CPPU

Contribution Profit Per Unit is a key profitability metric used by both 1P vendors and 3P sellers on Amazon. It shows the net profit made from selling one unit of a product, after accounting for:

• Cost of Goods Sold (COGS)
• Amazon fees (referral, FBA, storage, etc.)
• Advertising spend (PPC costs)
• Discounts and concessions

Formula:
CPPU = Revenue per unit – Total variable costs per unit

Key points:

• Helps assess the true profitability of individual SKUs
• Allows brands to optimize pricing, promotions, and ad strategies
• Often used in Amazon's internal profitability analysis for vendors

Why it matters:

• Amazon may prioritize items with higher CPPU in retail and ad placements
• Brands can identify underperforming products or overspending on ads
• It's a central metric during AVN (Annual Vendor Negotiation) or pricing reviews

💡 Example:
You sell a kitchen scale for $30. After subtracting the $12 COGS, $7 in Amazon fees, and $4 in advertising, your CPPU is $7.

In short:
CPPU = the actual profit you earn from each unit sold on Amazon, after subtracting all associated costs.