You are a senior ecommerce financial analyst. You know that most Amazon sellers can tell you their revenue but not their net profit — because they stop at contribution margin and never subtract advertising, overhead, and taxes. Your job here is to build a complete per-unit and per-month net profit picture that answers the question: what is this business actually keeping? I'm going to provide my revenue and cost data. Calculate net profit at every layer. LAYER 1: GROSS MARGIN Net revenue per unit = sell price − returns cost (Returns cost per unit = return rate % × (sell price + return processing fee)) COGS per unit = product cost + inbound shipping per unit Gross margin per unit = net revenue per unit − COGS per unit Gross margin % = gross margin per unit ÷ sell price × 100 LAYER 2: CONTRIBUTION MARGIN (after Amazon fees) Amazon fees per unit = FBA fulfillment fee + referral fee + monthly storage fee + (return processing fee × return rate) Contribution margin per unit = gross margin per unit − Amazon fees Contribution margin % = contribution margin per unit ÷ sell price × 100 LAYER 3: MARKETING-ADJUSTED MARGIN (after PPC) PPC cost per unit = total monthly PPC spend ÷ total monthly units sold Marketing-adjusted margin per unit = contribution margin per unit − PPC cost per unit Marketing-adjusted margin % = marketing-adjusted margin per unit ÷ sell price × 100 LAYER 4: OPERATING MARGIN (after overhead) Overhead cost per unit = total monthly overhead ÷ total monthly units sold Operating margin per unit = marketing-adjusted margin per unit − overhead cost per unit Operating margin % = operating margin per unit ÷ sell price × 100 LAYER 5: NET MARGIN (after estimated taxes) Tax per unit = operating margin per unit × effective tax rate % Net margin per unit = operating margin per unit − tax per unit Net margin % = net margin per unit ÷ sell price × 100 Also calculate monthly equivalents for each layer: Monthly [metric] = per-unit [metric] × monthly units sold Output format: NET PROFIT ANALYSIS: [SKU / Product] Monthly units sold: X UNIT ECONOMICS TABLE | Layer | Per Unit | % of Sell Price | Monthly ($) | | Sell Price | $X | 100% | $X | | Returns Cost | −$X | X% | −$X | | COGS | −$X | X% | −$X | | Gross Margin | $X | X% | $X | | Amazon Fees | −$X | X% | −$X | | Contribution Margin | $X | X% | $X | | PPC Cost | −$X | X% | −$X | | Marketing-Adj. Margin | $X | X% | $X | | Overhead | −$X | X% | −$X | | Operating Margin | $X | X% | $X | | Estimated Tax | −$X | X% | −$X | | NET MARGIN | $X | X% | $X | HEALTH CHECK Flag each layer as HEALTHY / MARGINAL / AT RISK based on: - Gross margin: HEALTHY > 50%, MARGINAL 35-50%, AT RISK < 35% - Contribution margin: HEALTHY > 25%, MARGINAL 15-25%, AT RISK < 15% - Operating margin: HEALTHY > 15%, MARGINAL 8-15%, AT RISK < 8% - Net margin: HEALTHY > 10%, MARGINAL 5-10%, AT RISK < 5% BEFORE YOU EXECUTE: 1. If any required input is missing, unclear, or looks malformed, stop and ask me a specific clarifying question before proceeding. Do not guess or fill in plausible values. 2. If I haven't provided an effective tax rate, use 25% as a default and flag it explicitly. Do not provide tax advice — this is a planning estimate only. 3. If I haven't provided overhead data, complete the model through Layer 3 and flag Layer 4 as incomplete. 4. If you are less than 95% confident you understand what I'm asking for, ask me to clarify before executing the task. 5. Verify every arithmetic calculation by working it twice. Do not round intermediate calculations; round final figures to two decimal places. 6. After completing the analysis, flag any layer where you had to make an assumption under a "Caveats" section. ===== PASTE YOUR PRODUCT DATA BELOW. Include: sell price, COGS per unit, inbound shipping per unit, Amazon referral fee %, FBA fulfillment fee, monthly storage fee per unit, return rate %, return processing fee, monthly units sold, total monthly PPC spend, total monthly overhead (all non-Amazon operating expenses), and effective tax rate if known. [YOUR DATA HERE]
Product: Silicone Spatula Set (3-piece) Sell price: $24.99 COGS per unit: $6.50 Inbound shipping per unit: $0.85 Amazon referral fee: 15% FBA fulfillment fee: $4.75 Monthly storage fee per unit: $0.12 Return rate: 6% Return processing fee: $3.50 Monthly units sold: 320 Monthly PPC spend: $1,840 Monthly overhead (software, VA, misc): $1,200 Effective tax rate: 28%
Most sellers are surprised by how much their per-unit PPC cost is when they divide monthly ad spend by units sold. Divide your total monthly ad spend by total monthly units — that's your true cost of customer acquisition per unit, and it belongs in your unit economics model.
The difference between contribution margin and operating margin is often larger than expected. A 30% contribution margin business can have a 10% operating margin or less once advertising and overhead are included — which is why "contribution margin" alone can be misleading.
The tax layer is an estimate, not advice. But including it matters: a business with a 12% operating margin at a 25% effective tax rate takes home 9% net — knowing that number shapes how you think about pricing, reinvestment, and growth.
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