Good business, bad business: comparing two Amazon P&L stories

As a brand owner, Amazon can feel like your biggest competitor. Ever-changing distribution goalposts. The Featured Offer. Fuel surcharges. Death by a thousand fees. You're trying to keep up and outpace other operators while protecting your margin, and it's a time suck. I get it.

At the same time, the reality is this: we're all in the same FBA boat. It's complex, but it doesn't have to be convoluted. At the end of the day, the difference between good business and bad business often boils down to one or two line items in your monthly report.

What I'll show you here is two brands in the same category, with the same revenue. One represents good business. The other one, not so much. The only difference between them at the end of the month? $15,376 in take-home.

Same revenue, different business

The scenario: two supplement brands sell the same product at the same price. We'll call them Brand A and Brand B. Both moved 4,733 units during a non-peak month. One ended up with 12.5% more in net margin.

Product specifics

• Container: 60-count capsule bottles

• Price: $25.99 each

• FBA sizing: Small standard size tier, about 6 oz packed

The method

P&L overview analysis. By reviewing each line side by side, we can easily see what went wrong between the two supplement brands. And it comes down to two categories: the one everyone watches, and the one almost nobody models.

Disclaimer: Both companies listed are illustrative only. This table is built from industry-standard numbers for supplement brands bringing in $1M to $2M annually.

Walking down the two P&Ls

To maximize Amazon FBA profit, you need to analyze every line. These brands are almost identical, with two major differences in unit economics. Let's break down each category, line by line.

Off-peak month P&L statements for Brand A (good business) vs. Brand B (bad business)

Revenue

$123,011 is the starting point for both brands. 4,733 units sold at $25.99 each. Not bad for an off-peak month, but this number doesn't actually tell us which business is doing well.

Referral fee

Amazon's mandatory commission model. They take a cut in exchange for their massive consumer audience. As of January 2026, the Beauty, Health and Personal Care referral fee is "15% for items with a total sales price greater than $10.00." Both brands take a $3.89 hit per unit.

Fulfillment (FBA fee + surcharge + inbound)

Another $4.02 owed to Amazon per unit. This total includes:

• A $3.45 FBA fulfillment fee. Both brands' supplements are charged in the 2026 non-peak, small standard, $10 to $50 price band.

• A universal fee of 3.5% for FBA fuel and logistics, as of April 17, 2026. This surcharge = $0.12 per unit.

• An FBA inbound placement service fee of $0.45 per unit.

Storage

Both companies face the same base storage rates. The difference is how much each one keeps on the shelf. Brand B holds 2x as many units at the fulfillment center, and overstock costs more than shelf space. Double the units means double the base storage fee. Inventory that sits too long picks up an aged inventory surcharge, a heavier footprint pushes the storage utilization ratio surcharge higher. All in, Brand B paid $7,381 in storage and inventory fees, four times Brand A's $1,845, and 4.5 more revenue points than Brand A.

Getting out of overstock costs money too. Since March 1, 2026, Amazon charges removal and disposal fees as units are processed. Its FBA Liquidations program recovers only about 5 to 10% of a product's average selling price, which turns a $25.99 bottle into roughly $1.30 to $2.60.

Running lean has its own price, so Brand A can't get careless either. When a product's historical days of supply falls below 28 days, measured over both the last 30 and the last 90 days, Amazon adds a low-inventory-level fee to every unit it ships. For a small standard bottle like these, that's $0.32 to $0.89 per unit, and the fee climbs as supply gets thinner. Good business isn't minimal inventory. It's inventory planned to the sell-through rate.

Returns

All products with a high return rate (except shoes and apparel) are subject to an additional processing fee. Luckily, Brands A and B both fall below the 5.5% return rate threshold for Beauty, Health and Personal Care. Neither business is raking in extra fees in this category. Each sets aside the expected 5% of revenue, or $6,151, for returns.

Ad spend (TACoS)

Here's where the numbers start to diverge more meaningfully. We're stepping away from Amazon FBA profit and into operator-specific decisioning. This category is not the same as an ACoS analysis. Regardless of PPC performance, Brand B spent $9,840 more on TACoS this month. That's 8 more revenue points than Brand A.

Cost of goods (landed)

Another identical split. Both companies' landed cost of goods was $30,753. This category includes freight, import duties, inspections, and anything else involved in transporting the supplements to Amazon's FC.

Contribution margin

After subtracting variable costs from revenue, Brand A has a contribution margin of $34,482, compared to Brand B's $19,106.

Fixed overhead

Payroll, office space, legal, VAs, insurance…all the indirect costs of running a business are subtracted from contribution margin here. Both brands owed $14,000 in this category.

Take-home

This is the most important category in determining which brand represents good business. After subtracting all fixed and variable costs from revenue, Brand A's take-home was $20,482. Brand B ended the month with just $5,106.

The lines that decided it

Well, it's no mystery. Where did Brand A's additional $15,376 net margin come from? Which lines made all the difference?

Ad spend and overstock.

Brand A dedicated 10 revenue points to ads ($12,301) and 1.5 to storage ($1,845).

Brand B dedicated 18 revenue points to ads ($22,141) and 6 to storage and inventory fees ($7,381).

Sometimes, pouring more resources into TACoS works out, but there's no need to overcomplicate this scenario with hypotheticals. Brand B's decision to spend $9,840 more on advertising did not improve profitability. Neither did the extra $5,536 it paid to store inventory it couldn't sell yet. Plain and simple. Those additional 12.5 revenue points, combined with Amazon's share of the pie (36.5% for referral fees, fulfillment, and storage), left Brand B with a meager 4.2% take-home.

For an established brand owner, these two categories can make a huge difference month-to-month. In this scenario, Brand A is good business. They've figured out how to balance ad spending and inventory with fulfillment, fixed overhead, and a landed cost of goods.

How to run this on your own numbers

The question now is, "Which business does mine most resemble: Brand A or B?" Run a similar exercise with your P&L to find out what your average take-home is, and which line, if any, is moving you toward (or away from) a bigger Amazon profit. If you're not sure on the specifics, it's time to find out.

This week, use a Take-Home Calculator to take stock of your business. (Remember to include Peak Fees where applicable if you're analyzing a past month between October 15 and January 14.) This calculator uses the same 10 P&L categories from the example table above:

• Revenue

• Referral fee

• Fulfillment (FBA fee + surcharge + inbound)

• Storage

• Returns

• Ad spend (TACoS)

• Cost of goods (landed)

• Contribution margin

• Fixed overhead

• Take-home

Whether you're overspending on TACoS like Brand B, sitting on more inventory than you can sell, or running so lean you're paying low-inventory fees, we can usually point to one or two areas that need a closer look.

As a fellow operator, my advice is to find out what's holding you back from better outcomes this quarter. Figure out whether your business is good business, and redistribute revenue points accordingly.