The right Amazon price doesn’t start from the competitor’s price — it starts from your true cost, which is far more than what you pay the supplier.
What eats into your selling price?
- Referral fee: a percentage of the selling price, usually 5–15% depending on category.
- Fulfilment fees: with FBA, every unit pays a fee by size and weight, plus monthly storage.
- VAT: if you’re registered, 15% of the displayed price isn’t yours.
- Returns: some orders come back, and some can’t be resold.
- Ads: in a product’s first months, advertising is part of every order’s cost.
The simple formula
- Add product cost + inbound shipping + packaging.
- Add the per-unit fulfilment fee.
- Choose your target margin (say 20%).
- Find the price that, after referral fee and VAT, still covers all of the above plus the margin.
Don’t do it by hand: the seller pricing calculator does it and also gives your break-even price — the price you must never go below.
Mistakes we see often
- Calculating commission on purchase price instead of selling price.
- Forgetting VAT is inside the displayed price.
- Joining a price war with a seller dumping stock at a loss.
- Ignoring launch ad costs, then calling the product a “loser”.
When should you cut the price?
Only when you know exactly where break-even sits, and when the cut is part of a plan (a season, clearing a colour, launch). Before any promotion, run the promotion pricing calculator to see how many extra orders you need.