How to calculate the real margin of a product on Amazon
Updated 9 October 2026 · Pablo Pedrajas
The real margin of a product on Amazon is calculated starting from the price excluding VAT and subtracting, per unit: the referral fee (a percentage by category, for example 15%), the FBA fulfilment fee, storage, the landed cost of the product, returns and, finally, advertising. It's calculated per product, per channel and per country, because VAT and fees change. The figure that matters for decisions is the margin before advertising: it's the ceiling on what you can spend on ads.
Why the margin you see isn't the real one
Most sellers look at one of two numbers: the one a tool calculates, or the one from subtracting the product cost from the price. Both leave things out. The ones that weigh most:
- VAT, which isn't yours and changes with the country you sell in.
- Storage, which is charged by volume and time, and shoots up from October to December.
- Landed cost: the product doesn't cost what you pay the factory, but that plus freight, duties and preparation until it reaches the warehouse.
- Returns and units that come back unsellable.
If one of these pieces is missing, you can be selling at a loss without knowing it.
The pieces, one by one
- Sale price excluding VAT. Divide the VAT-inclusive price by 1.21 if you sell in Spain (19% in Germany, 22% in Italy, at the standard rate). What's left is your revenue.
- Referral fee. A percentage by category, with a minimum of €0.30 per item in most: 15% in "everything else", 7% in electronics, and tiered in others such as beauty or clothing. Amazon calculates it on the total amount the buyer pays; check in your settlement report exactly which base it's charged on, because Amazon's own pages aren't clear on whether it includes VAT.
- Fulfilment fee (FBA). Fixed per unit, by product type, size and weight, from Amazon's table. Since April 2026 it carries a 1.5% fuel and logistics surcharge in Spain.
- Storage. Per cubic metre per month: for standard size, €27.54 from January to September and €52.20 from October to December. Spread it per unit according to how long stock takes to sell, and add surcharges if stock sits for a long time.
- Landed cost of the product. Purchase, freight, duties, preparation and shipping to Amazon.
- Returns and incidents. The percentage of units that come back, multiplied by what each one costs you.
- Advertising. What you spend on ads per unit sold.
Fixed costs (the Professional plan fee of €39 a month, your team, your tools) don't go per unit: they are covered by the combined margin of all units.
An example with round numbers
A made-up product, sold on Amazon Spain, with fees assumed for the example:
| Item | Per unit |
|---|---|
| Sale price incl. VAT | €29.90 |
| Price excl. VAT (÷ 1.21) | €24.71 |
| Referral fee (15% of €29.90) | −€4.49 |
| FBA fee (assumed) | −€4.20 |
| Storage (assumed) | −€0.25 |
| Landed cost | −€7.00 |
| Returns and incidents | −€0.50 |
| Margin before advertising | €8.27 (33.5% of the price excl. VAT) |
| Advertising | −€3.00 |
| Contribution margin | €5.27 |
At first glance, "I buy it at 7 and sell it at 29.90" looks like a huge margin. The real margin before ads is €8.27, and with advertising it comes down to €5.27.
By channel and by country
The same product doesn't have one margin: it has one for every place it's sold.
- In Germany or Italy, VAT changes and often so do the price, fulfilment fees and advertising.
- In your own shop, the referral fee disappears, but payment gateway fees, shipping and another way of acquiring customers appear.
- With Pan-EU, stock spread across countries adds the VAT obligations of each warehouse; I explain them in the guide to Amazon FBA in other countries.
An average across all channels hides exactly what you need to see: which product-and-country combination makes money and which one loses it.
What it's for
The real margin isn't only for defending yourself. It tells you how much you can invest to grow: the margin before advertising is the most you can spend on ads per unit without losing money. From there, deciding how much advertising to run stops being a bet. I explain it in the break-even ACOS guide.
Frequently asked questions
On which price does Amazon charge the referral fee?
On the total amount the buyer pays, which includes shipping and gift wrap. Amazon's public pages aren't clear on whether that base includes VAT, so it's worth checking in your settlement report.
What is a good margin on Amazon?
There's no figure that applies to everyone. It depends on the category, the price and how much you need to invest in advertising. What does apply to everyone is calculating the margin before advertising per product and per country, because it sets how much you can spend on ads.
Which costs should be included in the margin of an FBA product?
VAT of the country of sale, the referral fee, the fulfilment fee, storage, the landed cost of the product, returns and advertising. Fixed costs, such as the Professional plan fee, are covered by the total margin.
Sources (official documents, in Spanish)
General information based on Spanish rules in force on 9 October 2026. It is not a substitute for analysing a specific case.
A real case · MARGIN How much margin you can give up to grow Real margin isn't only for defending yourself. Sometimes it tells you that you can afford to give some of it up to grow. Read the case →Shall we look at your business?
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