Why Is My Amazon Revenue Up but Profit Down?

The Q4 fee stack you pay now, the 2027 fees coming on January 15 and the per-unit math behind the missing margin.

Revenue goes up while profit goes down because most Amazon costs do not scale with your sales dollars. Fulfillment fees bill per unit. Storage bills per cubic foot per month. A discount cuts the dollars per unit and leaves those costs where they were. Read contribution margin per ASIN. Use the fee table for the week each unit ships.

Why do revenue and profit move apart on Amazon?

They move apart because your revenue line and your profit line count different things. Revenue counts what the shopper paid. Profit counts what is left after every cost on every unit. Most Amazon costs do not care what the shopper paid.

A sports brand our team audited shows the gap in real numbers. Revenue went from $390,788 to $323,418 in one year, down 17%. Gross profit went from $83,057 to $25,066 in the same year, down 70%. $57,991 of profit was gone. The founder watched revenue and thought the brand was fine.

The costs explain the split. Ad spend went from $13,990 to $37,634, up 169%. Storage fees went from $2,723 to $18,011, up 561%. Promo spend went from $2,443 to $5,070. Units sold only fell 5.5%. Revenue fell 17%. Profit fell four times as fast. The revenue line gave no warning.

The brand also had no COGS file. Nobody saw which products sold below cost. The most useful thing I built in that account was the COGS file. It gave the founder a per-SKU margin view for the first time.

That gap is the whole question in one account. The fix starts with the unit and storage costs, because those change next.

What changes in the 2027 Amazon fee update?

Amazon announced its 2027 US fee changes in early November. The headline is an average FBA fulfillment fee rise of $0.19 per unit from January 15, 2027. Amazon puts it at about 0.8% of the average item's selling price. Amazon also says fees rise for some products and fall for others.

The average hides the spread. PPC Land's breakdown of the announcement lists the average change by size tier and price band:

Five fee categories also lose their low-price FBA rates and move to the $10 to $50 rates: Automotive and Powersports, Compact Appliances, Musical Instruments and AV Production, Media and Computers. The bulky and oversize tiers get a new structure, with new handling fees.

Storage changes from February 1, 2027. Amazon removes the storage utilization surcharge and the aged inventory surcharge. Monthly storage and aged inventory fees merge into one age-based rate. Amazon says stock that turns in under six months sees flat or lower fees. Aged stock pays more. Amazon publishes the new per-cubic-foot rate in the 2027 fee summary in Seller Central. Pull it from there before you plan Q1 stock.

Referral fees barely move. PPC Land reports only two referral fee changes, both cuts: a new 3D printer rate and an Amazon Renewed promotional rate. The 3.5% fuel and logistics surcharge stays at 3.5% for now. Amazon says it keeps reviewing it.

Amazon points sellers to two tools for this. The Fee Change Comparison dashboard in Profit Analytics shows the impact at account and product level. The Revenue Calculator models one product at a time.

What does the Q4 fee stack add through January 14?

Q4 adds two costs on top of the base fees: a peak fulfillment fee and a storage rate about three times the January to September rate. The 3.5% fuel and logistics surcharge runs all year. In Q4 Amazon charges it on the higher peak fee. Both Q4 costs bill by the calendar. Neither one checks whether your deal made money.

• Peak fulfillment fees run from October 15, 2026 to January 14, 2027. They add about $0.32 per unit on average over non-peak rates.
• Standard-size storage costs $2.40 per cubic foot per month from October to December, against $0.78 from January to September.

Three fee dates fall inside three weeks. Peak fees end on January 14. The 2027 rates start on January 15. Storage changes again on February 1. A price you hold from December into February runs on three different fee tables.

Until January 14, each unit pays the peak fee when it ships, whether the order made money or not. A unit still in the warehouse in December pays the December storage rate whether it sells in January or never.

What does one ASIN's contribution margin look like across the three fee tables?

On the example ASIN below, contribution margin falls from $6.99 per unit at non-peak rates to $0.75 on a 20% peak-season deal. It sits at $6.87 under the 2027 rates. The deal lifts revenue 140% and cuts contribution 68%. Contribution margin per unit is the selling price minus every cost on that unit.

This is a worked model. No client data sits in it. Price, COGS, FBA fee, ad cost and inbound placement are example inputs. The fee changes come from the sources at the end.

Example ASIN: large standard-size, $29.99, 0.25 cubic feet, landed COGS $8.00, each unit sits two months before it sells.

The 2027 storage line keeps the current $0.78 non-peak rate. Amazon says stock under six months sees flat or lower fees. Treat this line as a ceiling until Amazon publishes the 2027 rate.

Now add volume. Say the ASIN sells 1,000 units in a non-peak month. The deal sells 3,000 units in a peak-season month.

• Non-peak month: $29,990 revenue, $6,990 contribution.
• Peak-season deal month: $71,970 revenue, $2,250 contribution.

Revenue up 140%. Contribution down 68%.

Say the deal stock arrived in October. The last units sell in December. Each unit then pays three peak months of storage, $1.80 per unit. Contribution drops to $0.15. Returns or a deal fee push the unit below zero. Then each extra sale adds to the loss.

My rule for any deal running before January 15: rebuild unit contribution at peak rates first. If the number is negative, cut the deal or shrink the discount. Selling more of a negative unit only grows the loss.

The 2027 column holds a second lesson. The fee rise on this tier is $0.12 on average. The margin drops from $6.99 to $6.87. On a small standard-size item above $50, the average rise is $0.70. Same announcement. Almost six times the rise per unit.

Why does holding less stock not fix the storage problem?

Holding less stock trades a storage fee for a low-inventory-level fee. Amazon charges it when an item's stock falls below 28 days of supply. For small standard-size items the 2026 rate is $0.89 per unit under 14 days of supply, $0.63 from 14 to 21 days and $0.32 from 21 to 28 days. Large standard-size items pay more per unit at each band.

Days of supply is your average daily units on hand divided by your average daily units shipped. The February 2027 change moves the measurement. Amazon will compare inventory with actual shipments in the four weeks before and after the assessment date. This replaces the trailing 30-day and 90-day averages. The 28-day line stays. The fee also moves to its own line in the Payment view report, with a new Low-Inventory-Level Fee Report from February 1.

Inbound placement adds a third pressure. Amazon's 2027 announcement keeps the inbound placement rate card unchanged. Central inbound regions for standard-size products drop from three to two, East and West.

So the target is a number of weeks. Too much stock pays the peak storage rate through December. Too little pays the low-inventory fee. Weeks of cover per ASIN is the number to set.

Why does ACOS hide the margin leak?

ACOS hides the leak because it only compares ad spend with ad sales. It never sees the referral fee, the FBA fee, the surcharge, storage or COGS. An ASIN shows a clean ACOS and still loses money on every unit. TACoS sets ad spend against all sales. It misses the same costs.

The sports brand above shows it in one segment. Its core products ran at an ACoS of 4.3%, then 8.7% the next year. On an ad report, 8.7% looks excellent. In the same year, ad spend on those products rose 91%. Sessions rose 149%. Conversion stayed flat. Gross profit fell $11,752, or 20%.

This is the trap behind "protect the ACoS" reviews. When margin shrinks, the team trims bids to hold the percentage. Velocity slows. Rank weakens. The fees per unit stay the same. The margin per unit does not come back. The review protected a ratio and left the leak open.

The better ad question is per unit. Ad cost per unit, set against contribution before ads. If contribution before ads is $10.59, as in the non-peak column, $3.60 of ad cost per unit is affordable. At $4.35 before ads, as in the deal column, the same $3.60 leaves $0.75.

What order should you fix it in?

Fix the profit leak in four steps. Build the cost file per ASIN first. Then fix stock age. Then set price floors. Then set ad limits by margin tier. This follows Fix Order: offer and stock first, PPC scale last. Each step changes the data the next step reads.

• Build the cost file per ASIN. Landed COGS, referral fee, FBA fee at the current tier, surcharge, inbound placement, storage per unit, ad cost per unit and returns. In the audited account, this file showed which SKUs sold below cost.
• Fix stock age. Run the inventory age report. Clear the oldest units before the February 1 storage change, because aged stock pays more under the new rate. The brand ran an emergency clearance on its worst storage segment. Storage fees there had risen 727%. It froze reorders too.
• Set price floors from the cost file. Stop promos on SKUs with negative contribution. That account had coupons running on SKUs that lost money on every sale.
• Then set ad limits by margin tier. Each ASIN's contribution sets its ACoS ceiling. The sports brand cut ad waste on day one as an emergency stop. It paused auto and broad campaigns. It kept exact match where it had sales history. Then it set ACoS ceilings by margin tier.

The order matters. Without a cost file, an ad limit is a guess. Without the inventory age report, a price floor leaves aged units in the warehouse at the new higher rate.

My job is the per-ASIN math behind a brand's Amazon account. I do it before anyone changes a bid. AI handles the spreadsheet rows. The pricing decision stays with me.

What to do before January 15

• Open the Fee Change Comparison dashboard in Profit Analytics and list the ASINs with the biggest fee change.
• For each of those ASINs, build the per-unit table above with your own price, COGS, FBA fee and ad cost.
• Run each ASIN at the peak rates (to January 14), at the 2027 rates (from January 15) and with the February 1 storage change.
• Mark every ASIN with contribution below zero at its current or planned deal price. Shrink or end those discounts first.
• Pull the inventory age report and list stock likely to cross six months after February 1.
• Set weeks of cover per ASIN. Keep it above 28 days of supply. Keep it low enough to sell every unit inside six months.

FAQ

Why is my Amazon revenue going up but my profit going down?

Your costs grow per unit and per month of storage while your revenue per unit falls or stays flat. Discounts, peak fulfillment fees, peak storage and ad cost per unit all widen the gap. Unit contribution per ASIN shows where.

How much do Amazon FBA fees rise in 2027?

Amazon says FBA fulfillment fees rise $0.19 per unit on average from January 15, 2027, about 0.8% of the average item price. For standard-size tiers, the average change by price band runs from no change to +$0.70 per unit. Check your own ASINs in the Fee Change Comparison dashboard.

When do Amazon's peak fees end?

Peak fulfillment fees run from October 15, 2026 to January 14, 2027. The 2027 rates start the next day. Storage changes to a single age-based rate on February 1, 2027.

Is a low ACOS a sign of a profitable ASIN?

No. ACOS leaves out fees, storage and COGS. In one sports brand, a core segment ran at 8.7% ACoS while its gross profit fell 20% in a year.

The sports brand's founder watched revenue fall 17% and thought the brand was fine. Profit fell 70% in the same year. The number on the dashboard was correct. It was the wrong number to watch.

Which of your ASINs changes the most between the January 14 fee table and the January 15 one?

Sources

1. Amazon Seller Central announcement "2027 Updates to US Referral and Fulfillment by Amazon fees", 5 Nov 2026, as reposted on the Sellers Ask Sellers forum: https://sellersasksellers.com/t/2027-amazon-fba-rate-increases/7699
2. PPC Land, "Amazon sellers face average $0.19 FBA fee rise from January 15, 2027", 6 Nov 2026: https://ppc.land/amazon-sellers-face-average-0-19-fba-fee-rise-from-january-15-2027/
3. EcomCrew, "Amazon's 2027 Fee Math Doesn't Stop at 19 Cents", 6 Nov 2026 (current storage rates $0.78 and $2.40 per cubic foot, fuel surcharge): https://www.ecomcrew.com/amazons-2027-fee-math-doesnt-stop-at-19-cents/
4. AMZ Prep, "2026-2027 Holiday Peak FBA Fulfillment Fees for USA and Canada", updated 6 Nov 2026: https://amzprep.com/holiday-peak-fulfillment-fees/
5. AMZ Prep, "Amazon Low Inventory Level Fee: The February 2027 Change", updated 6 Nov 2026: https://amzprep.com/amazon-low-inventory-level-fee/
6. First-hand account data (sports brand, anonymised): Proof Bank PB-03.