FBA Break-Even Price = (COGS + Shipping to Amazon + Prep Costs) ÷ (1 - Amazon Fee Percentage). To find break-even units: Fixed Costs ÷ (Selling Price - Variable Cost Per Unit). Your break-even point tells you the minimum price or volume needed to cover all costs.
Break-Even Price = Total Cost Per Unit ÷ (1 - Amazon Fee %). Total cost includes COGS, inbound shipping, prep costs, and any allocated fixed costs. Amazon fee % includes referral fee (typically 15%) and estimated fulfillment fee as a percentage of price.
Include variable costs (COGS, Amazon referral fee, FBA fulfillment fee, shipping to FBA) and fixed costs (software subscriptions, advertising budget, warehouse lease, prep center fees). Allocate fixed costs per unit based on expected monthly volume.
Break-Even Units = Total Fixed Costs ÷ Contribution Margin Per Unit. Contribution Margin = Selling Price - Variable Costs Per Unit. This tells you the minimum monthly volume needed to cover all overhead and fixed expenses.
PPC advertising increases your break-even point. Add your target ACoS (Advertising Cost of Sale) to variable costs. For example, at 20% ACoS on a $20 product, add $4 per unit to your cost structure for break-even calculations.
Review break-even calculations quarterly or whenever significant changes occur: Amazon fee updates (usually annual), supplier price changes, shipping rate adjustments, or changes in your advertising strategy and ACoS targets.
Track every fee, calculate true profit per unit, and never guess your margins again.
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