What's a Good Margin on Amazon FBA?

Reference guide · 5 min read

It's the first question anyone starting on Amazon FBA asks, and also one of the most confusing: is a 20% margin good? 15%? Do you need 30% for it to be worth it? There's no single answer, but there are reference ranges that keep you from launching blind.

The range most sellers use

As a general industry reference:

15-25% or higher: considered a healthy margin. It gives you room to absorb surprises (a high return rate, an Amazon fee adjustment, a shipping cost change).
10-15%: gray zone. Can work with high, stable volume, but any unexpected cost eats into profit fast.
Below 10%: the business is very exposed. A fee increase, a more expensive-than-planned PPC campaign, or a higher-than-expected return rate can bring you to break-even or a loss.
Below 5%: in practice, it's common to end up losing money once you count absolutely every cost (including the ones people forget, like bank fees or launch PPC).

Why margin alone isn't enough

Margin tells you what percentage of the selling price you keep as profit. But it doesn't tell you how much capital you need to tie up to get there, or how long it takes for that money to come back. That's what ROI (return on investment) is for: it calculates your net profit as a percentage of what you actually put out of pocket (product cost + freight + fees), not the selling price. That's why ROI is usually a higher number than margin, and it's the metric that matters most when you're deciding between products with the same capital available.

The costs people forget to count

Many margin calculations that circulate as "examples" only subtract product cost and Amazon's fee. In practice, to get a real number you also need to add:

Bank fees for international wire transfers to the manufacturer (SWIFT)
The cost of returns, which often can't be resold
PPC budget if you're planning to launch with ads

Once you add all of this, a product that looked like 20% margin "on paper" can end up at a real 12-14%. It's not that the original number was calculated wrong on purpose — it's that almost nobody includes these costs by default.

Calculate your real margin for free, with all these costs included (bulk purchase, bank fees, returns, optional PPC).

Open the calculator →

Bottom line

If your calculation comes out to 15-25% or more once you've counted every hidden cost, you're on solid ground. If it comes out below 10%, it's worth revisiting price, supplier, or your cost mix before placing the big order.