Amazon FBA minimum profit margin

Are you taking into account costs to get the product to you and to amazon?

It's not as helpful to just look at the profit and say yay or nay; you need to look at gross margins/gross profit as well. Making $4.30 product that $2.50 and sells 1000 units per month is acceptable, but making $4.30 for a product that costs $10.00 is not acceptable.

The other thing you need to consider is the stability of the prices you're looking at and are sure you can beat. I have some niches where the prices fluctuate drastically...sometimes they are really low, other times they aren't. Some niches the prices don't fluctuate much at all. You don't want to enter in thinking that you'll be the lowest price operator only to get crushed when someone (with lower costs) decides to inflict some pain on you.

For a real world example, I have a product that I have been selling for $39.99 on Amazon. I sell it here because people buy it here and I don't have a reason to lower it. If someone like you came in and thought they could easily beat that price, then you'd be surprised to learn that I have TONS of room to move downwards. I can actually price the product as low as $9.99 and still make a little bit of money.

Do not assume that you can "take over the competition" before you have even stated with a specific product. Just becasue you can set a price lower than the others does not mean that much. As soon as you do that the others may lower their price to beat yours. Hence the "race to the bottom". As for your question about the profit margin that is hard to answer without knowing what the competition will do, Remember prices are variable. Also the fact that this item sells 1000 per month is good, except it also indicates that there is probably a lot of other sellers with a lot of inventory. Remember the basic law of supply and demand.

Some sellers use software to automatically lower their price if someone else is lower. I generally try to be the lowest FBA seller and ignore merchant fulfilled sellers. That helps you win the buy box along with having a good seller record and good feedback.