On a $10 product, another $0.30 in Amazon fees takes 3 percentage points off you
By Robinlobo · October 31, 2026 · Curated by George's Blog
On a $10 product, another $0.30 in Amazon fees takes 3 percentage points off your margin. That's before you add a holiday discount. I'd start reviewing the products that had the least margin to spare.
Recalculate contribution per unit after advertising, using peak fulfillment fees, the 3.5% fuel and logistics surcharge, and Q4 storage costs. The surcharge applies to the fulfillment fee, so it needs to be calculated on the higher peak rate.
A product that made sense in September can leave you with very little now, even if the sales dashboard looks healthy.
What you do next depends on where the product stands:
- If it's still profitable but the margin's thin, reduce ads first, starting with branded and defensive spend that may be capturing demand you already have.
- If it's losing money before advertising, test a higher price or a physical multipack that spreads fulfillment costs across more units. Cutting ads won't fix a product that loses money without them.
- If a price test still leaves it unprofitable and it's selling slowly, stop replenishing it and let the remaining inventory sell through.
It's also worth checking the exact price band and size tier before deciding the product no longer works. A small pricing adjustment can change which fee applies.
Inventory needs the same care. Sending less stock can reduce storage costs, but running too lean can trigger a low-inventory-level fee instead. Model both before cutting the next shipment.
I wouldn't want to discover in January that a product we'd been pushing all quarter stopped making money in October. I'd rather make the pricing or spending decision now.