Know your exact profit, margin, and ROI before investing in any product.
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Understanding your cost structure is the foundation of a profitable Amazon business.
Amazon charges a referral fee on every sale, typically 8%–15% depending on the product category. Electronics are usually lower; beauty and accessories are higher. Always check your specific category.
The UAE applies a 5% VAT on most products. If you're a VAT-registered seller, this is collected from the buyer — but it still affects your pricing strategy and net receipts.
If you use Fulfillment by Amazon (FBA), your shipping cost includes FBA fees. If self-fulfilled (FBM), include your actual courier cost. This significantly impacts your margin calculation.
A healthy Amazon margin is typically 20–30%+. Below 15%, it becomes hard to run ads (PPC) profitably. Always calculate margin before sourcing any product.
ROI measures how much return you get on your invested capital (cost of goods + shipping). A 50%+ ROI per product cycle is considered strong for Amazon FBA sellers.
Don't forget: PPC advertising, return rates, storage fees, and product photography. Add these to your cost structure for a realistic profit picture before you commit to a product.