What is a good net profit margin on Amazon FBA?
A healthy Amazon FBA net profit margin sits between 15% and 25% after fees, COGS, PPC, and refunds. Under 10% usually signals hidden fees or overspending on ads. Established brands with private-label pricing power can hold 25% or more, while resellers and wholesalers typically operate closer to 10% to 15%.
What counts as net profit on Amazon
Net profit on Amazon is what remains after every marketplace cost is subtracted: referral fee, FBA fulfilment fee, storage, long-term storage surcharges, ad spend, refunds, reimbursement gaps, and COGS. Gross margin from Seller Central is not net profit; it hides PPC and refunds in particular.
The safest way to benchmark is to compute net profit at the SKU level for a full month, then divide by the same SKU's net revenue after returns. Averaging across a whole account hides the outliers that quietly bleed cash.
Benchmarks by business model
Private-label brands with defensible listings and product-level PPC tuning routinely hold 20% to 25% net margin. Wholesalers running Buy Box competition sit at 8% to 15%. Arbitrage and online retail arbitrage often clear 5% to 12% because sourcing costs move each restock.
- Private label: 20% to 25% net margin is healthy, 30%+ is exceptional.
- Wholesale: 8% to 15% is normal, above 18% usually means an exclusive.
- Arbitrage / OA: 5% to 12% net after fees and PPC.
- Handmade / craft: 25% to 40% because unit prices are higher.
How Nova shows this
Nova computes per-SKU net profit in near real time, deducting every referral fee, FBA fee, refund, storage line, and product-level ad spend from your revenue. The Cockpit view flags SKUs whose net margin drops below your target so you can act before a monthly close catches it.
Frequently asked questions
Is 10% net profit good on Amazon FBA?
10% is workable for a wholesale or arbitrage account but thin for private label. If you sell your own brand at 10% net you have little room for a fee hike, an ad-spend spike, or a refund wave.
Does net profit include Amazon storage fees?
Yes. Net profit must include monthly storage, aged inventory surcharges, and long-term storage fees. Excluding them makes fast-moving SKUs look better than they are and hides slow movers.
Should PPC be part of net profit?
Yes. Ad spend is a real cost of acquiring the sale. Nova subtracts product-level ad spend from each SKU's net profit so you see the true post-ads margin.
See this in Nova
Nova surfaces this metric per SKU in near real time so you can act before your next monthly close catches it.
Try Nova free for 14 daysRelated questions
How do I calculate profit per unit on Amazon?
Profit per unit on Amazon equals sale price minus referral fee, FBA fulfilment fee, per-unit COGS, allocated ad spend, and a refund reserve. A quick formula: Profit/unit = Price - (Referral% x Price) - FBA fee - COGS - (Ad spend / units sold) - (Refund rate x Price).
How do I find hidden Amazon fees eating my margin?
The fees that hurt most are rarely hidden, they are just scattered across multiple Seller Central reports. Check monthly storage, aged inventory surcharges, low-inventory-level fees, inbound placement fees, returns processing, subscription-and-save discounts, and coupon redemption fees. Rebuilding a per-SKU P&L from the Fee Preview and Payments reports usually reveals a 3 to 8 point margin gap.
What is a good refund rate on Amazon?
A good Amazon refund rate is under 5% overall. Category averages: 4% to 6% in home and kitchen, 8% to 12% in electronics, 15% to 25% in apparel and shoes. Anything above the category average signals a listing, product, or fulfilment problem. Refund rate above the category threshold also triggers Amazon's returns processing fee.
What is contribution margin on Amazon and how is it calculated?
Contribution margin on Amazon is the money left from each sale after variable costs: COGS, referral fee, FBA fee, refunds, and ad spend. It excludes fixed costs like software subscriptions and salaries. Formula: Contribution margin = Revenue - COGS - Amazon fees - PPC - refunds. A 25% to 40% contribution margin per SKU is a healthy target.