3. Understanding Cost Share

Managing your Amazon business profitability goes beyond simply tracking margins. To truly pinpoint where profits are leaking and where opportunities lie, you need to go deeper. That’s where the Cost Share dashboard comes in.

Cost Share breaks down your product costs into categories so you can see exactly which areas are eating into your margins and which ones you can adjust to boost profitability.

The 4 Cost Categories

Every product sold on Amazon has costs that fall into four main areas:

1. Cost Share 1 (CS1) - Landed Cost
   • What it costs to get your product from your supplier to Amazon.
   • Includes manufacturing, freight, customs, and prep.
2. Cost Share 2 (CS2) - Amazon Fees
   • Fulfillment fees & referral fees that Amazon charges all sellers.
   • These are largely fixed but still important to monitor.
3. Cost Share 3 (CS3) - Advertising (TACoS)
   • Your spend on PPC and other campaigns to drive sales.
   • Highly variable and often the biggest lever you can control.
4. Cost Share 4 (CS4) - Storage & Aged Inventory Fees
   • What you pay Amazon to store your products, this includes monthly storage and Aged Inventory Fees.
   • These can add up quickly if inventory sits at Amazon for too long.

By default, the targets for these categories are set as follows: CS1 = 28%, CS2 = 30%, CS3 = 20%, and CS4 = 2%. These benchmarks give you a starting point to measure product performance, but they can be manually adjusted at any time within your Profit Settings to better align with your specific business goals.

Why Cost Share Matters

Looking at margins alone only shows what your profitability is, not why. A product might look like a “margin drag” (hurting your bottom line), but with a few smart changes, it could become an “on-target” or even a top-performing product.

That’s where Cost Share comes in. It breaks each product’s costs into categories, then compares them against your targets (e.g., Landed Cost ≤ 30% of revenue). Cost Share highlights when a product is above or below those targets, making it clear where adjustments are needed—whether that’s lowering shipping costs, reducing ad spend, or optimizing inventory turnover.

For example, let’s say Product A is profitable but below your target margin. Cost Share reveals:

• Landed Cost: 28% (✅ within target of 30%)
• Amazon Fees: 15% (✅ within expected range)
• Advertising: 22% (⚠ above target of 15%)
• Storage: 3% (✅ on target)

The insight? Advertising spend is the main issue. By optimizing campaigns, you could bring the product back into your on-target margin range.

This is powerful because even top-selling products may have room for improvement. A small margin increase—for example, moving a bestseller from 25% to 28%—can translate into significant profit dollars. Cost Share ensures you always know where to focus your efforts for maximum impact.

What’s Next

While Cost Share gives you the insights, you don’t need to manually comb through every number. Our task management and recommendations engine will automatically surface strategies to improve profitability across your catalog.