MarginDriver pulls the actual order fees and refunds from the Amazon Marketplace Web Services (MWS) API for Amazon orders, eliminating the need to rely on user-generated estimates entered on the Fee and Currency Settings page.

Nonetheless, it is advised that users still enter an estimated value in the Sales Channel Selling Fee field on the Fee and Currency Settings page as it is used as the default sales commission value until the actual Amazon commission amount can be retrieved from the Amazon API (usually not more than few hours after the order is placed on the marketplace). This ensures close to accurate immediate results in the So Far Today reports and dashboard. The Credit Car Fee field and the Refund/General Allowance Fee field should be set to 0.0% on all Amazon channels.

What Fees Does MarginDriver Pull from the Amazon API?

MarginDriver retrieves all fees that are found in the user's biweekly Amazon Settlement Reports and applies them appropriately to each order. This includes fees that can be attributed directly to specific orders, such as the Amazon sales commission, as well as those that are applied to the entire account, such as FBA transportation and storage fees.

MarginDriver classifies these fees as either Direct Fees or Indirect Channel Fees.

Direct Fees

Indirect Channel Fees

These are fees that are charged for services that cannot be attributed to specific Amazon orders. The total of such fees from Settlement Reports issued over the last 30 days is divided by the total number of channel orders from the last 30 days to arrive at a per order 30-day running average that is added to the Fees and Allowances column of each channel order.

Examples include:

FBA Storage Fee - Fees & Allowances

FBA Weight Based Fee - Fees & Allowances

Advertising - Fees & Allowances (itemized separately in MarginDriver - see below for an explanation)

FBA Inbound Shipping Cost - Fees & Allowances (calculated and itemized separately in MarginDriver - see below for an explanation)

Calculation and Allocation of Amazon Fees

Below is a sample FBA order (order #119-9625422-3501027) with the Shipping Cost and Fees & Allowances broken down by their component parts.

Fees Applied to the MarginDriver Shipping Cost Column

Sellers who use FBA or purchase their postage directly from Amazon will find these charges in the Shipping Cost column.

FBA Per Unit Fulfillment Fee

The FBA cost to ship is referred to as the FBA Per Unit Fulfillment Fee ($5.80 in the Order Number 1880556 example above).

Shipping Chargeback

If an Amazon customer is charged an additional shipping fee for expedited shipping, the fee is applied to the seller's Shipping Revenue and a Shipping Chargeback in the same amount is applied to the Shipping Cost. The Shipping Chargeback is deducted from the seller's payout from Amazon canceling out the shipping fee paid by the customer. A separate FBA Per Unit Fulfillment Fee will still populate the Shipping Cost column for FBA orders.

Fees Applied to the MarginDriver Fees & Allowances Column

Commission

Direct Fees can be attributed to specific Amazon orders and appear in either the Shipping Cost column or the Fees & Allowances column in the Gross Profit Reports for the corresponding order. The Amazon sales commission is generally the only Direct Fee applied to the MarginDriver Fees & Allowances column, with a few rare exceptions.

Indirect Channel Fees

MarginDriver adds all Indirect Channel Fees charged on Amazon Settlement Reports issued in a calendar month and divides that figure by the total number of channel orders in the same calendar month. The resulting value is applied to each order on that sales channel in the same calendar month. That same value is also applied to orders in the following month until the same month-end calculation is performed and the actual value is retroactively applied.

Cost of Advertising

Amazon advertising costs that appear on Amazon Settlement Reports are applied to the fees of each order according to the same logic as the Indirect Channel Fees.

Example Calculation of the Cost of Advertising for an Order Placed on January 24

FBA Inbound Shipping Cost

FBA Inbound Shipping Cost are calculated and itemized separately in MarginDriver reports because these fees are assessed according to the weight and volume of the items sent to FBA fulfillment centers. Thus large items are more expensive to ship to Amazon than small items. Equal application of these costs to all orders would fail to acknowledge this and bias gross profit results in favor of larger items.

To address this concern, MarginDriver estimates the average FBA Inbound Shipping Cost of a given item based on it's historical outbound shipping cost, the FBA Per Unit Fulfillment Fee.

Some MarginDriver users use the Advanced SKU Analytics (under Products and Categories) and Order Analytics features to evaluate the profitability of individual items. The independent calculation of FBA Inbound Shipping Costs according to the relative shipping cost of the item, gives users a much more accurate picture of each item's performance in terms of profitability.

For example, let's calculate the FBA Inbound Shipping Cost for US-WU767 from the example above.

Amazon charges the user an FBA Per Unit Fulfillment Fee to pack and ship US-WU767 to the customer who buys it from the seller. MarginDriver references the seller's Amazon fee history to calculate the average FBA Per Unit Fulfillment Fee for US-WU767 and then estimates the FBA Inbound Shipping Cost to be 20% of that value. (Please reference the Amazon Settlement Report page in the Knowledge Base for an explanation of how MarginDriver reconciles FBA Inbound Shipping Cost for accounting purposes).

Example Calculation of FBA Inbound Shipping Cost

SKU: US-WU767

FBA Per Unit Fulfillment Fee: $5.80

Percentage of FBA Per Unit Fulfillment Fee: 20%

Estimated FBA Inbound Transportation Cost = ($5.80 x .20): $1.16

**Note that there is frequently a difference of a few cents in these calculations due to the many instances of rounding that occur in MarginDriver's calculations.

Final Calculation of the Fees & Allowances Column

Commission: $6.75

Cost of Advertising: $0.51

FBA Inbound Shipping Cost: $1.12

Indirect Channel Fees: $1.39

Fees & Allowances Total = $9.77