How to breakout of fee hell
Example : I made £100 yesterday selling on Amazon. I sell dog poo bag rolls. With a ROAS 3.24. Yay me. However, Amazon will take 45% in fulfilment fees. So I'm left with £65 To get the £100 of sales I need to spend £30 on advertising so I end up with £35
If I extrapolate this over the quantity I need to sell then I make less than what it cost to buy the product in the 1st place. I bought 1500 units
I would make £5k in profit and it cost me £8k to buy the product wholesale
Do you work on ROAS to increase it? I can't reduce Amazon fees as most are postage cost. So what am I missing. How do people break through to make more money to buy in bigger quantities to sell more?
How to breakout of fee hell
Example : I made £100 yesterday selling on Amazon. I sell dog poo bag rolls. With a ROAS 3.24. Yay me. However, Amazon will take 45% in fulfilment fees. So I'm left with £65 To get the £100 of sales I need to spend £30 on advertising so I end up with £35
If I extrapolate this over the quantity I need to sell then I make less than what it cost to buy the product in the 1st place. I bought 1500 units
I would make £5k in profit and it cost me £8k to buy the product wholesale
Do you work on ROAS to increase it? I can't reduce Amazon fees as most are postage cost. So what am I missing. How do people break through to make more money to buy in bigger quantities to sell more?
27 replies
Seller_j30KQjgEjnF6v
Chat GPTs answer :
🧮 Step 1: Understand Where the Money Is Going
Let’s restate your example:
Item Amount (£) % of Sales
Sales (Revenue) £100 100%
Amazon fees (fulfilment, referral, etc.) £45 45%
Advertising (PPC) £30 30%
Leftover (Gross Profit before product cost) £25 25%
Product cost ~£40–£50 (based on your example) 40–50%
Actual profit per £100 sold -£15 to -£25 Loss
That’s why your £8k investment in stock would lose money if your metrics stay the same.
🚨 Step 2: Identify What’s Actually Killin’ You
Amazon FBA fees are brutal but mostly fixed. They’re hard to move unless your product changes shape, size, or weight.
So your real levers are:
Advertising efficiency (ROAS)
Product cost (COGS)
Product pricing / perceived value
Let’s break those down.
💡 Step 3: Work on the Levers You Can Control
1. Advertising / ROAS
ROAS 3.24 means you get £3.24 in revenue for every £1 in ad spend.
That’s actually decent in many niches — but not if your margins are 25%.
👉 Your goal is not just higher ROAS, but lower ACOS (Advertising Cost of Sales).
ACOS = ad spend / sales.
At ROAS 3.24, your ACOS is ~31%.
You need it closer to 10–15% for your margin structure.
How to improve ROAS / lower ACOS:
Kill unprofitable keywords ruthlessly.
Use negative keywords to avoid waste.
Focus ads on high-converting search terms (“eco-friendly dog poo bags” > “dog bags”).
Improve listing conversion rate — if your page converts better, you can spend less to get sales.
Consider outside traffic (TikTok, Insta, Google) if Amazon PPC is too costly.
2. Product Cost (COGS)
You said you paid £8k for 1500 units → £5.33 each.
To survive Amazon’s ecosystem, you generally need your landed cost (including shipping) to be < 25–30% of sale price.
If your average sale price is £10–12, you’re way above that.
Options:
Negotiate with supplier or find new ones (Alibaba, 1688, global sources).
Simplify packaging to reduce weight (smaller = lower FBA fee).
Bundle products (e.g., “3 rolls + dispenser”) to justify a higher price.
3. Product Price / Perceived Value
If your product is a commodity, you’re in a race to the bottom.
But if you turn it into a brand, you can double your price.
Example:
“Dog poo bags” = £10 product.
“Eco-friendly compostable bamboo-scented bags for conscious pet owners” = £14–16 product.
The same unit, different value story.
That extra £4 can be the difference between loss and profit.
⚙️ Step 4: Think in Systems — Not Units
You’re stuck in unit economics, but the pros scale through brand systems:
Stage Strategy Goal
0–100 sales/day Optimize PPC, listings, images Reach breakeven
100–500/day Build brand, get reviews, improve conversion Create margin cushion
500+/day Outsource fulfilment, negotiate with suppliers Reduce COGS, reinvest profits
You can’t just “sell more” — you must increase margin before scaling, or you’ll lose more money faster.
💰 Step 5: Realistic Targets to Escape Fee Hell
Metric Where You Are Goal
Amazon fee % 45% Unchangeable (~40–45%)
Advertising (ACOS) 31% <15%
Product cost % ~50% <25–30%
Profit margin Negative +20–25%
To do that, you need two or more of:
Cheaper sourcing
Higher sale price (branding, bundles)
More efficient ads
🧭 Step 6: Next Steps You Can Take This Week
Audit your PPC data – find keywords with high spend / low conversion, pause them.
List optimization – better title, bullet points, infographics, and reviews to improve conversion.
Contact 3–5 alternative suppliers – get new quotes at 20–30% lower price.
Bundle or rebrand – test a higher price point.
Model your unit economics in Excel – know your break-even ACOS and profit at different price points.
If you’d like, I can help you:
Build a simple profit simulator (Excel or Google Sheets) where you plug in fees, price, ROAS, etc., to see profit instantly.
Or, help you brainstorm rebranding ideas to justify a higher price point for your dog bags.
Seller_zKEt2RiaID5EU
Hello Chargecore.
Fully understand you here.
Personally, a ROAS of 3.24 is way too high. Currently, my store runs on a 13% ACOS, which is a ROAS of around 8-9.
The only way I would get a ROAS of 3 would be to initially boost sales to drive up my BSR and organic ranking, then slowly decrease my bids until I reach my target of 8-9.
Personally, I believe slow and steady wins the race. Instead of selling £100.00 a day and making nil profit due to extortionate advertising fees, I'd rather sell £50.00 a day and make a lot more profit, and as your organic ranking increases then youll find that even on a 8-9 roas you will eventually get back to that £100.00 a day, this can take a while tbhough, and a while meaning a year sometimes.
Looking at your actual listing.
Things to consider -
Increase the length of your title with keywords, you can have up to 250 characters - get some more keywords, especially put your brand name in there, so something like Margo Pop Biodegradable Dog poop Bags - 36 Rolls - Long Lasting 9 month supply - Extra thick - Non Leak.... etc look at competitors and learn from their keywords.
Need more high-quality images with infographics. You have terms like 'Fort Knox for faeces' in your bullet points, which I think are amusing, but you haven't got an infographic with that on it. People like images and relate to them. - Also, Professor Wagsalot is GREAT, get an image of him holding your poo bag with an infographic saying these are great or something, this makes people laugh and relate to your product, creating higher conversion.
You can't put a+ on your listing because your brand is "generic" so I would seriously consider getting Brand Registered. From there you can create A+ content and also a brand story which can really highlight your ECO packaging.
VINE Reviews - this is expensive, it's going to cost you £120.00, but if your product is genuinely good and you believe in it, then that will get you 30 reviews, hopefully 4+ stars.
All of the above is intended to increase your conversion rate when users click your advertisement.
This is a start, but I hope it helps—the key points are to enhance the overall listing / look to achieve a higher conversion rate and lower ACOS/ROAS.
Elliot
Seller_j30KQjgEjnF6v
Hi Elliot,
I had a bit of play and checked out your stores infographics...nicely done. Keen to get your feedback on my new infographic on the 2nd image page.
I will be coming out with branded bags and a branded store very soon so this listing is really to learn what to do and not to do so when I launch it will be on point.
Really, really appreciate your feedback earlier.
Seller_zKEt2RiaID5EU
Hello ,
Usually, any image / text changes take around 12 hours to take effect on Amazon.
When it's updated tomorrow, I'll have a look for you.
Elliot
Seller_zKEt2RiaID5EU
Hey Chargecore, Yes alot better Title, also good you changed it from poop to poo as there's alot higher search volume for "Poo Bags"
I would aim for at least 6-7 images.
Elliot
Seller_j30KQjgEjnF6v
Thankyou. I just wondered if you use automatic or manual campaigns? If manual, do you perfer keyword or product targeting?
Honestly, the 18 year old me if he could see me now talking about types of advertising on a Thursday night....LOL
Seller_zKEt2RiaID5EU
It depends on your strategy,
Keywords will usually deliver the best ROAS. Product targeting should only be used when you have a listing which is as good as it can be, because that person is likely on a listing similar to yours, and if yours looks worse, they're just going to go back and buy the other one, if you have multiple listings product targetting is really good to target your own listings, this makes it so if they are going to click off of a listing, theyre clicking back on to something you have created.
Keywords-wise, if you're not used to advertising, you can blow through a budget in half a day. There a lot of information on YouTube thats free that can help you with this, but whats really important is that you pick an ACOS/ ROAS that you want. You stick to that, so even if your best keyword bringing in the most amount of clicks goes over that threshold you stick to your guns and you decrease that bid, until you find the sweet spot.
To start out its easier to make an auto campaign, then from that campaign you find the best keywords and create another manual campaign with those keywords. DONT negate them on the auto, though; your manual campaign may just perform worse, as it hasn't had much time.
Seller_GuToR7y2Kbfqa
Such a helpful and measured reply, great of you to take the time to help others.
The original post is superb too, a conundrum many are facing, wondering why their remittance & profit is shrinking.
We started 8 years ago on Amazon and by far the biggest change since then is the death of the organic search. Like you, we had a ROAS around 8, always below 15%. In the past, where as Ads brought 'additional sales' to organic, they are now the majority.
We found around 18 months ago the need for organic search strength stopped in our category... the only lever you could pull to move up the list was price... this lead to the inevitable, to be seen you had to advertise more aggressively, one did so we all did.
We are the brand owner, manufacturer, we have enriched copy, up to date Stores and Premium A+ on everything however the only thing that gets you near the top is Amazon Ads.
We feel a by-product of these changes is visible in all Seller-Inboxes, the number of Ad-Optimisation/Accelerators companies that entered the market. There was suddenly a genuine need for people to control their Ad-Spend however, what happens is, you are then paying a monthly fee for those companies to spend more and also give Amazon money to data-subscriptions.
I feel I understand it (I may not). I used to visit the Amazon offices when they started in Slough, they have grown so large, with so many mouths to feed, they have to make money where they can, especially off the boom of covid online shopping, those targets only go one way. It is clear Amazon make far more money from advertising than they do selling products, all of their costs have sky-rocketed, like everyone else, but to dial-up the amount everyone has to spend on advertisng (tens of clicks before a product is even purchased) it makes sense we have got to this stage.
The key though.... will this continue or, once the world settles down, will we see less of a reliance of advertising revenue and a reverse back to the core value of every product in the world from multiple sellers - 100% availability.... sadly this can't be accomplished if the seller base is cut in half
Appreciate every category is different and congratulations for keeping such a strong ROAS. Be interesting to hear if you think I am talking nonsense?
Seller_zKEt2RiaID5EU
Hi Tangible, really interesting to hear your perspective, I had a look at your store, and I think we’re quite aligned in terms of product value. I’ve found myself increasingly tempted to push past the £10 threshold, but in my category that bumps up the referral fee and disqualifies us from the Small & Light pricing structure, which complicates things.
My take on ads is probably a bit different. I operate in a heavily saturated market, but our organic sales consistently outperform paid, even though our ACOS sits around 13% on bestsellers, the true ACOS is closer to 4–6% once you factor in the organic uplift. I treat both channels as complementary rather than separate, although its worth noting our best sellers have been running for more than 8 years now, so there could be some legacy amazon algorithm somewhere in the mix!
That said, it takes a lot longer now to get a listing to a standard I’d consider “sellable.” We often run ads at a loss for 3–4 months just to build organic ranking. In your case, I imagine it’s even trickier, with stock planned a year ahead, any major listing changes affect BSR, and if you want to keep your reviews intact, you’re forced to adapt the listing for each yearly edition.
One thing I’ve noticed over time is that bullet points are becoming less effective, customers just don’t read them. We’ve started converting key bullet content into punchy phrases in our images, and that’s made a noticeable difference in conversion, especially on ad-driven traffic. It’s funny how people would rather scan a photo than read the listing. We also reworked our A+ content to focus more on lifestyle imagery and short, catchy messaging, still SEO-optimized via image naming, but less text-heavy overall.
Overall, though, i do agree with there were once 4 or 5 ad driven products on page 1, whereas now if you're not in the top 10 of those keywords, your driven back to purely ad driven sales.
Seller_GuToR7y2Kbfqa
Thank you Perfect Looks!
Fully on-board with what you've said and I believe, after having a nosey around your category, the same things are happening in both your's and our's.
For organic, we are both very lucky to have built brand recognition and a loyal customer base... repeat purchasing is holding organic search up in my opinion.
Best wishes to you.
Seller_KlbXZHzQGSDZv
Explained well above but essentially you need to find something else to sell. Your selling poop bags which amazon also sells 9i knnow we use them). If your spending £30 on advertising to get £100 sales your going to run into trouble.
Have you considered FBM rather than FBA. 10,000 sales per annum would get you a reasonable rate and free collections from RM you would save on any costs involved in sending to amazon storage and prep work against say 2hrs a day and some packaging materials
Seller_7tW7yNKxGkkOW
If you haven't scoped out the market, what margins you would be working on and the competitors pricing you have made a big error before you even started, especially on mass volume low margin products which you appear to be in.
Most of these sellers would of been on here for years with thousands of reviews and a very high seller ranking so there organic sales will be doing all the heavy lifting and the paid ads even at a low roas will be used to protect that ranking.
Due to their rank and huge organic sales there Total advertising cost will be in the low single figures regardless of a 1.5 or a 3 roas. That is where the serious money is made on the low price mass volume sellers.
Seller_soBD2wwhsVOww
Find another product,with Amazon selling them as low as £1.98 & over 600 other sellers it pointless trying to compete.
Seller_GdQldM5H4AISo
Same issue here - I have decided to close our amazon account. This year - total sales £5k, total Fees £8k. It's just not working for sellers any more. That's without advertising spend.
Seller_w0NuiqSLJxWvi
We have cancelled all advertising. Its just not worth it. May as well sell organically.
