If you’re selling on Amazon, understanding Amazon FBA fees is essential. While FBA (Fulfillment by Amazon) offers convenience, it comes with various costs that sellers need to manage effectively. In this guide, We breaks down the Amazon FBA fees to help you decide whether FBA suits your business and how to keep these fees in check.
Key Takeaways on Amazon FBA Fees
- Selling on Amazon involves multiple fees, from fulfillment to storage and referral costs.
- FBA provides Prime eligibility, which can enhance sales but adds to the total expenses.
- Understanding and managing these fees can help you ensure a profitable business.
What Are Amazon FBA Fees?
Amazon FBA fees are charges applied by Amazon to handle fulfillment tasks for sellers. When you choose FBA, Amazon takes care of storage, packing, shipping, and even customer service, but each of these services has a cost. Here are the primary FBA fees:
- Fulfillment Fees – Charged per item for picking, packing, and shipping.
- Monthly Storage Fees – Charged based on the space your products occupy in Amazon warehouses.
- Long-Term Storage Fees – Charged for items stored longer than six months.
- Referral Fees – A percentage of the sale price, varying by category.
- Removal Fees – Charged if you need items returned or disposed of from Amazon warehouses.
- Return Processing Fees – For handling customer returns in certain categories.
Understanding these fees is crucial for maximizing profit and determining if FBA or Fulfillment by Merchant (FBM) is the right choice.
Monthly Subscription and Referral Fees
Amazon Selling Plans
Amazon offers two selling plans:
- Individual Plan: $0.99 per item sold
- Professional Plan: $39.99 per month, with access to more features for scaling up.
Most high-volume sellers choose the Professional Plan, as it becomes more cost-effective when selling over 40 items per month.
Referral Fees by Category
For every item sold, Amazon charges a referral fee. This fee is a percentage of the total sale price, including the item cost, shipping, and any gift wrap charges. Referral fees vary by category:
- Most categories: 15% (e.g., Home & Kitchen)
- Lower rate categories: 8-12% (e.g., 8% for computers)
- Variable rates for jewelry, watches, and apparel.
These referral fees impact your bottom line, so consider them in your pricing strategy.
FBA Fulfillment and Storage Fees
Fulfillment Fees
Fulfillment fees depend on the item’s size and weight. Amazon charges more for larger, heavier items, with standard-size item fees starting around $3.06 for smaller items and scaling up to $194.95 for oversized items over 150 pounds.
Monthly Storage Fees
Amazon charges for the space your items occupy, calculated per cubic foot. Storage fees are typically higher during peak seasons (October to December):
- January – September: $0.56 per cubic foot (standard size)
- October – December: $2.40 per cubic foot (standard size)
Keeping track of storage fees helps avoid unnecessary expenses, especially during the peak season.
Long-Term Storage, Removal, and Return Processing Fees
Long-Term Storage Fees
Items stored for over six months incur additional charges. Amazon applies a long-term storage fee of $0.50 to $6.90 per cubic foot for items held between 181-365 days, and $6.90 per cubic foot or $0.15 per unit for items stored over a year. Managing inventory to avoid these fees is crucial for cost efficiency.
Removal Fees
If you need Amazon to send your items back or dispose of them, removal fees apply. The fees vary by size and weight, with standard-size items starting around $1.04 per unit and larger items going up to $14.32. Removal fees help sellers clear excess or slow-moving stock, though they add to your overall expenses.
Return Processing Fees
Amazon charges return processing fees for categories with high return rates, excluding apparel and shoes. Return fees range based on size and weight, starting around $1.78 for smaller items. Proper listing descriptions and quality control can help reduce return rates and related fees.
Tips for Reducing Amazon FBA Fees
Managing FBA fees doesn’t have to be overwhelming. Here are some tips from Plugbooks for optimizing your costs:
- Optimize Packaging
Using smaller and lighter packaging helps reduce fulfillment fees, especially for items eligible for Amazon’s “Ships in Product Packaging” program. - Control Inventory Levels
Avoid long-term storage fees by monitoring stock levels and removing slow-moving inventory. Amazon’s inventory management tools provide valuable insights for smarter restocking decisions. - Leverage Placement Options
Amazon offers different inbound shipment options to reduce distribution costs. You can avoid fees by sending inventory to multiple locations through the “Amazon-optimized shipment splits.” - Use Plugbooks for Automated Fee Tracking
Keeping track of Amazon fees can be a challenge. Plugbooks provides an automated solution by connecting your Amazon account to accounting platforms like Xero or QuickBooks, giving you real-time insights into FBA fees.
Final Thoughts on Amazon FBA Fees
Selling on Amazon FBA gives you access to Amazon’s vast customer base and Prime benefits. However, these perks come at a cost, and keeping track of Amazon FBA fees is essential for profitability. By understanding and managing these fees, you can make more informed decisions for a successful business. With tools like Plugbooks, you can automate your fee tracking and focus on scaling your e-commerce business efficiently.
For more guidance and an easy way to handle Amazon FBA fees, try Plugbooks to streamline your bookkeeping and track all Amazon fees in one place.