Amazon is an excellent platform for online sellers. You can reach a maximum number of your target market, and it is up to your perseverance to succeed in this business.
If you are an Amazon seller that sometimes get too overwhelmed with the day to day operations of your business, Amazon can help and take that off your hands. Through FBA (Fulfilled By Amazon), the Amazon platform can be a one-stop shop for everything a seller needs as well.
The first thing you need to do is register for Amazon’s FBA program. The FBA program is only available to Amazon sellers, but they can also assist in shipping to your customers when you sell on other platforms. It is free to register, but there are certain Amazon FBA fees you need to pay.
So what are Amazon FBA fees?
Amazon FBA Fees Explained
Wherever you sell your products, if you use Fulfillment by Amazon to stock inventory and fulfill and ship your orders, you’ll have to pay two initial Amazon FBA fees.
Below are the different Amazon seller fees you should expect when selling on Amazon FBA.
Fulfilment and FBA Shipping Costs
Amazon charges fulfilment fees which cover everything from picking, inner packaging, packing boxes, packing and shipping the orders for your product to your customers. This fee also includes customer service and returns processing as well.
Amazon does not cover the cost of products in categories with free customer returns. Paying Amazon their fulfilment fees is more affordable than having to work with various local shipping companies and paying for the shipping yourself.
It is also more convenient to have Amazon do all the legwork than needing to do all the inner packing, packaging and shipping yourself. The fulfilment fees are charged per unit, and the amount depends on the product’s size and weight.
Standard size products
|Small (1 lb. or less)||$2.41|
|Large (1 lb. or less)||$3.19|
|Large (1 lb. to 2 lb.)||$4.71|
|Large (over 2 lb.)||$4.71|
|Small oversize||$8.13||+ $0.38/lb. above first 2lbs|
|Medium oversize||$9.44||+ $0.38/lb. above first 2lbs|
|Large oversize||$73.18||+ $0.79/lb. above first 90 lbs|
|Special oversize||$137.32||+ $0.91/lb. above first 90 lbs|
Amazon FBA Storage Fees
Amazon FBA storage fees are the cost associated with storing all your products in Amazon’s warehouses. Inventory storage fees are based on the space occupied by your products in Amazon’s warehouses.
Monthly Storage Fees
Amazon charges the monthly storage fee per cubic feet of your inventory. You are charged for all the units stored in an Amazon fulfilment centre based on the calendar month and your daily average volume.
You are charged monthly fees between the 7th and 15th every month, of which you are charged a full month later. The monthly storage fees cover the cost of storing your inventory in Amazon warehouses that are spread throughout the country.
The fees usually go up between October and December because of the peak shopping season.
The influx of sellers shipping in their various products in bulk causes Amazon to charge more during these months.
You can even assign specific products to be delivered to a particular warehouse of your choosing. It is a significant advantage when your product market lives in a particular area. Your customer will receive their order that much quicker, boosting customer satisfaction.
Long-term Storage Fees
You are charged these Amazon FBA storage fees if you have inventory that is left idly sitting in Amazon’s warehouse for six months. Amazon will charge you $11.25 per cubic feet for any inventory that fits that criteria. If by chance you reach the twelve-month mark then you are charged $22.50.
To avoid these charges, you need to keep your product moving and be on top of your Amazon inventory management. Create a comprehensive business plan and only send products that you know will be sold in less than six months.
Amazon is set to make changes this year on their policy regarding inventory storage fees.
Miscellaneous Amazon FBA Fees
Other than the two primary Amazon FBA fees, it is possible to be charged additional fees as well.
The referral fee is charged for the privilege of being able to sell products on Amazon’s platform. The fee depends on the category and price of the product, but it is usually 15%.
This is charged regardless if you are an FBA seller or an individual seller on Amazon. The minimum referral fee is $1. It cannot be lower than that amount.
This fee is charged if you do not comply with the strict Amazon FBA label requirements and barcode system for all products that you ship to FBA. If the stock you send in is not labelled correctly then you will be charged a labelling fee. The FBA Label Service fee is $0.20 per item.
Stock removal fee
If you are an Amazon FBA seller and want to pull your inventory from their warehouses, then you are charged a stock removal fee per unit that is removed.
This scenario does happen; maybe you could not sell the inventory you sent in and have been charged the long-term storage fee several times already.
Then you still have a choice of having your products shipped back to you. There are variations of this charge depending on your requested type of removal.
|Service||Standard-size (per item)||Oversize (per item)|
|Liquidation||10% of liquidation proceeds||10% of liquidation proceeds|
Refund administration fee
When Amazon processes a return from one of your customers, they refund the referral fee you were charged, minus a twenty percent refund administration fee.
Variable closing fee
Amazon charges $1.80 for every sale of any media products. Keep this in mind if you are selling any media merchandise like CDs or dvds.
Amazon FBA Fees Sorted
In case you want to view the breakdown of charges for each product sold, merely follow these steps. Login to seller central, go to the detailed fee explainer, go to reports, click on payments, select transaction view, click on any amount on the total column.
Clicking on the total amount will show you a breakdown of all the fees for that particular order.
If done right; Amazon’s FBA program can help you save time and money in running your E-commerce business.Make sure to take into account all the potential Amazon fees first when setting the price for your product. Use the Amazon revenue calculator to check your potential profits double.