That’s usually around 2.9% plus $0.30 – it depends on your credit card processor. That shouldn’t be because you’ll pay for it. Most people ignore this figure even when they remember all others. In our example, the cost of fulfillment and monthly storage is about $5. Pay attention to the one in red – Fulfillment by Amazon Fees. So, put in the price you’re selling it to customers and the cost of shipping from your supplier to Amazon. You don’t need to fill all the boxes because we’re not calculating your revenue but cost. Your exact product might not be on the Amazon store. Amazon has made that easy to know with this calculator. You’ll pay multi-channel fulfillment fees. Amazon fulfillmentĪmazon wouldn’t store your products and ship it to your customers for free. Use this duty calculator to determine that figure. If you’re shipping from overseas, you’ll pay duty. You will have to contact your supplier to see what the shipping cost per unit is. If your supplier is shipping it to you first before you send it to Amazon, then the cost of sending it to your home/office plus Amazon is what you spend altogether. ![]() Your supplier will need to ship your products to you or a company that handles fulfillment and warehousing (you can use Amazon). Shipping From Supplier To You (or Amazon) Using the screenshot above, if I was getting 80 pieces, the unit cost is $6.71. The cost of the product is how much you are buying it from your supplier per unit. To accurately hit the right end of the calculator, you’ll need to know the cost for the following: Cost Of Product You’ll need that because getting your variable cost is not as straightforward as your fixed cost. I have a product profitability calculator that can help you get your total variable costs per unit. Your variable cost will include the costs of your product, inventory, and shipping. It’ll include just the cost of using your ecommerce platforms and apps. If you’ve already gone through the initial set-up cost, your monthly fixed cost is much lower. In Ecommerce CEO Business School 101, I’ve outlined start-up costs for you. Your total cost might have more things that what I’ve outlined. Product descriptions and other branded content.It doesn’t include inventory, but it covers your one-time start-up cost and monthly-fixed cost. Your fixed cost includes those things that stay the same regardless of what you sell. This tells you that you need to sell 238 units to make $0 – your break-even point. The first step is to set your profit at 0, the break-even point. We need to use a bit of algebra to figure out our break-even point. And you know your fixed costs to be $5,724. So let’s say you want to figure out your break-even point for selling a product that cost you $6 per unit that you are selling at $30. VC is your variable costs (cost of inventory)Ĭontribution margin P(x) – VC(x): measures the amount of incremental profit generated by selling an additional variable unit.X is the number of units bought and sold.P is selling price (what you want to charge).The break-even formula is based on the profit equation where profit equals 0. The first thing you need to understand is the profit equation. It’s also excellent to show anyone looking to invest money into your business that you have data so that they can understand just how profitable your idea will be with a quick estimate. Also, it’s a part of your financial statements so you can see if your online business is growing year to year. Knowing what price you can break even and how many products it will take will help you analyze your profit and know what to increase or cut out while still staying competitive. ![]()
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