This is the full selling price of every unit sold before any deductions. It includes the product price but should exclude Amazon’s fees — those come out below.

Common mistake: Using “net proceeds” from Amazon’s settlement reports as revenue. That number is already net of fees and refunds. If you start with that, your P&L doesn’t have a fees line — they’ve just disappeared into a lower revenue number. Your gross margin will look artificially high. Your expense structure will be invisible.

Amazon auto-processes most refunds. You need to track them separately as a revenue reduction, not just let them net against income. Why? Because the refund rate itself is a metric you should be watching by SKU. A 7% return rate on one SKU is a product problem. It doesn’t show up as a signal if returns are just buried in a lower revenue number.

Gross Revenue minus returns. This is your actual top-line revenue after accounting for product coming back. Use this number — not gross revenue, not proceeds — as your denominator when calculating margins.

The cost of the specific inventory you sold during the period. Not what you spent on inventory — what you sold. Includes product cost, inbound freight, import duties, and prep fees. (For a full breakdown, see the COGS guide for Amazon sellers →.)

What most sellers get wrong here: Using cash-basis accounting. You pay for inventory in February, it arrives in April, you sell it in June. Cash accounting might hit all of that as a February expense. Accrual accounting assigns the cost in June when you actually sold it. One gives you accurate margins. The other gives you chaos.

This is the first real signal of product health. Gross margin = Gross Profit ÷ Net Revenue.

A healthy Amazon FBA business at the 7-figure level targets 35–55% gross margin. Below 35% and every cost downstream — fees, ads, team — becomes a math problem. Above 55% and you have the structural room to grow profitably.

If your gross margin looks strong but your net margin is terrible, the problem is below the gross profit line.

These are the costs Amazon charges you to sell on their platform. They’re not part of COGS — they’re selling expenses. Tracking them separately matters because:

1. You can see your effective fee rate as a percentage of revenue

2. When Amazon raises fees, you can immediately quantify the impact

3. You can compare fee burden across SKUs (oversized products have dramatically higher FBA fees)

Referral fees are typically 8–15% of revenue depending on category. FBA fees vary by size and weight. Together, they often run 20–30% of revenue for standard consumer goods. That’s not a rounding error.

Some sellers add this intermediate line: Gross Profit minus all Amazon fees. It represents what you’re making before you spend a dollar on marketing.

If this number is negative, you have a structural problem that advertising can’t fix. You’re paying Amazon more to sell the product than the product costs to buy.

Amazon PPC spend is a separate line item, not buried in operating expenses. It moves independently of other costs and warrants its own visibility. Track it in dollars and as a percentage of revenue (TACOS).

External traffic — influencer fees, Meta or Google spend driving to Amazon listings — belongs here too if you’re running it.

The number most sellers look at: ACOS (Advertising Cost of Sale based on ad-attributed sales).

The number that actually matters: TACOS (Total Ad Cost of Sale against total revenue). A campaign can have a 30% ACOS and still be drowning your margins if total PPC spend is 25% of revenue.

Revenue minus COGS, fees, and marketing. This is the most useful number for understanding per-unit economics and making product-level decisions. It’s what you actually have to cover overhead and generate profit.

See contribution margin benchmarks for Amazon FBA →

Everything else: software, bookkeeping, accounting fees, team salaries, your own owner compensation (if you’re paying yourself a salary), office costs, professional development.

Operating expenses are largely fixed in the short run, which creates margin leverage as revenue scales — but also a floor below which you can’t drop without cutting into the business.

What’s left. On a good P&L, this is a reliable number because every upstream line is accurate. On a cash-basis, incomplete P&L, it’s a guess.

Seller Central tells you what you sold and for how much. It does not tell you what those units cost. COGS requires your purchase orders, freight invoices, and an accounting system that tracks inventory as an asset. None of that comes from Amazon.

You can estimate this in a spreadsheet. You won’t get it from Seller Central reports. A business with 30 SKUs often has 4-5 SKUs generating all the gross profit while the rest contribute minimally or negatively. You can only see this if you build SKU-level COGS and margin tracking.

Seller Central only goes back so far and doesn’t produce clean P&L comparisons. A proper accounting system does. Year-over-year margin comparisons are how you catch a gradually deteriorating business before it becomes a crisis.

If you’re an S-corp, your salary runs through payroll and shows up in operating expenses. If you’re an LLC taxed as a sole prop, any profit is effectively your compensation — but that’s not the same thing. A P&L that doesn’t account for the economic value of your time is overstating real profitability.