set ad budgets, and decide whether a product deserves more traffic. This connects directly back to calculating a break-even Amazon Ads bid, where the profit figure becomes the cost ceiling for each click-driven sale.