Selling on Amazon FBA/FBM in 2025 from the Seller’s Perspective: Price Calculator, Cash Flow, Account Risks

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Selling on Amazon FBA/FBM in 2025: Is it still worth it? – 10+ things to consider

Is Selling on Amazon Still Worth It?

Today, we want to share our experience as a multi-channel seller who has navigated the waters of Amazon, eBay, and our own online store for the past five years. We’ll take you through the realities of selling on Amazon and explore, through real-life examples, whether it’s still the golden goose it used to be.
👉 Key Topics Covered:
✔️ Pricing Strategies for Sellers ✔️ Returns problems ✔️ Amazon’s Fees ✔️ Winning the BuyBox ✔️ Account Suspension Risks ✔️ Amazon’s Bureaucratic Pitfalls: VAT, GPDR, GPSR, GTIN ✔️ Alternatives to Amazon

Pricing Strategies in a Competitive Marketplace. Price Сalculator.

Let’s assume you already have a product to sell. The fundamental question is one of price.
Determining the correct price for a product on Amazon is a delicate balance. You must consider the platform’s fees, the cost of returns, and the competition within the BuyBox.

In order not to trade at a loss, you need a calculation. We have prepared a simple table template. You can get this ready-to-use spreadsheet using links below or compose something similar yourself.

In the gray fields, enter the initial data:
purchase VAT (if the product is imported, it may differ from the retail price), sales VAT (if required for the country of sale), approximate percentage of shipping and storage costs (from the purchase price), Amazon Referral fees, Amazon FBA fees for one average unit (must include delivery to warehouse and logistics from warehouse to buyer), percentage of returns unsuitable for further sale, costs of processing and packaging the product, and the desired Profit Margin.

A couple of comments. Usually, the issue of customer returns is delicately omitted by various online coaches, but it will give you a lot of headaches. While customer-friendly, the overly lenient Amazon return policy often leaves sellers at a disadvantage, with a high return percentage eating into profits

Statistics show gigantic (and growing) volumes of returns, the percentage of which fluctuates from 5 to 40, depending on the category. Most returned goods are unsuitable for further resale – just look at this sample returned from Amazon.

One of the ways to automatically check buyers for reliability and propensity for returns and fraud is TreeTalk Credenza. This useful tool helps to store order data in a GDPR/CCPA-compliant manner and checks buyer ratings in a semi-automated mode using both local and crowdsourced databases.

If you already use this software, the refund rate may be reduced, but we still have to consider it, because a return is not just a loss of revenue on the product, it is also a loss in storage and delivery back and forth from the buyer, and with the FBA scheme – also to the Amazon warehouse and back to you. Therefore, we must take this into account.

As for the Profit Margin, it may seem big to some, but later you will understand why you should not set it too modestly.

In the table itself, we enter the purchase price and, if necessary, the exchange rate if the purchase currency differs from the sale currency.

White fields will be calculated automatically based on the entered data. The “No-profit FBM price” column calculates the minimum price for selling without profit using the FBM scheme (Fulfillment by Merchant, i.e. with your logistics), the “FBM price” column calculates the acceptable price for selling using the FBM scheme, and the “FBA price” column calculates the acceptable price for selling using the FBA scheme (Fulfillment by Amazon, that is from a warehouse and with Amazon logistics).

Here are the first results. We see that a product purchased at a price of $50 or more should be sold at three times the price, and a cheap product at least four times the price.

The calculation formulas for expensive and cheap products have different empirical coefficients. When calculating for your product, just copy the corresponding line.

Now we have a minimum price. However, reality may make adjustments. Study BuyBox and competitors’ offers. If their prices are higher – great, enter your final price in the last two columns and mark it green. However, the price of competitors or Amazon itself for the same or similar product may be lower than the calculated one. If the product has already been purchased, you will be forced to lower the price. It’s good if it still allows you to make money…

Amazon’s own competition in the BuyBox can be particularly disheartening, as the platform often prioritizes its products or those of larger sellers, making it difficult for smaller businesses to get a fair share of visibility.

Dividing the pie. Who gets the lion’s profit share?

To check the business model, we have two Reverse check tabs. We transfer the values ​​from the first table or adjusted figures to the “Initial data” section. In the gray Price field, we indicate the real selling price. And we get Unit Economics for your product in real money.

So, when selling a product on Amazon, bought for 100 euros, for 310 euros, you will receive about 38 euros of them (roughly 12%). Is there an error here? No, everything is correct – the control figure of 37.8% shows a marginality close to the specified one. What’s the trick? It should be taken into account that you indicated the desired marginality from the purchase price (100 euros), and Amazon and the state take their commissions from the selling price (310 euros). As a result, Amazon is the main beneficiary of your activity, having 70 euros or more than 22 percent of the pie. The state is not far behind, having 22 percent in the form of VAT (you will pay other taxes from your share later).

There’s nothing we can do about government bureaucracy at the moment. Still, a reasonable question is: what if, instead of giving Amazon the lion’s share of the revenue, we sell the goods in our own online store, for example?

Just memorize this idea. We will return to this later, but for now – the second tab Reverse check. 

It contains the calculation of Unit Economics for a cheaper product.

Let’s see, to make a profit we sell the product almost 5 times more expensive than the purchase price, for 44 euros. Of this, you will receive less than 4 euros (about 8 percent). Conversely, Amazon has more on the cheap product – 38 percent.

But what if competition forces you to lower the price? Let’s see. Trouble! At a price of 40 euros per unit, your share of the pie will decrease dramatically, to 3 percent. And at a price of 38 euros, your revenue will fall to zero. At the same time, the state will still get its swag, and Amazon’s share will even increase, wow!

Like our spreadsheet? You can buy it right now by paying securely with Stripe here. Or you can get it for free by subscribing to our partners’ news – TreeTalk Credenza.

But let’s continue. Okay, let’s put the price back in place, so the math is not so scary. But if you think that since you are in profit, you can live happily on your couple of bucks, I have to disappoint you…

Navigating Amazon’s “Innovations” and Pitfalls: Interesting Cash Flow Selling on Amazon

In the “Payments” section on Amazon, you will find beautiful graphs. Let’s take a look and figure it out. This is a chart from a real test account.

First of all, pay attention to the payment date. Amazon pays money to your account twice a month. So, you will not receive the money immediately, as if it were your own store. Plan your churn rate taking this into account! And you, as we have already figured out, will only receive part of the money. Amazon will keep a little less than half. But remember – you must pay VAT from the Net volume from sales (that is, from your share and from Amazon’s share). By the way, what are these “Promo rebates”? Yes, get used to it: Amazon will pay for promotions and benefits for premium customers out of your pocket.

Let’s look at another interesting graph from the Amazon admin panel. It shows what happens if you send a product to an Amazon warehouse but it doesn’t sell. The cost of storage and maintenance increases every month. So don’t forget to recall such products from the warehouse.

Well, let’s imagine that you have succeeded and your sales are growing. Let’s look at another chart.

We optimized prices and refused Amazon’s warehouse and logistics services, and it seems like Amazon’s share has decreased. But why, with sales of 1084 and a balance of 1315, will we only get 565 in the next payment (in 2 weeks again)? Note the interesting figure – 749 in the Account Level Reserve. This is the money that Amazon will keep as insurance against returns. The more sales, the greater the reserve. It can only be received by you with zero sales. That is never?

Navigating Amazon’s “Innovations” and Pitfalls … and lots of small bumps

Global Trade Item Number (GTIN) and barcodes for Amazon

To sell a product on Amazon, it must have a GTIN – Global Trade Item Number (EAN or UPS barcode). You can find what is it in the wiki, but for now, it is important to remember three things.

1. If the manufacturer of the product has already assigned it a GTIN, this is good, but it means that many sellers can sell it.
2. If the product does not have a GTIN (like many Chinese items), you will have to register and get your own numbers. In most countries, this is a paid service and involves a subscription. GTINs are also resold, but buying a dozen (or a hundred) of other people’s numbers is a bad idea; Amazon will sooner or later discover that they do not correspond to the product, and the item will be blocked.
3. Before creating a product card, always verify the GTIN using the official service (link in the description) to avoid delays or blocking.

GTIN verification:

https://www.gs1.org/services/verified-by-gs1?mode=prd&gepir_redirect=1&utm_source=gepir_web&utm_medium=gepir_gtin_search&utm_campaign=vbg_replaces_gepir

Tricks with BuyBox Amazon: How do you win?

It’s great if the product sells well. But be careful: in this case, Amazon can invite the manufacturer, or start selling it itself. In this case, your competitive chances are small. Look, our price is lower, and the leader of the BuyBox is still who do you think?

European regulations: additional bureaucracy issues

Want to sell your product on Amazon to European countries? Make sure your account meets:

• DAC7 : European tax number and other details required;
• European address and representative required for returns and customer service;
• Electrical product certification required (in some countries);
• Contract and registration numbers required for packaging disposal;
• New requirements are coming in regularly.

Missed something? Get an unpleasant notification:

Didn’t miss anything and took everything into account? This is also not a guarantee against problems. Let’s move on to the frightening part.

The risk of suspension / blocking listings and the Amazon account as a whole. Account health.

Take a look. We received such a notification last year. And when? On the eve of Black Friday! We discovered that our account and all listings were blocked, and Amazon offered to take the goods from warehouses or they destroy them!

What was that? Look at the response from Amazon support:

“a periodic account verification is a standard procedure, which can take 10 days or more”

In the end, our account and listings were unblocked, but we missed a week of shopping and sales. And we were lucky, I think! Just google the chilling cases of Amazon account blocking with millions of dollars stuck in limbo!

In general, an account can be suspended or blocked for many reasons and “policy violations” that you may not even be aware of. So visit the Account Health section of your Amazon dashboard often.

Messages from Amazon: how to deal with dozens of them?

After the scary chapter about account blocking, let’s relax a bit and see what messages come from Amazon, say, during the week.

Take action: One or more of your offers are not eligible to be a Featured Offer (Buy Box)

The most frequent message, speaks for itself.

Your payment is on the way: Disbursement Attempted

Great news! But why “attempted”? What can go wrong? A lot! Firstly, Amazon sends money not to all accounts, but only to accounts in trusted banks, the list of which is constantly changing. Secondly, before each money transfer by account details (IBAN), Amazon checks whether it can rip off money from your linked Amazon credit card, which must also be verified. Periodically, on one or another national Amazon, the account or card may be “unlinked”, respectively, disbursement does not pass, and you need to verify another card.

Commande à expédier et chargement de facture

This is a good message – there is a new order to be sent. Why in French? Each national Amazon sends mail in its own language…

Action required: Provide GPSR compliance information

This is a 2024 innovation, a “surprise” from the European Commission. Now it is necessary to:

• Appoint an EU-established Responsible Person;
• Display the contact information for the manufacturer on your listings and labels (in other words, disclose it to competitors and Amazon itself);
• Provide “Warning and safety information”.

Usually, when we receive a message like “Action required” from Amazon, we prefer, instead of spending time on fulfilling Amazon’s requirements, to invest this time in improving our own website and promoting products on it – and it pays off!

But, in this case, there is a real threat of deactivation of listings and impact on “Account Health”, so this message should be taken seriously and time should be spent on studying and fulfilling the new requirements.

On average, Amazon sends 40-50 emails a week, some of which require urgent attention. So the next very popular question seems to already have an answer:

Is Selling on Amazon FBA passive income?

Of course not! If you receive fifty emails a week that require a response, then this is more like full-time employment! And if you remember that Amazon itself receives the maximum revenue from your sales on Amazon, then in fact this is true – by selling goods on Amazon, you work for Amazon. 

If you don’t like this kind of thing, we can help. We know that dealing with Amazon’s requirements takes time and effort. That’s why we offer Amazon account administration, Amazon account management, running an Amazon store and creating product listings (use discount code YourStore202401).

But what’s far worse is that your business is completely dependent on the marketplace, which can change the rules at will at any time.

Is there an alternative to Amazon for selling physical goods?

Yes, several alternatives offer you varying degrees of freedom and control. Here are some options, listed in order of increasing freedom:
1. Other Marketplaces, like eBay, Etsy or Walmart Marketplace are user-friendly, but you still have limited control over the branding, pricing and customer experience.
2. Platforms Offering Modular Constructions, like Shopify or BigCommerce allow you to create a customized online store, giving you more control over the design and functionality of your store. However, they still come with monthly fees, transaction costs and limited customization options.
 3. Your Own Online Store on Own Hosting gives you maximum freedom.

Building your own online store on a self-hosted platform like WordPress with WooCommerce or Magento, you have complete control over the design, functionality, cash flow and customer experience. Yes, it requires more initial efforts, which, however, pays off quickly.

Don’t know where to start? Contact the experts. TreeTalk will help you create and launch your independent online store or modern landing for your product in 1-2 weeks. And with a discount code (YourStore202401), it will be even cheaper.

There’s no need to limit yourself to just one sales channel. If you think you’ve got the strength to handle several sales channels at once, you can do it. Using the right tools can make your task a lot easier. For instance, TreeTalk Credenza software will gather your imported orders from marketplaces and your own store into one local database, in line with GDPR, and will also automatically check the buyer rating. The check is done not only on your company’s internal database, but also on the depersonalized crowdsourced database. This way, you can probably cut down on the risks from unscrupulous buyers and reduce the percentage of returns.

Conclusion. Selling n Amazon for profit? It’s possible, but not easy.

This article is just a brief overview, so we didn’t get into all the nitty-gritty details. We still didn’t cover many important things, such as the ins and outs of the A-Z warranty claims, how to handle returns and losses in the Amazon Fulfilment Centers, what to do with damaged goods, or how to negotiate contracts for packaging disposal in different countries.

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This post is also available in: English