Any Amazon seller knows that calculating your profit and loss can be complicated. Because data within Amazon is often siloed or incomplete, you might have trouble understanding your complete P&L from both an account and SKU level.
Kapoq’s Director of Product Development, Courtney Taylor, sat down to talk in-depth about how to calculate P&L on Amazon, and everything you need to take into consideration!
How to Calculate P&L on Amazon
To calculate your P&L on Amazon, at its most basic, you subtract your expenses from your revenue.
This gets a little confusing in Amazon due to when payments are released, what qualifies as income, and what counts as an expense.
Examples of income:
- Sale Price
- Shipping Revenue
- Removal Order – Reimbursement
- Lost Inbound Shipment – Reimbursement
- Damaged Warehouse Product – Reimbursement
- Incorrect Product Return – Reimbursement
Examples of expenses:
- Amazon Subscription Fee
- Amazon Commission
- FBA Per Unit Fulfillment Fee
- FBA Inbound Transportation Fee
- FBA Storage Fee
- Product Ads Fee
What are the Differences between Vendors and Sellers?
Vendors
Unfortunately building an automatically updating view of your P&L is difficult for Vendors because there’s no API that provides financial information for Amazon’s 1P businesses. If you’re looking for a P&L statement as a Vendor, you’ll have to build and maintain it manually.
This means that technology like Kapoq can’t get all the different pieces to populate the data. Our team is working to figure out way for Vendor users to provide us with data that we don’t have to give them some P&L estimates — stay tuned!
Sellers
Sellers, on the other hand, are given access to the data needed to construct a P&L view for your business. However, it’s incredibly complex due to all the different timing rules and changes on Amazon’s end. Pulling the transaction reporting by hand in Amazon and then trying to get that information into an easily-digestible P&L is both manual and time-consuming.
Additionally, some information that is critical to calculating your profit and loss is not available within the finance API:
- Cost of Goods (would require you to provide this information to Amazon)
- PPC Advertising (only available in finance API if you pay it through your Seller Balance, not a credit card)
- External costs (such as agency fees, which Amazon doesn’t have access to)
To combat some of these challenges, Kapoq built our accounting module that calculates your P&L automatically. There are two views for P&L within Kapoq: margin details by month (at the account level) and margin details by SKU (at the item level).
Margin Details by Month
Within Kapoq, you can view your P&L at an overall account level, which also allows you to view data across multiple accounts by selecting multiple accounts using the Account filter. At this level, you can view all fees from the account level, including FBA storage fees and long-term storage fees.
For the most accurate information, you’ll need to upload your COGs to Kapoq. Within Kapoq, you can set an account level COGs percentage based off of list price, or bulk upload percentage or currency value COGs by SKU. Kapoq will never share your COGs with Amazon, so you can know your sensitive pricing data is secure.
Margin Details by SKU
It is also possible to calculate your P&L for individual SKUs, which can help you understand how each of your products are performing at a granular level over time. To calculate margin details by SKU, you will also need to upload your COGs.
It’s important to note that Amazon does not include certain account fees at this level, such as FBA storage fees and long-term storage fees. Kapoq utilizes the FBA Storage Fees and FBA Long-Term Storage Fee Charges reports via API to get this information at the item level for the Margin Details by SKU view.
What about Deferred Transactions?
As most Amazon Sellers know, in late 2024 Amazon implemented deferred transactions, which has affected how soon Sellers receive payments from a transaction. How Amazon calculates the dates of the sale can cause confusion when calculating your P&L.
Deferred transactions act as placeholders until Amazon releases them as standard transactions. Amazon’s reasoning behind this is to ensure that there are enough funds to cover potential returns, claims, and chargebacks. When this happens:
- The balance is removed from Deferred Transactions and added to Standard Orders.
- These transactions then follow the Transaction Posted Date payout model.
These transactions are held for 7 days after the delivery date, which can really make cash flow difficult, especially when calculating your P&L.
It’s fair to say that Amazon’s payment structure—especially with deferred transactions—creates challenges. However, Kapoq’s consistent methodology ensures accuracy by reflecting actual cash flow. Kapoq currently doesn’t have API visibility into when specific deferred transactions are released, but we’re working with Amazon to add them in to give you a more complete insight into your P&L.
Never calculate your P&L manually again—sign up for your free demo of Kapoq today.
