Amazon FBA Fees Explained (and How to Estimate Them)

Disclaimer: It is important to note that policies and fees are subject to change. The information in this article is correct as of the published date. For the most up-to-date information, please refer to Amazon’s policies directly.

Selling on Amazon comes with many different fees. As a seller, you'll need to keep track of costs for storing, packing, and shipping your products. Also, if you join the FBA program, you get the Prime badge, which can help you sell more, but you must pay the fees.

Even with all these fees, Amazon FBA is still a great way to sell online. It's super convenient and gives you access to millions of Amazon shoppers. The important thing is to figure out if you can still make money after paying all the fees.

Let's look at these Amazon FBA fees (including some that aren't just for FBA).

TL;DR - Amazon FBA Fee Chart

Here's a high-level overview of the main FBA fees and their typical ranges:

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What Are Amazon FBA Fees?

Amazon FBA fees refer to charges levied by Amazon to fulfill orders for sellers using Fulfillment by Amazon. With FBA, you ship your inventory to Amazon’s warehouses, and Amazon handles storage, order picking and packing, shipping, and customer service.

In exchange for these fulfillment services, Amazon charges FBA fees, including:

• Fulfillment fees per unit sold
• Monthly FBA storage fees for taking up space
• Long-term storage fees for slow-moving inventory
• Return processing fees for customer returns
• Removal fees for getting your inventory back

These fees cover the expenses of running the massive FBA network, including warehouse space, staff, packaging materials, and shipping costs.

Amazon FBA vs. FBM Fees - What's the Difference?

There are some critical differences between FBA vs. FBM (Fulfillment by Merchant) fees.

As an FBA seller, you pay Amazon to handle fulfillment, while FBM sellers handle their own order processing and shipping.

FBA fees include:

• Storage fees
• Referral fees
• Fulfillment fees
• Removal order fees
• FBA prep service fees
• Return processing fees

FBM fees include:

• Referral fees
• Reporting fees (for media items)

However, there could be some additional potentially costlier charges for FBM sellers:

• Potentially higher shipping rates
• Your own labor and fulfillment costs
• No option for a Prime shipping badge

FBM shipping can be cheaper for small, lightweight products. However, most sellers use FBA to enable Prime eligibility, faster shipping, and simplified order processing.

Just be sure to factor in all costs using an Amazon FBA calculator.

Amazon FBA Costs Every Seller Should Know

If selling on Amazon FBA, these are the essential fees that could impact your bottom line:

1. Monthly Subscription Fee

First things first, you'll need to choose a selling plan. Amazon offers two options:

• Individual plan: $0.99 per item sold
• Professional plan: $39.99 per month, regardless of how many items you sell

For most sellers, the Professional plan makes more sense if they sell more than 40 items a month. It also gives them access to more tools and features.

2. Amazon FBA Referral Fees

Amazon charges a referral fee for every item sold, regardless of whether you use FBA or fulfill orders yourself.

This fee is a percentage of the total sales price, which includes the item price, shipping, and gift wrap charges (if applicable).

The percentage varies by product category:

• Most categories: 15% (e.g., Home & Kitchen, Toys & Games, Sports & Outdoors)
• Some categories: 8-12% (e.g., Computers at 8%, Automotive at 12%)
• A few categories have variable rates:some text
  • Clothing & Accessories: 5-17% depending on the total sales price
  • Jewelry: 20% for the portion of the total sales price up to $250.00, and 5% for any portion of the total sales price greater than $250.00
  • Watches: 16% for the portion of the total sales price up to $1,500.00, and 3% for any portion of the total sales price greater than $1,500.00

Some categories have lower fees for lower-priced items. For example:

• Beauty products: 8% for items $10 or less, 15% for items over $10
• Grocery items: 8% for items $15 or less, 15% for items over $15

Most categories also have a minimum referral fee of $0.30 per item.

3. Amazon FBA Fulfillment Fees

When you use FBA, Amazon stores, packs, and ships your products to customers. However, this convenience comes at a cost.

Let's break down the fulfillment fees you'll encounter:

Standard-Size Items

For most standard-size items (non-apparel), fulfillment fees range from about $3.06 to $6.92, depending on the weight. 

Here's a general idea:

• Small standard items (up to 16 oz): $3.06 - $3.65
• Large standard items (up to 3 lb): $3.68 - $6.62
• Items over 3 lb: $6.92 plus additional per-pound fees

Large and Extra-Large Items

Amazon has recently introduced new categories for larger items:

• Large bulky items (up to 50 lb): Starting at $9.61
• Extra-large items: Fees start at $26.33 and can go up to $194.95 for items over 150 lb

Apparel

Clothing items have their own fee structure, generally a bit higher than standard items:

• Small standard apparel: $3.27 - $3.98
• Large standard apparel: $4.25 - $6.81

Dangerous Goods

Expect to pay more if you're selling items classified as dangerous goods (like certain electronics or beauty products). Fees start at $4.03 for small items and go up from there.

Remember, these fees can change based on the time of year. They're usually higher during the holidays (October to December) and may be updated annually. Always check Amazon's current rates when calculating your possible fees.

4. FBA Monthly Storage Fee

Amazon charges you for the space your products take up in their warehouses. The charge is based on the space occupied, average daily units, item size, and time of year.

It also depends on the storage utilization ratio (how quickly you sell compared to how much you store).

These monthly inventory storage fees can add up quickly, so you need to understand how they work.

Basic Fee Structure

Here's a simple breakdown:

• January to September (off-peak):some text
  • Standard-size items: $0.78 per cubic foot
  • Oversized items: $0.56 per cubic foot
• October to December (peak season):some text
  • Standard-size items: $2.40 per cubic foot
  • Oversized items: $1.40 per cubic foot

Special Cases

Dangerous goods have higher rates: $0.99 per cubic foot (Jan-Sep) and $3.63 per cubic foot (Oct-Dec) for standard-size items.

5. FBA Long-Term Storage Fee

If your items sit in Amazon's warehouses for too long (over six months), you'll face an additional aged inventory surcharge:

To avoid these fees, keep a close eye on your inventory levels and remove slow-moving products promptly.

6. Amazon FBA Removal & Disposal Fees

When using FBA, there may be instances when you need to remove or dispose off your inventory. 

Removal fees and disposal fees serve two different purposes:

• Removal: Amazon sends your items back to you or to another address you specify.
• Disposal: Amazon gets rid of the items for you.

Both services' fees are the same, but the processing times and end results differ.

The fees depend on the size and weight of your items:

• Standard-size items: $1.04 to $2.89 per unit, with additional charges for items over 2 lb
• Large bulky, extra-large, and special handling items: $3.12 to $14.32 per unit, with additional charges for items over 10 lb

Note: 

• For items under 1 lb, Amazon rounds up to the nearest 0.1 lb. 
• For heavier items, they round up to the nearest whole pound. 
• Special handling items include apparel, shoes, watches, jewelry, and dangerous goods.

7. Amazon FBA Returns Processing Fees

Amazon charges a returns processing fee for most products with high return rates (excluding apparel and shoes). This fee covers the operational costs of returns and reducing waste.

Here's what you need to know:

• The fee only applies to products with return rates above a category-specific threshold.
• Your product's return rate is calculated based on returns over three months.
• Fees vary based on product size and weight.

For non-apparel and non-shoe items:

• Small standard items: Fees range from about $1.78 to $2.21 per unit
• Large standard items: Fees range from about $2.36 to $5.00 per unit, with additional charges for heavier items
• Large bulky and extra-large items: Fees start at $6.74 and can go up to $157.35 for very large items, with additional per-pound charges

For apparel and shoes, the fee structure is slightly different:

• Fees are charged for every return, regardless of return rate
• Fees range from about $1.65 to $3.89 for most items, with higher fees for larger and heavier products

Return rate thresholds vary by category, ranging from 2.9% for grocery items to 12.8% for bags and luggage. Products with fewer than 25 units shipped in a month are exempt from this fee.

Amazon will charge these fees between the 7th and 15th day of the third month following the return. For example, returns from June will be charged in September.

8. Refund Administration Fees

If Amazon issues a customer refund, they'll charge you a refund administration fee:

• $5 flat fee per return
• 20% of the item's referral fee

The lower amount applies.

9. Amazon Inbound Placement Service Fee

Amazon has introduced a new FBA inbound placement service fee starting from March 2024. 

This fee reflects the cost of distributing inventory to fulfillment centers close to customers. The fee structure is as follows:

• For standard-size items:some text
  • Small standard (up to 16 oz): $0.21 to $0.30 per unit
  • Large standard (up to 20 lb): $0.23 to $0.68 per unit, depending on weight
• For large bulky items (up to 50 lb): $2.16 to $6.00 per unit, depending on weight

These fees apply when you choose the "Minimal shipment splits" option and send inventory to a single location.

You can reduce or avoid this fee by:

1. Using the "Partial shipment splits" option (sending to 2-3 locations), which incurs lower fees
2. Choosing the "Amazon-optimized shipment splits" option (4+ locations), which has no fee

10. Other Potential Fees

Depending on your situation, you might encounter additional fees:

• Rental book service fees
• Amazon handmade fees
• Special handling fees
• Amazon restocking fee
• Closing fees
• High-volume listing fees

And so on.

How to Calculate Amazon FBA Fees

Calculating your Amazon FBA fees can seem daunting, but there are tools to help. 

Here's a simple process:

• Use Amazon's FBA Revenue Calculator: This free profitability checker tool lets you input product details and estimates your FBA fees and potential profit.
• Consider all fee types: Remember to account for fulfillment fees, storage fees, referral fees, and any applicable long-term storage or return fees.
• Factor in your costs: Don't forget to include your product cost, shipping to Amazon FBA, and any prep costs.

Here's a simple example of how to calculate Amazon's profit margin:

Let's say you're selling a small standard-size item weighing 10 oz with a selling price of $20 in the Home & Kitchen category:

• Fulfillment fee: $3.43
• Monthly storage fee (assuming 0.1 cubic feet for 1 month): $0.078
• Referral fee (15% of $20): $3.00
• Total FBA fees: $6.508

If your product cost is $8, your profit would be: $20 - $6.508 - $8 = $5.492 per unit.

Tips on How to Reduce Amazon FBA Fees

While Amazon fees may seem complex at first, a few proven tips can help minimize costs:

• Optimize Your Product Packaging: Smaller, lighter packages incur lower fulfillment fees. For eligible items, consider using Amazon's Ships in Product Packaging program.
• Manage Your Inventory Efficiently: Avoid long-term storage fees by monitoring your inventory levels and removing slow-moving items.
• Use Inventory Placement Options Wisely: Take advantage of Amazon's inbound placement options to reduce fees by sending inventory to multiple locations.
• Price Your Products Strategically: Remember that referral fees are a percentage of your selling price. Sometimes, a slight price adjustment can lower your fee bracket.
• Request Re-Measurement if Needed: If you believe item dimensions are inaccurate, ask Amazon to recheck - it often lowers fees.

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Frequently Asked Questions (FAQs)

Let's address some common questions about Amazon FBA fees:

Is Amazon FBA Cheaper?

For small, lightweight products, you can sometimes fulfill orders cheaply yourself. 

However, FBA allows you to access Amazon's massive customer base and Prime perks, which usually drive enough extra sales volume to outweigh fulfillment costs.

Can I See a Detailed Report of My FBA Fees?

Yes. Seller Central provides granular FBA fee reports, breaking down every charge at the SKU level. You can download them to Excel. 

Leverage these Amazon seller central reports by reviewing them regularly to catch issues leading to unnecessary fees.

Can Sellers Negotiate FBA Fees With Amazon?

No, Amazon's FBA fees are fixed and non-negotiable. All sellers using Fulfillment By Amazon pay the same rates. 

You can provide feedback to Amazon on fees but cannot negotiate them.

How Can Sellers Avoid Unnecessary FBA Fees?

To avoid unnecessary fees:

• Keep your inventory levels optimized to avoid long-term storage fees.
• Ensure your product dimensions and weights are accurate to prevent overcharges.
• Remove slow-moving inventory before it incurs long-term storage fees.
• Use Amazon's inventory reports to identify items at risk of accruing additional fees.
• Consider using FBM for very large or low-margin items.

Conclusion

Selling on Amazon has costs, but the vast opportunity is worth it. Monitoring FBA fees takes work, though.

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