Profit Margin Calculation: Determine True Profitability for Toy & Miniature SKUs

Profit Margin Calculation measures the percentage of revenue retained as profit after subtracting all costs, including COGS, freight, Amazon fees, packaging, and advertising.

In the toy and miniature industry, accurate profit margin calculation determines whether trending toys and terrain accessories can profitably operate as Amazon FBA products. Sellers rely on margin analysis to build a sustainable Amazon stocklist and avoid low-margin traps. Toy wholesale suppliers use margin frameworks to structure profitable toys wholesale bundles or tier pricing.

Example in practice:

A seller calculates that a £40 toy costs £22 landed and £8 in Amazon fees. Profit margin = (£40 – £30) / £40 = 25%.

Why does this matter?

Knowing true margins prevents unprofitable scaling and supports strategic pricing.