How does MerchantSpring calculate profit for Amazon sales?

MerchantSpring calculates profit by combining Amazon financial event data with additional cost inputs to determine the true financial outcome of each transaction, product, or reporting period.

Rather than relying solely on revenue figures, MerchantSpring analyzes the complete set of financial events associated with a sale. This includes marketplace fees, fulfilment costs, refunds, and other adjustments recorded within Amazon’s financial system.

By processing these events individually, MerchantSpring provides detailed profit reporting across products, channels, and time periods.

Components Included in Profit Calculations

MerchantSpring calculates profit using the following financial elements.

Revenue

Revenue typically includes:

• Product sale price

• Shipping revenue (if applicable)

Revenue is retrieved from Amazon order and financial data.

Amazon Marketplace Fees

Amazon charges multiple types of fees that affect profitability, including:

• Referral fees

• Fulfilment fees (FBA)

• Variable closing fees

• Shipping charges

• Storage fees

These fees are retrieved directly from Amazon’s financial event data.

Refunds and Returns

Refund transactions reduce the total revenue associated with a product. Refund events are included in financial reports using the posted date recorded by Amazon.

Promotional Discounts

Promotions such as coupons or discounts may reduce net revenue.

These events are reflected through Amazon’s financial adjustments.

Cost of Goods Sold (COGS)

If a COGS value has been uploaded within MerchantSpring, it is included in profitability calculations.

COGS allows businesses to calculate true margin rather than simply revenue after marketplace fees.

Advertising Costs (Optional)

If Amazon Advertising data is connected, advertising spend may also be included in profitability analysis.

This allows businesses to evaluate contribution margin after advertising investment.

Why MerchantSpring Uses Event-Level Data

Processing financial events individually allows MerchantSpring to provide:

• Product-level profit analysis
• Accurate fee breakdowns
• Visibility into adjustments and reimbursements
• Detailed reconciliation with Amazon settlements

Notes: 

• Profit figures may change as Amazon posts additional financial events.
• Refunds and adjustments may appear days or weeks after the original sale.
• Profit reporting becomes more accurate over longer reporting periods.