Calculating Cost to Amazon – Part 1

If you answer yes to the first two questions, then you can start with your base cost to the rest of your distributors or wholesalers. If you answer yes to the last question, then you would need to factor in the costs of the third party logistics company for the following storage cost or percentage per as in case pack pick cost or percentage per as in case pack, pack cost or percentage per as in case pack.

And label printing cost or percentage per as in case pack. It is important to note that once you have the above, you would then need to divide that total cost or percentage by the number of single units of the ASIN that are packed in a case pack. For example, if your case packed, Amazon contains 10 individual ASIN units.

The storage cost per case pack is 80 cents. Then 80 cents divided by 10 would equal 8 cents per individual product for storage. Your spreadsheet of calculations will start looking like this. As you can see, you now have factored in your cost X the warehouse. If you are not using a third party logistics company and are shipping direct from your own warehouse.

You can use your own cost to wholesaler or distributor as the cost X warehouse, as this cost should already have your labor and operational expenses included from here, you would then need to include the following deductions from Amazon basic accrual percentage or co-op deduction, starting with your 10% damage allowance percentage. Remember, you can use anything from 2% to 6% and run multiple calculations and freight allowance, which can be 5%. If you’re using collect.

Otherwise you can leave this out. If you’re using prepaid. If you have other agreements that you are looking to include such as subscribe and save or a settlement discount, then you would need to include these as well into your calculations. If you are not going to choose collect as your freight option, then you would need to include your average freight percentage per individual ASIN into your calculations.

This can be worked out by taking freight charges over a period of several months and dividing them by the value of the order for each. And then converting that to a percentage of the order. For example. If an order valued at a thousand dollars cost you $112 30 in freight, then your freight percentage would be 11.2, 3%.

Therefore, if your total value of orders for the past six months came to a hundred thousand dollars and the freight for all of these orders for those past six months came to $11,230. Then the percentage would be 11.2, 3%. Once you have added up all these additional percentages, you can calculate your new cost to Amazon as shown in the spreadsheet of calculations.