Learn the money side of selling

How do you calculate profit margin on Amazon?

Calculate Amazon profit margin by subtracting all costs (COGS, referral fee, FBA fees, storage, and advertising) from revenue to get net profit, then dividing net profit by revenue: Net margin = (Revenue - COGS - Amazon fees - ads) / Revenue. Multiply by 100 for a percentage.

Is selling on Amazon profitable?

Selling on Amazon can be profitable, but it isn't automatically so. Healthy private-label sellers often net somewhere in the mid-teens to low-twenties percent after all costs, while many sellers run thinner or lose money once Amazon's stacked fees, advertising, storage, and returns are counted. Profitability comes down to whether your unit economics survive fees that scale with price — and whether you're actually tracking net profit per SKU rather than watching gross sales.

What is a good ACoS on Amazon?

A good ACoS is one that's below your break-even ACoS, and your break-even ACoS equals your profit margin before advertising. So if your product has a 30% margin, any ACoS under 30% is profitable on those ad-driven sales. There is no universal "good" number — it depends entirely on your margin and your goal for the campaign.

How do you do bookkeeping for an Amazon FBA business?

Do Amazon FBA bookkeeping on the accrual basis by recording each settlement as a summarized journal entry that splits the payout into gross sales, every fee type, refunds, and sales tax — not as a single net bank deposit. That gives you a clean profit and loss and books that reconcile to Amazon.

How do you reconcile Amazon payouts in QuickBooks?

Reconcile Amazon payouts in QuickBooks by posting each settlement as a summarized journal entry to a clearing account, splitting it into gross sales, fees, refunds, and tax, then matching the actual bank deposit against that clearing balance. When the clearing account nets to zero, the payout is fully reconciled.

How do you find cost of goods sold (COGS)?

Find cost of goods sold with this formula: COGS = beginning inventory + purchases during the period - ending inventory. It captures only the cost of the units you actually sold, including landed cost (product cost plus inbound freight, duties, and prep), not your unsold stock.

How do you track inventory for an Amazon FBA business?

Track FBA inventory by maintaining a perpetual record of every unit at its landed cost, reconciling Amazon's Inventory Ledger and shipment reports against your own counts on a schedule, and using cycle counts to catch discrepancies. The goal is to always know how many units you hold, where they are, and what they cost.

How much are eBay selling fees?

eBay's main selling cost is the final value fee — a percentage of the total amount of the sale (item price plus shipping and tax) that varies by category, typically in the low-to-mid teens. On top of that there's a small fixed per-order fee, optional listing upgrade fees, and higher rates if you're not a Store subscriber or fall below performance standards.

How much does Amazon take per sale?

Amazon typically takes somewhere between a quarter and half of each sale once you stack the referral fee, FBA fulfillment fee, and storage. There is no single number: cheaper products lose a much bigger share than expensive ones, because the fixed per-unit fulfillment fee doesn't shrink as your price drops.

Does Amazon reimburse for lost or damaged inventory?

Yes. Amazon reimburses sellers for FBA inventory it loses or damages in its own network, and since 2025 it values that inventory based on your sourcing or manufacturing cost rather than an estimated sale price. Many cases are auto-reimbursed, but those automatic credits are frequently underpaid, and shorter claim windows mean unfiled cases expire — so reconciling your inventory ledger against Amazon's is how you actually get paid what you're owed.

How do you become an Amazon seller?

To become an Amazon seller, register for a selling account in Seller Central by choosing a selling plan (Individual or Professional), then provide your business and tax details, a bank account, and a valid ID for identity verification. Once your account is approved you choose a fulfillment model (FBA or FBM), source and list products, and — critically — set up bookkeeping from day one so your fees, COGS, and profit are tracked correctly before volume hits.

What is a marketplace facilitator?

A marketplace facilitator is a platform such as Amazon, eBay, Etsy, or Walmart that lists third-party sellers' products and, under marketplace facilitator laws, is legally responsible for collecting and remitting sales tax on those sales. For most marketplace sales, the platform handles the tax — not the individual seller.