How to Find Your Minimum Selling Price on Amazon
Most sellers calculate profit by starting with a price and working backwards. This calculator flips that — you start with your costs and desired margin, and it solves for the price you need. The math is more complex than simple addition because Amazon's referral fee is a percentage of your selling price. Raise the price, and the fee goes up too. This creates a circular dependency that requires algebraic rearrangement to solve correctly.
The formula: Target Price = Fixed Costs ÷ (1 − Referral Rate % − Target Margin %). Fixed costs include your COGS, FBA fulfillment fee, inbound shipping, and any storage estimate. The denominator accounts for both the percentage Amazon takes and the percentage you want to keep. If you want 20% margin with a 15% referral fee, Amazon and you together claim 35% of the price — meaning your fixed costs must represent just 65% of the final price.
Pricing Strategy for Amazon FBA
The break-even price (0% margin) is your absolute floor — the price below which you lose money on every sale. Your target price is the price you need to hit your desired margin after all costs. The gap between break-even and target price is your pricing buffer — it represents the per-unit profit you're building in.
Once you know your target price, compare it to what the market actually sells at. If the prevailing competitive price is above your target price, the product is viable. If it's below, you have a sourcing problem — you need to either reduce COGS (better supplier pricing, larger MOQ) or choose a different product.
Don't forget to factor in PPC (Amazon advertising) when setting your minimum price. If you plan to run ads at an estimated 10% ACoS, add that to your target margin. A product that needs to sell at $19.99 to hit 20% margin before ads should be priced at ~$21–$22 to maintain margin after advertising spend. Our PPC ACoS Calculator helps you model advertising impact on your break-even.
After finding your target price, plug it into the FBA Profit Calculator alongside your actual competitor price to confirm full-scenario profitability — including optional PPC, storage, and return rate inputs. Use the Landed Cost Calculator to make sure your COGS input here represents true all-in sourcing cost, not just the supplier's FOB price. For the full pricing strategy framework — including how to account for PPC, seasonality, and competitor pricing — see our complete Amazon FBA seller guide.