If you're an (aspiring) Amazon seller, you likely came across Amazon FBA. It stands for Fulfillment by Amazon and means that Amazon fulfills the orders for you. From customer support to shipping, payments, returns, and more.
Amazon also takes care of picking, packing, and shipping products to customers. It’s convenient and gives you access to the logistics and customer base of this massive business. But as you can imagine, Amazon doesn’t offer this service for free.
It's essential to understand the fees that come with FBA, as they play a significant role in your costs. In this guide, we'll delve into the details of Amazon FBA fees and how they are calculated.
How Amazon FBA Pricing Works
FBA services are not provided for free and are subject to Amazon FBA fees. These fees are primarily determined by four factors:
- Product Weight: The weight of your Amazon product is a crucial factor in calculating FBA fees. Amazon uses weight calculations to determine the shipping costs associated with your product.
- Product Size: The dimensions of your product also influence the FBA fees. Larger or bulkier items likely cost more as they take up more space in Amazon's warehouses.
- Product Category: The type of product you are selling and the category it belongs to can impact the FBA fees.
- Sales Channels: The platform on which you sell your products is another factor to consider. Whether you sell only on Amazon or also on third-party sites can influence the fees you encounter.
The Most Important Fees to Consider
When utilizing Fulfillment by Amazon, two key fees require your attention.
Seller Account Fee
Before selling on Amazon, you need to set up a seller account. Amazon offers two types of seller accounts: Individual and Professional.
Individual Account:
This account type is ideal for small-scale sellers who are just starting out. It doesn't require any registration fee or monthly subscription fee. Instead, Amazon charges a flat transaction fee of $0.99 per item sold.
Professional Account:
For sellers with a higher sales volume, a Professional account is recommended. It comes with a monthly fee of $39.99 but eliminates the per-item transaction fee of $0.99. If you anticipate selling more than 40 items per month, upgrading to a Professional account can save you money in the long run.
Product-Based Referral Fee
As a third-party seller on Amazon, you are required to pay a referral fee for each sale. The referral fee is a percentage of the final product sale amount, determined by the category in which your item falls. Most referral fees range from 8% to 15%, depending on the category. Some categories, like luxury watches, may have a split-level referral fee structure based on the item's price.
Fulfillment Fee
This fee covers the advantages of using FBA, including packaging, shipping, and handling returns. The cost of fulfillment depends on the size and weight of the item being shipped.
| Size tier and Shipping weight |
Fulfillment fee per unit |
| Small standard 4 oz or less |
$3.22 |
| Small standard 4+ to 8 oz |
$3.40 |
| Small standard 8+ to 12 oz |
$3.58 |
| Small standard 12+ to 16 oz |
$3.77 |
| Large standard 4 oz or less |
$3.86 |
| Large standard 4+ to 8 oz |
$4.08 |
| Large standard 8+ to 12 oz |
$4.24 |
| Large standard 12+ to 16 oz |
$4.75 |
| Large standard 1+ to 1.5 lb |
$5.40 |
| Large standard 1.5+ to 2lb |
$5.69 |
| Large standard 2+ to 2.5 lb |
$6.10 |
| Large standard 2.5+ to 3 lb |
$6.39 |
| Large standard 3+ lb to 20 lb |
$7.17 + $0.16/ half-lb above first 3 lb |
Oversize product fees
| Size tier and Shipping weight |
Max dimension |
Fulfillment fee per unit |
| Small oversize 70 lb or less |
60” x 30” |
$9.73 + $0.42/lb above first lb |
| Medium oversize 150 lb or less |
108” (longest side) |
$19.05 + $0.42/lb above first lb |
| Large oversize 150 lb or less |
108” (longest side) |
$89.98 + $0.83/lb above first 90 lbs |
| Special oversize Over 150 lb |
> 108” (longest side) |
$158.49 + $0.83/lb above first 90 lbs |
Storage Fee
Amazon operates massive warehouses to meet the demands of its customers. As an FBA seller, you may be charged storage fees to cover the costs of rent, staffing, and maintenance. There are two types of storage fees: monthly storage fees and long-term storage fees. Monthly storage fees are calculated based on the daily average cubic feet of space your products occupy in Amazon's warehouses. These fees may vary throughout the year, with increased charges during the fourth quarter to accommodate the holiday season rush.
Standard size
January - September $0.87 per cubic foot
October - December $2.40 per cubic foot
Oversize
January - September $0.56 per cubic foot
October - December $1.40 per cubic foot
Refund Fee
Occasionally, customers may return items for a refund, which can result in additional fees for sellers. Amazon charges a refund fee to cover the processing of returns. The specific fee amount depends on factors such as the item's category, seller account type (Individual or Professional), and whether the item is media-related or non-media-related. For Individual sellers, the $0.99 per-item transaction fee is retained by Amazon, while Professional sellers are not charged this fee.
Miscellaneous Fees
There are a few other miscellaneous fees that sellers should be aware of when using Amazon FBA. For example, fees for dangerous products.
Such as items containing lithium batteries. Sellers can find further details on these additional fees on Amazon's seller website.
Understanding Amazon FBA Fees
It's important to have a clear understanding of all FBA fees, as they impact your business. Being aware of them will help you set product prices, calculate margins, and manage your finances.
To simplify the process of calculating FBA costs, Amazon provides a free online tool known as the Amazon fee calculator. By entering the product identifier and cost price, sellers can obtain a breakdown of the fees associated with their products.
Conclusion
In conclusion, understanding the fees and expenses that come with an FBA business is vital. Understanding the fees can help you make informed decisions. It also allows you to better manage your expenses. Stay proactive and informed to make the most out of this business.
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