1. Understanding Your Costs
Why Knowing Your Costs Matters
If you want to make a profit selling on Amazon FBA or Etsy, you need to know exactly how much it costs to get your product from your hands into the customer’s. Pricing isn’t just about looking at what others are charging—you have to make sure you’re actually covering all your expenses and still making money.
Breakdown of Common Expenses
Let’s take a closer look at all the costs you might run into when listing and selling your products on these platforms:
| Cost Category | Description | Amazon FBA | Etsy |
|---|---|---|---|
| Production Cost | The cost to manufacture or buy your products (materials, labor, etc.) | ✔️ | ✔️ |
| Packing & Packaging | Bags, boxes, labels, and any special wrapping needed for shipping or branding | ✔️ (often required for FBA standards) | ✔️ (important for unique branding) |
| Shipping to Platform Warehouse/Customer | Getting products to Amazon’s warehouse (FBA) or directly to buyers (Etsy) | ✔️ (inbound shipping fees) | ✔️ (outbound shipping fees set by you or paid by customer) |
| Platform Fees | The percentage or flat fee each platform charges per sale (listing + transaction fees) | Referral fee, FBA fee, storage fee, etc. | Listing fee, transaction fee, payment processing fee |
| Other Costs | Advertising, returns, damaged goods, subscription fees, etc. | Sponsored ads, removal order fees, monthly seller plan | Etsy ads, optional shop upgrades |
Quick Example: How Costs Add Up on Each Platform
If you’re selling a handmade candle, here’s what your expense list might look like:
- Production: $3.00 per candle (wax, wick, jar)
- Packing: $0.75 per candle (box + label)
- Shipping: $0.50 per candle to Amazon warehouse OR $4.00 per order shipped to customer via Etsy
- Amazon Fees: $2.10 referral + $2.50 FBA fulfillment = $4.60 per sale (varies by item size/weight)
- Etsy Fees: $0.20 listing + 6.5% transaction + 3% payment processing ≈ $1.45 on a $15 sale
- Total Cost Example:
- Amazon FBA: $3.00 + $0.75 + $0.50 + $4.60 = $8.85 per candle sold
- Etsy: $3.00 + $0.75 + $4.00 + $1.45 = $9.20 per candle sold
The Takeaway: Know Your Numbers Before You Set Your Price!
If you don’t add up every cost that goes into getting your product to the buyer—from materials and shipping to those little platform fees—it’s easy to end up working hard for zero profit or even a loss. Grab a notebook or spreadsheet and start writing down every penny you spend for each item so you can price with confidence!
2. Researching the Market and Competition
Analyze What Similar Products Are Selling For
If you want to price your products for profit on Amazon FBA and Etsy, the first step is to check out what similar products are selling for. This gives you a clear idea of the current market rates and helps you find a competitive yet profitable price point. Start by searching for products like yours on both platforms. Make note of their prices, shipping fees, and any special offers.
| Platform | Average Price Range | Shipping Fees | Special Offers |
|---|---|---|---|
| Amazon FBA | $18 – $25 | Free with Prime / $3-$5 standard | Coupons, Bundles |
| Etsy | $22 – $30 | $4 – $8 standard | Discount Codes, Custom Orders |
Identify Your Target Customer
Knowing who your customer is will help you set the right price. Think about their age, interests, budget, and shopping habits. For example, if you sell handmade jewelry on Etsy, your target customer might be someone who values unique designs and is willing to pay a bit more for quality. On Amazon FBA, shoppers might be looking for deals or quick delivery.
Target Customer Checklist:
- What is their typical age group?
- Are they looking for value or luxury?
- Do they shop for themselves or as gifts?
- What features are most important to them (e.g., fast shipping, customization)?
- What price range do they usually buy in?
Use Tools to Gauge Price Trends
You don’t have to guess what’s happening in the market—use tools designed to make research easier:
- CamelCamelCamel: This tool tracks price history on Amazon. You can see if prices are trending up or down and spot the best times to list at higher prices.
- EtsyRank (now called eRank): Great for Etsy sellers! It shows you top-selling products, trending keywords, and average prices so you can adjust your pricing strategy.
Example: Using CamelCamelCamel & eRank Data
| Tool | Main Feature | How It Helps With Pricing |
|---|---|---|
| CamelCamelCamel | Amazon price history tracking | See when competitors drop or raise prices; time your own price changes for max profit. |
| eRank (EtsyRank) | Etsy product analysis & keyword trends | Find top-selling items and set your price within a profitable range based on real data. |
By researching the market and understanding your competition, you’ll be able to set smart prices that attract buyers and boost your profits on both Amazon FBA and Etsy.
3. Choosing the Right Pricing Strategy
When selling on Amazon FBA and Etsy, finding the perfect pricing strategy is key to making your products stand out and stay profitable. There’s no one-size-fits-all solution, so let’s break down some of the most popular pricing tactics used by successful U.S.-based sellers.
Cost-Plus Pricing
Cost-plus pricing is straightforward: you calculate your total costs (including production, shipping, Amazon/Etsy fees, and packaging) and then add a markup to make a profit. This method ensures you always cover your expenses, but it doesn’t always consider what customers are willing to pay or what competitors charge.
Example:
| Item | Cost |
|---|---|
| Product Cost | $10 |
| Packing/Shipping | $3 |
| Amazon/Etsy Fees | $4 |
| Total Cost | $17 |
| Add 30% Markup ($5.10) | $22.10 (Final Price) |
Value-Based Pricing
This strategy focuses on what your product is worth to customers rather than just how much it costs to make. If your product solves a problem or offers something unique (like handmade craftsmanship or eco-friendly materials), you can often charge more. Research your target audience and highlight your value in your product descriptions.
Tips for Value-Based Pricing:
- Survey customers about what they’d pay
- Highlight unique features in listings
- Monitor reviews for insights into perceived value
Competitive Pricing
With competitive pricing, you look at what similar products are selling for on Amazon and Etsy, then set your price to match or slightly undercut those listings. This is common in crowded markets where shoppers compare options side by side. Be careful not to start a race to the bottom—focus on offering better quality or service instead of just lowering your price.
Competitive Pricing Table Example:
| Your Product | Main Competitor A | Main Competitor B |
|---|---|---|
| $19.99 (with free shipping) | $21.50 (+$2 shipping) | $18.75 (no returns accepted) |
Which Pricing Strategy Is Best?
The right strategy depends on your brand and products. If you have a unique handmade item, value-based pricing might help you earn more profit. For everyday items with lots of competition, competitive pricing may be necessary. Many successful sellers use a mix—starting with cost-plus as a baseline, then adjusting based on value and market trends. Test different strategies and keep an eye on sales data so you can tweak prices when needed.
4. Factoring in Profit Margins and Fees
When you’re selling on Amazon FBA or Etsy, setting the right price isn’t just about covering your product cost. It’s about making sure you actually make a profit after all the platform fees, shipping, returns, and any marketing spend. Here’s how to figure out your real costs and set price points that keep your business healthy.
Understand All the Fees
Both Amazon FBA and Etsy charge different types of fees. These can really eat into your profits if you don’t factor them in from the start. Here’s a quick breakdown:
| Platform | Main Fees | Typical Amounts |
|---|---|---|
| Amazon FBA | Referral fee FBA fulfillment fee Storage fee |
8%-15% per sale $2.50+ per item (varies by size/weight) Monthly rate per cubic foot |
| Etsy | Listing fee Transaction fee Payment processing fee |
$0.20 per item 6.5% per sale 3% + $0.25 per transaction |
Don’t Forget Shipping and Returns
If you offer free shipping, remember to include that cost in your pricing. Even if buyers pay for shipping, some platforms take their percentage from the total (including shipping). Also, factor in occasional returns—these can add up over time.
Add Promotional Costs
If you plan to run ads or offer discounts, these promotional costs should be included in your calculations. For example, Amazon PPC (pay-per-click) or Etsy ads can help sales but will reduce your margin.
Calculate Your Target Profit Margin
A healthy profit margin varies by industry, but most sellers aim for at least 20-30% after all expenses. Here’s a simple formula:
Pretend Example Calculation:
| Description | Cost ($) |
|---|---|
| Product cost | $10.00 |
| Amazon/Etsy fees (avg.) | $4.00 |
| Shipping cost | $3.00 |
| PPC/Promo cost (avg.) | $1.00 |
| Total costs | $18.00 |
| Your selling price | $25.00 |
| Your profit ($) | $7.00 |
| Your profit margin (%) | 28% |
Tip: Build in a Buffer
Unexpected costs pop up—damaged goods, higher return rates, or rising shipping fees. Add a few extra dollars to your price as a safety net.
5. Adjusting Prices for Growth and Customer Loyalty
Why Adjusting Prices Matters
If you want your Amazon FBA or Etsy business to grow, it’s important to keep your pricing strategy flexible. The right price changes can help you attract new buyers, reward loyal customers, and boost your sales volume. Let’s break down some smart ways to do this.
When to Offer Discounts
Discounts are a great way to encourage purchases, but timing is key. Here are common situations when offering a discount works well:
| Situation | How It Helps |
|---|---|
| New Product Launch | Attracts first-time buyers and builds initial momentum. |
| Seasonal Promotions | Taps into holiday shopping and special occasions. |
| Slow Sales Periods | Moves inventory and keeps cash flow steady. |
| Loyalty Rewards | Makes repeat customers feel appreciated. |
Running Sales the Right Way
Sales events create urgency and excitement. Here are a few tips:
- Time-Limited Sales: Use countdown timers on Amazon or time-sensitive coupons on Etsy to motivate quick action.
- Seasonal Events: Black Friday, Cyber Monday, and back-to-school season are big in the US—plan special deals for these times.
- Email Announcements: Let your customers know about upcoming sales through your email list or shop updates.
Implementing Bundling Strategies
Bundling means selling two or more products together at a special price. This not only increases your average order value but also introduces customers to more of your items. Here’s how bundling compares to other tactics:
| Tactic | Main Benefit | Best For |
|---|---|---|
| Discounts | Quickly boosts sales volume, attracts bargain hunters. | Clearing inventory, attracting new shoppers. |
| Sales Events | Create urgency, increase traffic during peak times. | Holiday seasons, store anniversaries. |
| Bundling Products | Raises average order size, exposes buyers to more products. | Loyalty building, launching complementary items. |
Popular Bundling Ideas:
- Themed Gift Sets: Combine related products for holidays or special occasions (e.g., candle + bath salts for Mother’s Day).
- Bestseller Combos: Pair your top-selling product with a newer item at a discount.
- Add-On Deals: Offer small add-ons (like a sticker or sample) at a lower price if bought with another product.
Cultivating Repeat Customers Through Pricing Tactics
The goal isn’t just one sale—it’s keeping customers coming back. Consider using loyalty discounts or exclusive offers for past buyers. On Etsy, send thank you coupons after a purchase; on Amazon, use promotions targeted at repeat customers. These small gestures build trust and long-term loyalty for your brand.
