Reverse Margin (Target COGS) Calculator for Amazon Sellers — Work backwards from price to a safe supplier cost before you reach out. This free calculator helps you turn a selling price into a target landed COGS (product + freight/duty to FBA). It factors in Amazon fees, FBA fulfillment, ads, and other per‑unit costs so you can quote suppliers with confidence and still hit your margin.
How to use this calculator
- Enter Selling Price (marketplace price). If your marketplace shows tax in the price, set Tax to Inclusive and choose the tax rate (or keep 0% if none).
- Enter Amazon Fees — Referral fee % (category), and FBA fee per unit (Fee Preview).
- Add Other Per‑Unit Costs — inbound freight to FBA, duty, packaging, returns allowance, coupons/promos, etc. Optionally add planned ad spend per order.
- Set Target Profit — choose a Target margin % (of net price, ex‑tax) or a Target profit per unit.
- Review outputs: Target COGS, Profit per unit, Contribution margin %, and a quick “what if supplier quotes X?” view.
Formulas
Let: P = selling price (gross); t = tax rate; Pnet = price excl. tax → Inclusive: Pnet = P / (1 + t); Exclusive: Pnet = P
ref% = referral fee (decimal); FBA = FBA fee per unit; OC = other costs; ADS = ad spend/order; target = m% (margin) or π (profit ₹/$).
Referral fee: RefFee = ref% × Pnet
Target profit: if margin % → π = m% × Pnet; if profit amount → use directly
Target COGS (landed): COGS* = Pnet − RefFee − FBA − OC − ADS − π
Contribution margin %: CM% = (Pnet − RefFee − FBA − OC − ADS − COGS) / Pnet × 100
Optional Break‑even ACoS: (Pnet − RefFee − FBA − OC − COGS) / Pnet × 100
Inputs & outputs (at a glance)
Inputs
- Selling Price (₹/$)
- Tax: Inclusive/Exclusive, Tax % (set 0% if not applicable)
- Referral Fee %
- FBA Fee per unit
- Other Costs per unit (freight, duty, packaging, returns, coupons)
- Planned Ad Spend per order (optional)
- Target: Margin % or Profit per unit
Outputs
- Target COGS (landed) — the maximum you can pay per unit to hit your target.
- Profit per unit — should match your target profit if you buy at Target COGS.
- Contribution Margin % — after all entered costs.
- What‑if check — enter an actual supplier quote to see the new margin.
Worked example
- Selling price (incl. 18% GST): ₹1,499
- Tax: Inclusive @ 18% → Pnet = 1499 / 1.18 = ₹1,270.34
- Referral fee: 15% → RefFee = ₹190.55
- FBA fee: ₹85.00
- Other costs: ₹40.00 (inbound, packaging, returns)
- Planned ad spend: ₹120.00
- Target margin: 20% of Pnet → π = 0.20 × 1,270.34 = ₹254.07
Target COGS: COGS* = 1,270.34 − 190.55 − 85 − 40 − 120 − 254.07 = ₹580.72 → ₹581
At Target COGS: Profit per unit ≈ ₹254.07; Contribution margin ≈ 20.0%
What if supplier quotes ₹620? CM% = (1,270.34 − 190.55 − 85 − 40 − 120 − 620) / 1,270.34 = ~16.9%
Tips & edge cases for Amazon sellers
- Taxes: If your marketplace includes tax in displayed price, use Inclusive; otherwise use Exclusive.
- Fees change by category/size tier: Always pull the latest Fee Preview / FBA rate card.
- Promos & coupons: Treat them as costs (enter in Other Costs) or reduce the selling price accordingly.
- Returns & defects: Add a small returns allowance per unit for a truer margin.
- Bundles / multi‑packs: Enter the selling price and FBA fee for the bundle; Target COGS becomes per‑bundle.
- Import duty vs. COGS: You can put duty inside COGS or keep it in Other Costs—just be consistent.
- Currency: Convert supplier quotes to your selling marketplace currency before comparing.
Glossary
- COGS (landed): Product + freight/duty/packaging to get inventory into FBA, per unit.
- Referral fee: Amazon’s percentage fee on the sale price (category‑specific).
- FBA fee: Per‑unit fulfillment fee based on size/weight tier.
- Contribution margin: (Net revenue − all variable costs) ÷ Net revenue.
- Break‑even ACoS: Max ad spend % of revenue that yields zero profit.
Changelog
- v1.0 – Initial release with tax handling, target margin/profit modes, ads & other costs, target COGS, and what‑if check.
FAQs
➜ How should I handle price including vs excluding tax?
Use Inclusive if your listing price shows tax to shoppers; the tool removes it for margin math. Otherwise, keep it Exclusive.
➜ Where do I find the FBA fee amount?
Use Fee Preview (Manage Inventory) or the official FBA rate card for your size tier.
➜ Target margin % vs. target profit ₹—which is better?
If you manage by KPIs, use margin %. If you have a strict rupee/dollar goal per unit, use profit ₹.
➜ How do I account for PPC?
Enter planned ad spend per order separately, or include it in Other Costs.
➜ Does this include storage or long‑term storage?
Add a per‑unit estimate under Other Costs if material.
➜ Is shipping to Amazon part of COGS?
Either approach works. We call the result Target COGS (landed)—include all costs to get inventory sell‑ready at FBA.
