If you're a private-label Amazon seller using US suppliers and selling on Amazon UK, your unit economics depend on five things stacked correctly: US supplier cost, ocean freight, UK import duty + VAT, Amazon FBA fees, and the VAT recovery cycle.
This piece walks through the full landed cost for a typical SKU and what each lever does to per-unit margin.
The five-line stack
For a generic widget at $14 ex-works US, sold on Amazon UK at £29.99:
| Line | GBP | Notes |
|---|---|---|
| US supplier (1,000 units × $14, FX 1.27) | £11,024 | Plus prep at $0.30/unit |
| US prep (poly-bag + FNSKU labels) | £236 | Critical: prep in US, not UK |
| Freight (US → UK FCL share or LCL) | £950 | LA → Felixstowe, ~3 CBM |
| Insurance (0.5%) | £58 | On (FOB + freight) |
| CIF Value | £12,268 | Basis for duty |
| UK customs duty (4.5% UKGT) | £552 | Look up your HS code |
| UK Import VAT (20% on CIF + Duty) | £2,564 | Reclaimable if VAT-registered |
| Broker + UK final mile to FBA | £350 | LCL has higher per-shipment cost |
| Landed cost (1,000 units) | £15,734 | Of which £2,564 is reclaimable VAT |
| Per-unit landed | £15.73 | £13.17 if you reclaim VAT |
| Amazon UK referral (15%) | £4.50 | 15% × £29.99 |
| Amazon UK FBA fulfilment | £2.30 | Small-and-light example |
| Net per unit before storage/PPC | £9.99 / £7.43 | Pre-VAT-recovery / post-VAT-recovery |
The VAT-recovery line is the most-missed economic lever. A VAT-registered UK seller can reclaim the £2,564 import VAT on the next quarterly VAT return — that is £2.56 per unit. Sellers who haven't registered for UK VAT are leaving 8–10% margin on the table.
VAT registration: when and why
- Mandatory once your taxable UK turnover exceeds £90,000 in any 12-month rolling period.
- Voluntary below the threshold — and almost always worthwhile for FBA sellers because the import VAT recovery dwarfs the admin cost.
- Postponed VAT Accounting (PVA) — lets you account for import VAT on the VAT return instead of paying at the border. Massive cash-flow improvement; ask your customs broker to enable it.
FBA prep: do it in the US
Sending unprepped cartons to Amazon UK FBA and having Amazon prep them costs £0.40–1.20/unit. Having your US supplier (or a US prep centre) do it costs $0.15–0.40/unit (~£0.12–0.32). On 1,000 units that is a £400–1,000 difference per shipment.
US prep centres for FBA UK exist in LA, Houston, Atlanta, and the Northeast. Most US suppliers will also do basic prep (poly-bag, FNSKU, bundling) for $0.15–0.30/unit if you ask in writing.
What kills FBA UK margin
The five most common errors that wipe out the math:
- Not registering for UK VAT — losing 20% recoverable on every import.
- Over-prepping in the UK — same work at 5–10× the cost.
- Over-shipping LCL — 3 CBM is the inflection point; below that LCL wins, above that FCL is cheaper.
- Using destination duty preference / 232 lookups instead of UK Global Tariff — duties differ; UK doesn't apply destination duty preference to US-origin goods (you would hope so).
- Wrong product HS code — the UK Trade Tariff and the US HTS diverge at the 6+ digit level for many categories.
Tools
- UK Import VAT Calculator — verify your per-shipment VAT
- UK Landed Cost Calculator — full stack
- Amazon FBA Fee Calculator — Amazon side of the equation
- Import Profit Margin Calculator — tie it together
If your first FBA UK shipment ever lands at less than 10% net margin after VAT recovery, the unit economics aren't viable — go back and re-source.
