If I expand to Amazon Canada, how do I know if I'm actually making money after fees, FBA costs, and extra inventory?
To know if Amazon Canada is actually making you money, you need a per-unit profit model that layers in Amazon's referral fee (typically 8–15% of sale price), FBA fulfillment and storage fees, your landed cost of goods, and the carrying cost of the extra inventory you'll need to hold — only what's left after all of that is real profit. Revenue showing up in Seller Central is not the same as money in your pocket.
Why Your Amazon Dashboard Lies to You (A Little)
Amazon Seller Central shows you revenue. It does not show you profit. That gap — between what a sale looks like and what it actually puts in your business — is where a lot of expansions quietly bleed out.
Here's the full stack of costs you need to model before you can answer the question honestly.
The Four Layers of Amazon Canada Profitability
1. Amazon's Referral Fee
Amazon charges a referral fee on every sale — typically 8% to 15% of the total sale price, depending on your category. Skincare and supplements generally land around 8%; electronics can hit 15%. This comes off the top, before anything else.
2. FBA Fulfillment Fees
If you're using Fulfillment by Amazon (the default for most sellers who want the Prime badge), you're paying per-unit pick, pack, and ship fees based on the product's size and weight. A small standard-size item might cost $3.50–$5.00 CAD to fulfill. A large or heavy product can push $10–$20+. Run these numbers for your actual SKUs — don't estimate from a competitor's category.
3. FBA Storage Fees
Amazon charges monthly storage fees per cubic foot of space your inventory occupies in their fulfillment centres. Hold slow-moving stock too long and you'll also face long-term storage surcharges (typically after 365 days). This is where sellers get hurt most often: they stock up to avoid stockouts, then watch the carrying cost quietly eat the margin.
4. Your Landed Cost of Goods
This one sounds obvious, but it trips people up in expansion. The cost of the goods sitting in an Amazon fulfillment centre includes your supplier cost + freight + import duties + any prep and labelling costs to meet Amazon's inbound requirements. If you're sourcing differently for Amazon than for your own storefront, your landed cost may actually be higher per unit.
The Calculation That Tells You the Truth
For each SKU you're considering listing, build this simple model:
Sale Price − Referral Fee (e.g. 8%) − FBA Fulfillment Fee (per unit) − FBA Storage Fee (allocated per unit, based on expected velocity) − Landed COGS − Amazon PPC / advertising spend (if applicable) = True Per-Unit Profit
Then divide that by your sale price to get your net margin on Amazon, and compare it honestly to your margin on your own storefront. Many owners are surprised to find Amazon margins run 10–20 percentage points lower than their Shopify channel — that's not necessarily a dealbreaker, but it has to be a known fact before you commit inventory capital.
The Inventory Question Is Really a Cash Flow Question
Expanding to Amazon Canada doesn't just cost you margin — it costs you cash up front. Amazon typically requires more inventory buffer than your own storefront because you're shipping into their fulfillment centres in bulk, and stockouts kill your ranking. That cash is tied up until the product sells and Amazon remits — which happens on a bi-weekly payout cycle, not instantly.
Model the cash gap: if you're sending in 90 days of inventory to start, how long before that investment pays back, given Amazon's payout timing? That's the number that tells you whether expansion is a good use of your capital right now — or whether it stretches you thin at the wrong moment.
What Good Looks Like
A healthy Amazon Canada expansion looks like this: a SKU-level margin model built before you list, a minimum acceptable margin threshold (many experienced sellers won't list anything below 20% net after all fees), and a monthly reconciliation that catches fee creep early — because Amazon's fee structure changes, and not always in your favour.
This is the kind of multi-platform profitability work that gets genuinely complex when you're running a Shopify storefront alongside Amazon, each with different costs, payout schedules, and accounting treatment. The math is doable — it just has to actually get done.
Frequently asked questions
What is a realistic net profit margin to expect on Amazon Canada after all fees?
Most experienced sellers target a minimum of 20% net margin after referral fees, FBA costs, and COGS before they'll list a product on Amazon Canada. Many products land between 15–25% net, compared to 35–50%+ on a direct Shopify storefront. If you can't hit at least 15% after all fees, the channel likely isn't worth the capital and complexity.
How does Amazon Canada's referral fee compare to Etsy or eBay?
Amazon's referral fees (8–15%) are broadly similar to Etsy's transaction fee structure (6.5% transaction + listing fees) and eBay Canada's final value fees (roughly 12–14% for most categories). The bigger difference is FBA fulfillment costs — those are unique to Amazon and can add $4–$20+ per unit on top of the referral fee, making Amazon's total take meaningfully higher for physical goods.
Do I have to use FBA, or can I fulfill Amazon Canada orders myself?
You can fulfill orders yourself through Amazon's Fulfillment by Merchant (FBM) option, which eliminates FBA fees. The trade-off is that FBM listings generally don't qualify for Prime, which significantly hurts visibility and conversion. Most sellers expanding to Amazon Canada use FBA for their core SKUs and FBM selectively for slow-moving or oversized items where storage fees would be punishing.
How do Amazon Canada payouts affect my cash flow compared to my Shopify store?
Amazon remits funds on a bi-weekly cycle, and they hold a reserve to cover potential refunds and chargebacks — so you typically wait 14–21 days from a sale to receive cash. Shopify Payments can settle daily or every few business days. If you're sending 60–90 days of inventory into Amazon's fulfillment centres upfront, model that cash gap carefully before committing, especially if you're already managing tight working capital.
Does expanding to Amazon Canada create any Canadian GST/HST obligations I didn't have before?
If you're already registered for GST/HST and selling to Canadian customers, the obligations are broadly similar — you're still collecting and remitting on taxable sales. However, using Amazon's fulfillment centres means inventory physically sits in Canadian warehouses, which can have implications for how sales are reported and how input tax credits are tracked across platforms. It's worth reviewing your sales tax setup with an accountant familiar with multi-platform Canadian e-commerce before you launch.
Amazon's fee structure changes frequently, and the figures mentioned here reflect general market ranges — not your specific category, SKU, or account. Every business is different; run these numbers against your actual fee schedule and talk to your accountant before making capital or inventory commitments.
General information only — not tax, accounting, or financial advice for your specific situation.