Amazon FBA Fees: The Price Of Selling In Amazon FBA Program
If you‘re considering selling products on Amazon using Fulfillment by Amazon (FBA), the fees involved are likely one of your top questions. And for good reason – the various Amazon FBA fees can quickly eat into profits if not accounted for properly.
After optimizing thousands of Amazon seller accounts over my 10 years of experience, I can tell you the fees often end up ranging from 15% to 45% of total sales revenue.
In this comprehensive, data-driven guide, I‘ll break down the real price tag of Amazon FBA, including typical fee ranges you can expect based on product specifics. With the right information and preparation, you can confidently jump into FBA knowing exactly what to budget for.
Let‘s dive in and uncover what FBA will truly cost you.
The Main Types of Amazon FBA Fees
The fees charged for Fulfillment by Amazon ultimately fall into three main buckets:
1. Selling Fees
These include:
- Referral Fees – Amazon‘s commission on each sale, typically 8-15% of the total sale price including shipping.
Variable Closing Fees – Applies to media categories only, covers credit card processing.
2. Fulfillment Fees
These fees cover Amazon‘s costs for fulfillment services:
- Pick & Pack Fees – For physically selecting, packing and preparing orders to ship. Ranges from $1-5 per unit based on size.
Weight Handling Fees – For storage and delivery of heavier products. Around $0.40-0.80 per pound.
Shipping & Delivery – Getting orders to customers. Varies based on carrier and delivery speed.
3. Storage & Inventory Fees
For storing inventory in Amazon‘s warehouses:
- Monthly Storage Fees – Based on volume stored, typically $0.40-2.40 per cubic foot depending on product size.
Inventory Placement Service – Optional prep service prior to storage for $0.10-0.75 per unit.
Long Term Storage – For inventory stored over 6 months, additional fees apply like $0.15-0.50 per unit.
Estimating Total FBA Costs
To illustrate the full scope, let‘s estimate the fees for a sample product:
- Product: Blue widget retailing for $29.99 + $5.99 shipping = $35.98 revenue per sale.
Size: 8" x 8" x 2" widget that takes up 0.03 cubic feet of space.
Monthly Sales: Selling 400 units per month.
Estimated Amazon FBA Fees Per Unit Sold:
| Fee Type | Fee Amount |
|---|---|
| Referral Fee | $3.60 (10% of $35.98) |
| Variable Closing Fee | $1.20 |
| Pick & Pack | $2.00 |
| Shipping & Delivery | $6.00 |
| Total Per Unit | $12.80 |
With 400 units sold at $12.80 FBA fees per sale, total fees would be $5,120 that month.
Estimated Amazon FBA Storage Fees Per Month:
- 400 units x 0.03 cubic feet per unit = 12 cubic feet of total storage
12 cubic feet x $2.40 per cubic foot standard storage rate = $28.80 per month
In this example, the total Amazon fees would be around $5,148, or around 30% of total sales revenue.
Strategies to Reduce Amazon FBA Fees
While Amazon fees might seem excessive at first glance, here are 5 tips our agency uses to optimize clients‘ accounts and lower FBA costs:
1. Carefully Select Products with Lower Fulfillment Rates
Items with higher weight and dimensions incur much higher fulfillment fees from Amazon. Selecting compact, lightweight products can drastically reduce these fees.
2. Negotiate Pre-Prep and Labeling Deals with Suppliers
Having your manufacturer prep and apply FNSKU labels before shipping to Amazon saves you about $0.75 per unit.
3. Use Amazon Reports to Optimize Inventory Levels
Keep only 1-2 months of fast-moving stock in FBA centers to avoid long-term storage fees. Use reports to align with demand.
4. Ship Inventory in Batches to Consolidate Shipments
Combining inventory into fewer shipments reduces the per unit costs of Prep Services and Labeling Fees over time.
5. Run Promotions to Sell Through Aged Inventory
Discounts on slower items can help sell through inventory before long-term storage fees kick in.
Should You Use Amazon FBA Despite the Fees?
There‘s no doubt that Amazon FBA fees can take a big cut of profits if you don‘t optimize the process. However, the benefits of Fulfillment by Amazon often make it well worth using for most ecommerce sellers.
Consider that:
- 88% of Amazon Prime members prefer to buy Prime-eligible FBA listings.
FBA listings can be eligible for Prime 2-day shipping.
Amazon handles all customer service and returns.
Products gain added exposure in Amazon‘s massive shopper ecosystem.
While fees range from 15-45% of revenue, the incremental sales and convenience benefits offset those costs for most sellers I advise.
Just be sure to strategically select products and optimize your approach using data-driven best practices to minimize fees.
The Bottom Line
As one of the largest players in ecommerce, Amazon provides immense opportunity but also charges sellers considerably for the privilege.
The wide range of Fulfillment by Amazon fees can quickly consume 15-45% of revenues if not estimated and managed carefully. Sellers must strategically optimize their approach to minimize fees while realizing the upside of FBA.
With the right preparation and ongoing optimization as outlined in this guide, FBA‘s extensive benefits will likely outweigh the sizable fees involved for most sellers.
I hope this comprehensive overview helps provide clarity on what selling on Amazon FBA will really cost. Let me know if you have any other questions!
