Selling on Amazon can be a breeze, but for those who don’t fully understand Amazon FBA fees, it can get a little tricky.
Since its inception, eCommerce businesses have taken advantage of the many opportunities that Amazon provides – an enormous number of potential customers being one.
So it makes sense, right? More customers = more sales. And for the most part that’s true!
Other online business opportunities such as the Amazon Buy Box are also available to Amazon Sellers (but more about those winning strategies here!)
However, correctly calculating Amazon FBA fees is essential for a business to accurately project their product profitability. Just as your business calculates time and materials into the price of every product and service you produce, Amazon FBA fees can slip by the wayside.
And so, in a business world full of technical jargon, we are here to break them down for you.
The Amazon FBA Program
The red pill or the blue pill?
If you take the red pill, you sell via Amazon all by yourself. That requires
- Packing each order
- Arranging individual shipping
- Storing existing products
- Providing attentive customer support
For every single order.
This is acceptable, if your business sells very few items that have an incredible profit margin and can support you (that would be the dream, wouldn’t it?!) In reality you have to sell much more to make a living and you spend more time looking after existing products and orders than you actually do creating new ones!
Or you take the blue pill. The Amazon FBA program.
Now of course this includes Amazon FBA fees (but we will get there soon) but the FBA program allows you to simply ship your products to Amazon.
Once at Amazon, the products are stored in secure fulfillment centres, and the Amazon team pick, store, pack and ship the products. By letting a professional team take care of the work, you can scale up your business and expand your customer base in no time at all.
Benefits of Paying Amazon FBA Fees
There are several primary benefits to using fulfillment by Amazon, these include:
Is it any surprise that Amazon’s search algorithm gives priority to products in the FBA program? Absolutely not.
This means that as customers search for products, FBA program products will place far higher in customer searches. The higher up your products are, the more sales you make.
More Appealing Delivery
Who loves free delivery? The answer is everyone.
Under the Amazon FBA program, your products immediately become eligible for Free Shipping, Amazon Prime two-day free shipping and many more. This automatically makes your products more desirable, and features the Amazon Prime logo on your products.
One of the most attractive selling points is ease of return. Without decent customer support, potential customers will fail to follow through on their order. However if you have excellent customer support, you will build customer retention.
Well thanks to your Amazon FBA fees, you have a dedicated customer support team available to deal with any issues that may arise. The majority of the time they will not be needed (because your products are high-quality) but simply having that option is enough to make more sales!
Amazon FBA Fees: A Breakdown
The moment you have waited for – our full breakdown.
In essence, Amazon FBA Fees revolve around two separate fees:
- Amazon Fulfillment Fees
- Inventory Storage Fees
And both of these fees depend upon the products that you are selling, and the channel that you are selling on. So each and every product must bear in mind:
Size of Product
Broadly speaking there are two main categories, with sub-categories dividing your products more specifically. Standard size products, when fully packaged, should weigh under 20lbs (9kg) and not be larger than 18” x 14” x 8” (45 x 35 x 20 cm)
For the full categories, see here:
|Product Size Tier
|Longest Side (Inches)
|Median Side (Inches)
|Shortest Side (Inches)
|Length + Girth (Inches)
|Large standard -size
Once you have identified the product size tier of your products, you also need to be aware that there are other fees involved with certain items. Items which are deemed “dangerous” have added fees on top. If you are selling T-shirts, there are separate charges for such apparel.
“Multi-channel fulfillment” is the opportunity to use Amazon fulfillment centres to organise sales through your own website.
There are more expensive Amazon FBA Fees involved in multi-channel fulfillment, but the bonus is that they take care of everything for you. The FBA fees are slightly more complex because they take into account:
- Product Size Tier
- Number of Units (up to 5 at a time make fees cheaper)
- Delivery Speed
- Lithium Batteries Included (extra fees for each unit)
Monthly Storage Fees
All of your FBA products are stored in Amazon’s fulfillment centres. This means that you have monthly charges to “rent” your storage space. The rates vary greatly depending upon the season, and you are charged per cubic foot.
|January – September
|October – December
But if your products are classed as dangerous, the following charges apply:
|January – September
|October – December
Other Charges Apart From Amazon FBA Fees
Monthly Selling Fees
Essentially your “rent” for using the Amazon site. A monthly charge in return for Amazon hosting your items online.
A commission on every item that you sell via Amazon.
Stock Removal Fees
If you want to remove unsold products from their fulfillment centres (to make room for more popular products) Amazon charges stock removal fees for doing so. This includes if the products are being returned to you personally.
Amazon FBA Export Fees
A wider market obviously involves access to international markets. In certain cases, your products will have to pay export fees as a result. This will be added to your standard Amazon FBA Fees.
Selling via Amazon is a profitable venture for thousands of businesses. There are costs involved, but more often than not your SME can scale up its business with this advanced market access.
Amazon FBA fees may feel daunting and costly but remember that all of the complex and time-consuming work is taken care of for you. With this in mind you can focus on creating the best-quality products and services and calculating your Amazon FBA Fees.
Without proper foresight and calculation your business could lose its profit margins on every sale. That is why calculating product profitability is so important to businesses.
Luckily there are tools that can help.
Online Business Tools
Seller Central Connect provides you with a product-by-product view of Amazon Seller and FBA fees alongside in-depth reports so that you can make the fully-informed important decisions that it takes to run a successful business. It also provides fully-synched order management, automatic repricing to win the Amazon Buy Box, and much more!
But if you are looking ahead to calculate fees, then Product Finder is the tool for you.
This product profitability tool can look up items, and produce a complex, detailed report listing everything you need to calculate a potential business venture. These reports include:
- Amazon Specific Internal Number (ASIN)
- Potential Brands Available
- Buy Box price (but more about winning the Buy Box here)
- Amazon Referral Fees
- Amazon FBA Fees
- Total payout after charges and fees
The advantages these tools offer are invaluable to any Amazon Seller and allow our clients to build up successful, lasting businesses in any industry.
So get in contact with a member of our team today! They are available to answer any queries you may have about our products. Be sure to check out our guides section where we provide tips and tricks for businesses looking to succeed in eCommerce!
SuperDisty – Your Passport to Online Markets