Amazon Fba Fees : The Complete Guide For Sellers
- Moritz Bauer
If you want to sell on Amazon, the first question should be whether it will be profitable or not.
In fact, you have to make profits, or you dont have a business.
And of course, you have to keep in mind manufacturing costs per unit, shipping costs, taxes, etc
However, you also have to consider Amazon fees like fulfillment fees or fees for your Amazon seller account.
So, if you want to learn more about Amazon seller fees, youve come to the right place.
This article is the complete guide to Amazon seller fees for 2022.
Heres what we will cover:
Lets get started.
A Guide To Amazon Seller Fees
With its 150 million unique monthly visitors, Amazon is a popular choice for online sellers looking to expand their brand and increase their sales. However, growing your profits using Amazon requires an understanding of how much it costs to sell on Amazon, and what you can do to reduce that cost. This guide to Amazon seller fees explains it all, from the cost of listing on Amazon to reducing your Amazon fulfillment costs.
Amazon Fee Changes 202: Significant Fee Updates
Amazon regularly introduces changes to their FBA fulfillment fees in order to complement the changes in the global eCommerce industry. This year, the tech giant introduced significant changes in core FBA fulfillment fees, which took effect on January 18, 2022.
Amazon made some significant changes to its 2021 fulfillment fees in response to the COVID-19 pandemic, which benefitted shoppers and sellers alike. Since the pandemic started, Amazon has shown concern and support to sellers.
As a testament to Amazons support to the eCommerce community and on behalf of the Amazon sellers, the company absorbed over $5 billion in COVID-related expenses in 2020 and an additional billion more in the first half of 2021.
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Amazon Fba Fees For Non
You can also use Amazon FBA for products that are sold on channels other than Amazon. For instance, if you have a dedicated website for your product, then you can use Amazon FBA to fulfill your orders without having to worry about doing it yourself. Amazon calls this Multi-Channel Fulfillment or MCF for short. It is worth noting that Amazon FBA fees for MCF are relatively higher.
Amazon understands that you may have a variety of shipping options for the products listed on your site. With that in mind, Fulfillment by Amazon has designed its MCF fees for a variety of shipping options: Standard , Expedited , and Priority . These prices have been mentioned in the tables below, for two product-size categories Standard and Oversize.
Standard 3-5 business day shipping
|$78.30 + $0.80/lb above first 90 lb|
|Special oversize||$143.30 + $0.92/lb above first 90 lb|
Items such as those that have Lithium batteries or the items that are sold with them will have an additional cost of $0.11 per-unit fulfillment fee.
From the prices mentioned above, it is evident that the more products you sell on your website, the cheaper it will be for you to use the Fulfillment by Amazon. This is especially true if your website is selling more products than your channel on Amazon.
How Much Can You Realistically Make With Amazon Fba
This depends on the scale of your business, but an FBA seller can do very well with a bit of common sense and attention to detail. This could be knowing when to push a certain product. It could be choosing the right time and product for a savvy coupon email marketing campaign.
Or it could be by saving those crucial pennies on a product by closely analyzing whether it should be shipped with FBA or another method. Amazon is a vehicle success for many businesses, but you have to make sure youre firmly behind the wheel.
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Additional Fba Costs To Consider
Fulfillment fees and storage costs are just your two main costs. There are additional fees for the following scenarios:
- Labeling Amazon applies barcode labels on a per-item fee
- Prep Service Amazon preps your inventory for storage on a per-item fee
- Repackaging Amazon repackages your returned items to be resold
- Long-term inventory storage When products are stored in an Amazon warehouse longer than 365 days
- Unplanned services If your inventory arrives at warehouse without proper preparation or labeling
- Returns processing Whenever a customer returns the product
- Removal order If you ask Amazon to return or dispose of your inventory in a their fulfillment center
- Oversize items Have special handling fees per shipment
As you can see, FBA costs can vary depending on your business and the type of items you sell. You will face additional fees if you have very large items, inventory with long-shelf lives, or want to use FBA just during the holiday season.
Enter Your Product And Order Details
Enter the following:
- Number of orders per month
- Average number of items per order
- Average sale price per item
- Average production cost per item
- Average item weight and dimensions
The weight and dimensions allow the calculator to compute your fulfillment and storage fees, while the cost, pricing, and order information factors into margins, profitability, and seller fees.
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Other Fba Fees Explained
Depending on your business needs, using FBA to fulfill Amazon orders may incur additional fees.
Product Return fees
For example, if your product is eligible for free returns through Amazon Prime, you will have to pay an additional fee for FBA returns.
Inventory removal fees
In addition, if you decide you no longer want to use FBA, it can be costly to remove your inventory from their fulfillment centers. If you choose to have Amazon remove and return your inventory to you, theyll charge $0.50-$0.60 per item depending on the item size. For Amazon to dispose of your inventory for you, itll cost you $0.15 to $0.30 per item.
Amazon has very strict seller requirements, and they also use fees to penalize sellers for not following their rules . For example, Amazon will charge a labeling fee to sellers who do not follow their strict barcode label specifications for FBA stock. An unplanned FBA prep fee is charged to sellers who have not prepped products in accordance with the stringent packaging and prep guidelines.
Package prep fees
Of course, you can always choose to have Amazon prep and package products for you for an additional fee. Depending on your margins and order volume, this can either prevent hassle for your business or incur unnecessary additional costs.
Long-term storage fees
Amazon Fba Costs And Fees
Amazon FBA costs vary based on the item type, dimensions, shipping weight. Regardless of the amount, the fees incurred by sellers include every step of the fulfillment process.
Fulfillment by Amazon categorizes the dimensional weight of items as either Standard or Oversized.
Starting April 20, 2022 amazon implemented a new 5% fuel and inflation surcharge for all FBA fulfillment fees.
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Amazon Fba Monthly Storage Fee
Amazon charges monthly inventory storage fees between the 7th and 15th day of the month following the month for which the fee is applicable. For instance, if you want to see your inventory storage fee for January, take a look at the February Payments report transactions from February 7-15.
Besides, the fee varies based on product-size tier and the time of the year. Though standard-size products are smaller than oversize products, they need complex and costly shelving and bins for storage. The fee is charged by the cubic foot. So overall storage fees for standard-size products may be less than those for oversize products, based on volume.
|$2.43 per cubic foot|
Amazon FBA Long Term Storage Fee
When the inventory is in the fulfillment center for more than 365 days, Amazon charges a monthly long-term storage fee of $6.90 per cubic foot or $0.15 per unit, whichever is greater. Amazon calculates long-term storage fees on the 15th of each month.
Fba Dangerous Goods Fees
One additional factor to consider when calculating your products FBA fees is the products Fulfillment Classification Status. If your product is potentially classified as a Dangerous Good, Amazon will request that the product undergoes FBAs Hazmat Review process. This process will require you to submit documentation, generally in the form of a Safety Data Sheet, regarding the physical and chemical characteristics of your product. If Amazon determines that your product is classified as a Dangerous Goods, you will have to be admitted into the FBA Dangerous Goods Program to utilize FBA. Currently, this fulfillment program is invite-only, but sellers can also join a waitlist to be admitted. If your Seller Central account has been admitted into the FBA Dangerous Goods Program, you are then able to fulfill your Dangerous Good products through Amazons fulfillment network. However, there is an additional per unit FBA fee that your products shipment will incur. The FBA fees for a Dangerous Goods product can be found in the table below:
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Amazon Fba Seller Fees Explained & The Costs To Sell On Amazon
Have you ever wondered how Amazon merchants selling $2 items can possibly make a profit? The truth is that they are not.
In fact, most sellers fail to calculate all of the Amazon seller fees and end up losing money as a result.
To make matters worse, Amazon doesnt make it easy for you to calculate all of your costs and there are many hidden fees that Amazon doesnt tell you about.
Because Ive been for many years now, I wrote this post to help you understand all of your costs including all unexpected Amazon seller fees.
Ill also show you how to use Amazons FBA calculator and enumerate all of your Amazon FBA costs.
Are you interested in creating a strong, defensible brand for your products? If so, I put together a comprehensive package of resources that will help you launch your own online store from complete scratch. Be sure to grab it before you leave!
Audit Your Fba Invoices And File Claims
Many FBA sellers are not aware that there may be discrepancies in the fees that Amazon has charged them, and that they can claim a reimbursement under the FBA inventory reimbursement policy. Here are the key points to know.
In our experience, the average annual fee discrepancy ranges between 1% and 3% of annual FBA revenue. In other words, if you claim back all the FBA reimbursements you are entitled to, it could add significantly to your net profit margin. Another way to look at it is that for every 100 units shipped to FBA, one to three units might experience a discrepancy somewhere along the way.
Bear in mind that when Amazon provides an FBA reimbursement, they pay the retail value of the affected inventory, not just the cost of the inventory. So you get back the profit you would have made on that inventory, as well as the money you spent to buy it.
You only get a limited time to make claims. Amazon allows 9 months to reconcile Amazon FBA inbound shipments in the US, and 6 months in the EU. You get 18 months to claim for lost, damaged, disposed, or removed units, and incorrect customer refunds. For overcharged fulfillment fees, you only have 90 days to file a claim.
Seller Support might contest your claims, or offer a lower reimbursement than you claimed. You need a good understanding of the fee and reimbursement policies, and how to accurately reconcile your data, so you can make the case for a full refund.
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How Is Fba Cost Calculated
For every FBA order you receive, Amazon charges you for storage costs and the cost of shipping your items. In addition, Amazon charges a referral fee for using the FBA service.
This isnt to say that FBA is a bad choice: many a merchant posts better profits using this method despite the fees. However, it would be naive to not analyze whether the products in your inventory would benefit from fulfillment by Amazon more than if you shipped them yourself and circumvented storage fees.
Offer: Try Fba For Free*
FBA specific fees waiver offerTry FBA at no additional cost!we will waive off FBA specific fees
- We pick up your shipment from your doorstep for FREE
- We store your products in our Fulfillment Centre for FREE
- And you can remove it anytime for FREE
Example :Product Info:Nokia 105 1000The example mentioned above is for illustration purpose and charges may vary
- Transportation to FC charges The discount will be given upfront when you choose ‘Amazon inbound Pick-up Service ‘. The charges will be shown as Zero for the first 100 units or first 3 months. The inbound discount is capped to Rs 1000.
- Storage & Removals Fees You will not be charged for Storage and Removal fee for the first 100 units or first 3 months.
Please note that the removal discount will be applicable post 24 hours of launch on FBA. Also, Pick and pack fee will continue to be charged as usual.
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Estimate Your Fees So That You Can Contest Any Discrepancies You Might Find
How can you catch any mistakes if you dont know what fees should be? Its possible that shipping weights are not calculated correctly by FBA, and in these cases along with a few other scenarios, you can request fee reimbursements.
Tracking your Amazon fees, however, is easier said than done. Amazon doesnt quite give you the tools you need to make it easier, but A2X does.
Amazon Fba Storage Fees By Season
*Smaller standard products require more complex shelving, drawers, and bins for storage.
As shown in the table above, Amazon FBA fees increase dramatically during the holiday season. This is something to watch closely if you use FBA, and its a major reason that volume sellers rarely use FBA as their sole storage option.
Instead, power sellers often store the bulk of their inventory themselves in cheap storage units or a company warehouse. Then, they periodically ship just enough stock to FBA to cover forecast sales.
Products that fall into FBAs dangerous goods categorywhich includes items such as laptops, smartphones, household cleaners, spray paints, and cosmeticsincur higher storage costs. Read about FBAs Dangerous Goods Program to learn more.
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What About Claim Codes And Discount Coupons
If youre selling your item at a discount so the customer can type in a claim code at checkout for a reduced price, the Amazon referral fee will be based on a percentage of the sale price, not the original full price.
To explain this further, imagine youre selling a pristine hairbrush for $30. Your referral fee would usually be 15% of the sale price . However, if you offer your customers a discount of 50%, they can type in a claim code at checkout to get the hairbrush for $15 instead.
As a result, youll only have to pay a referral fee of $2.25 which is 15% of the $15 sale price.
Optimize Products With Borderline Sizes And Weights
FBA fulfillment fees are based first on size, within product size tiers defined by Amazon. Products defined as standard size and under 3 lb are only charged based on which weight band they fall into. Products heavier than 3 lb also have a variable weight fee applied. For example, a small standard size product weighing no more than 10 oz will attract a fulfillment fee of $2.50.
The use of size and weight tiers means that products that are just a little larger or heavier than the top end of a band will be charged higher fees sometimes much higher fees.
Lets look at another example. A large standard size product that weighs 16 oz will have a fulfillment fee of $3.48, while a product of the same size weighing 17 oz will be charged at $4.90. Thats an additional fee of $1.42 and 41% more than the lower band. If you sell 10,000 products a year that could be modified a little so they fall into the lower of these bands, you will save $14,200.
So, one of the first steps that all sellers should take to lower their fees is to check which size and weight band their products fall into. Heres where to find the current product size tiers and FBA fulfillment fees. An extract is shown below.
The first thing to look for is any products that are right at the bottom end of a size or weight band, as in the example given above. How can you trim those products down?
But to make a quick saving on FBA fees, take a borderline product and see if you can modify it in one of these ways:
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How To Use This Spreadsheet
This is an embedded Excel Spreadsheet. Fill in the Inputs columns in blue. The spreadsheet will automatically calculate important outputs in yellow. The spreadsheet has four categories of fees: Amazon FBA fees, Amazon Referral Fees, Amazon Storage Fees, and Costs of Goods.
You can download this spreadsheet by clicking the button on the bottom of the worksheet. The password for editing purposes is ecomcrew.
Can We Make Money Selling Our Dvd Fba
So with a target selling price of $12.99, I calculate that the cost of selling my Dirty Dancing BlueRay DVD at $6.64, giving me a return of $6.35. Remember, I paid $3.50 at the bankruptcy sale, so my net profit for this item is $2.85.
I have not factored in here the price to ship the item into the Amazon warehouse. This will vary depending on your location, the carrier you use, and the number of products you are shipping at any one time.
As a rule of thumb, if you budgeted $0.20 per item for small products like DVDs, then you wouldnt be too far off.
$2.65 doesnt sound like a huge return on an item that costs $3.50 and sold for $12.99. But you need to think about Amazon as a low-margin high-volume business opportunity. Youll face stiff pricing competition from other third-party sellers and Amazon themselves.
But there are also millions of shoppers that buy from the site daily. So if you choose to sell via Amazon FBA, look to make volume sales rather than fewer higher-margin sales.
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