How the Break-even Price Calculator works
Because referral fees, advertising and returns are percentages of the price, you cannot just add up costs to find the break-even price. This tool solves the equation properly: price minus percentage costs minus fixed costs equals zero (or your target profit).
Formula
- Break-even price = Fixed costs ÷ (1 − Referral% − PPC% − Return%)
- Price for target margin m = Fixed costs ÷ (1 − Referral% − PPC% − Return% − m)
- Price for target ROI r = (Fixed costs + r × Investment) ÷ (1 − Referral% − PPC% − Return%)
Example
Fixed $15.87 with 28% variable costs → break-even about $22, and about $30.50 for a 20% margin.
Amazon category: home_kitchenProduct cost (per unit): 9Inbound shipping (per unit): 1.5FBA fulfillment fee: 5.37Advertising (PPC) % of price: 10Return rate %: 3Target margin % (optional): 20
Frequently asked questions
Why does a lower price raise the fee percentage?
It does not; the referral percentage is constant. But the $0.30 minimum and low-price FBA rules can matter under $10.