How to calculate your net margin on eBay and Amazon
The net margin on Amazon and eBay is the amount you have left after deducting the cost of the product and the cost of sale.
You must have the ability to track all costs to ensure you maintain a healthy margin and avoid selling at a loss. That means knowing all the costs associated with each and every sale.
How do you calculate net margin on Amazon or eBay?
The difficulty is knowing your cost of sale when there are numerous fees and charges involved. For most sellers, keeping track of all the moving parts is an unenviable task.
Selling costs include:
- Selling fees (Listing fee, final value fees)
- Value Added Tax
- Payment processing fee (e.g. PayPal)
- Logistics costs
- Fulfilment fees (e.g. Fulfilled By Amazon – FBA)
- Pick and pack or packaging costs
Below is an example of the dashboard in xSellco’s real time repricing tool. The left hand side shows the net margin, cost price and the cost of sale.
The planned net margin and net margin percentage for every item is displayed in the dashboard. The net margin of every sale is shown in the sales order processing section. Dashboard reports display the real time profit stack, showing you the cost of the sale and your true net margin.
The Revenue Stack:
Some repricing companies charge a commission based on a percentage of the sellers gross turnover. That’s a serious problem if you can’t keep track of all the costs of making a sale. No seller wants to be a busy fool, selling inventory unprofitably and being charged for the privilege.
At xSellco, our Instant Repricing Software has a percentage based charging model. There’s an important distinction – we help to make all your sales profitable and only charge a fee for profitable business.
xSellco Price Manager uses all costs to make automated repricing decisions on Amazon. Your Amazon prices are easily replicated to eBay to ensure price parity across all your sales channels.
We eliminate those unprofitable sales and safeguard your net margins on Amazon and eBay by encouraging profitability across your entire inventory.