Profit Calculation Queries
- Thomas Timbul
Occasionally we get questions like:
“Why is the profit so different from the FBA Revenue Calculator?”
Here are the (most likely) explanations:
Reference Price
Price Checker uses the so-called “Reference Price” to base its calculation on, which might not always be the buy box. PC2 can also be configured to use a ‘lowest price’ of a segment or a historical average.
To understand which of these entries was in fact used for any given item, look at the Reference Price Type column.
The amount itself is shown in the Reference Price column.
Cost Profile: Prep, VAT, Shipping
In many cases your cost profile is the source of any discrepancies between Amazon’s calculator and PC2’s net profit figure.
Do make sure that you add your shipping cost both from the supplier and to Amazon, in so far as either is configured, as well as any prep fees.
To compare like for like without these extra costs, try running with the “No Prep/VAT/Shipping” option. If that doesn’t appear, click “Advanced” and create another cost profile. “9. Cost Profile” will change into a drop down selector including that option.
VAT in particular is not accounted for in Amazon’s revenue calculator.
In brief, VAT affects your calculation as follows:
VAT status | Effects | Reason |
|---|---|---|
Registered |
| Amazon zero-rate fees |
Not registered |
|
|
VAT is applied at the specified rate without regard to market selection. Always create a separate cost profile for markets with vs without VAT.
So for a VAT registered business, a VAT rate of 20%, and a nominal selling price of GBP 24, the actual revenue after tax and before fees from that sale is only GBP 20. Fees are assessed on the selling price, which is a double whammy that the other calculators doesn’t tell you about.
Amazon doesn’t tell you everything - Price Checker can account for ALL costs.
Incorrect Fees
Well, with Amazon tinkering around the edges it’s absolutely possible that we might have dropped the ball and have an incorrect fee somewhere. Please get in touch providing the ASIN and the expected vs actual fees, and we’ll get it fixed. This will improve the product for you and everyone else, so Thank You in advance!
Still feels off?
Price Checker’s calculations in Excel are totally transparent. We encourage you to trace the formulas and see what figures are used elsewhere.
Hopefully you’ll be able to find the ‘culprit’ that way, which will help hugely when you contact us for assistance figuring it out.