That $30 sale? You're keeping about eight quid.

You get the notification. Someone bought your product for $29.99. Feels great. Money in the bank. Except the marketplace takes a cut. Then there's the fulfilment fee. Then storage. Then you realise you spent $3 on ads to make that sale happen.

By the time all the hands come out of your pocket, you're left with somewhere between $3 and $8 per unit. And if you don't know which end of that range you're on, you're guessing at profitability.

The fee stack nobody reads properly

Every marketplace sale gets nibbled by a series of charges. Here's the typical damage:

Referral fees — the marketplace's commission for existing. Usually 8-15% depending on your product category. Electronics gets a gentler 8%. Home & Kitchen, the most popular FBA category, cops 15%.

Fulfilment fees — if you're using FBA or equivalent, you pay per unit based on size and weight. A small item under 500g might cost $3-4. A standard 1kg item runs $4.50-5.50. Anything large or heavy? $6-15+. These fees go up basically every year.

Storage fees — monthly rent for your inventory sitting in the warehouse. Around $0.75-1.00 per cubic foot normally, jumping to $2.40-3.60 during Q4. Leave stock there more than a year and you'll get hit with long-term storage charges that can exceed the product's value.

Advertising — technically optional. Practically mandatory for visibility. Most sellers spend 8-15% of revenue on sponsored ads just to maintain their position. For new products, it's often higher.

The extras — return processing fees, removal fees if you need to pull inventory, label/prep charges, monthly subscription. None of them huge individually, all of them real.

What the actual maths looks like

Let's trace a $29.99 kitchen product through the fee grinder:

Not terrible. But notice what happened — if you'd estimated profit as $29.99 minus $8.50 landed cost, you'd have thought you were making $21.49 per unit. The real number is less than half that. On 1,000 units, that's the difference between thinking you made $21,490 and actually making $8,440.

The numbers to actually watch

Contribution margin — what each sale contributes after all variable costs. This is the real number. Revenue minus fees minus landed cost. If this is positive, the sale is helping. If it's negative, every additional sale makes things worse.

ROI on inventory — profit divided by landed cost. If you invested $8.50 and made $8.44 back, that's a 99% ROI. Anything above 50% is generally considered healthy for marketplace selling.

Break-even units — how many do you need to sell per month to cover your fixed costs (subscription, tools, warehouse, your time)? If fixed costs are $2,000/month and you make $8.44 per unit, you need 237 sales just to break even.

ACoS (Advertising Cost of Sale) — ad spend divided by ad revenue. 10% is decent. 25% might still work if your margins are fat. 40% means your ads are eating your profit. The key question: after ads, does the remaining margin still cover your landed cost?

What quietly destroys margins

Slow inventory. Storage fees accumulate month after month. After 6 months, you've paid more in storage than some products are worth. And that's before long-term storage surcharges kick in. If something isn't selling, get it out — even at a loss, it's often cheaper than paying rent.

Returns. Depending on your category, 5-25% of sales come back. Each return costs you the original fulfilment fee, a returns processing fee, and often the product can't go back on the shelf at full price. Bake your expected return rate into your profitability model from day one.

The price race. When competitors undercut you, it's tempting to follow them down. But cutting your price by 10% on a product with 28% margins means 36% less profit per unit. If the competitor is doing it sustainably, they have a structural cost advantage. If they're not, they'll burn out eventually — but you might too if you follow them.

Annual fee increases. Marketplaces raise fees regularly. If your product only works at current fee levels, the next increase will push it underwater. Build at least 3-5% headroom into your margin calculations.

Know where every product stands

Not every product needs to be a star performer. A healthy portfolio has a mix:

• Stars (~30%): High volume, strong margins. These are the engine.
• Steady earners (~40%): Moderate volume, decent margins. Reliable income.
• Test products (~20%): New items you're trying. Accept lower margins while you learn.
• Underperformers (~10%): Low volume, thin margins. Cut these before they drain cash.

The only way to know which category each product falls into is accurate, per-unit profitability. Not averages, not estimates — real numbers for every SKU, every month. That's what separates the sellers who scale from the ones who wonder why they're busy but not profitable.