Amazon FBA Fees: How to Calculate What FBA Will Cost You

Have you heard about the wonders of Fulfillment by Amazon (better known as Amazon FBA) and how it works?

No, it’s not too good to be true.

Amazon FBA is a legitimate way to streamline your storage, shipping, and customer service. You can trade anywhere, anytime and still ensure reliable, on-time delivery.

However, it is not free.

You have many Amazon FBA fees to consider, and these are in addition to the normal referral, refund, and selling fees.

However, don’t let the trigger word “fee” stop you. Despite the added cost, there’s a good chance that Amazon FBA is still worth the investment, both financially and financially. Y Prospects for reconciling work and personal life.

Below, we’re going to break down each Amazon FBA fee to help you understand where every penny of your money is going. We’ll also give you calculators to help you estimate your costs and expected ROI.

But first, is it worth the hassle of calculating these fees on Amazon FBA?

Why sell through Amazon FBA?

Amazon FBA may have some additional costs, but you get a lot for your money. Here are some reasons why you should consider it:

  • Piggyback on Amazon Reputation: Consumers trust Amazon. When they make a purchase, they know they will receive it (in days, not weeks).
  • Provide super fast shipping: Today’s modern shoppers expect 2-day delivery. Anything more than that, and you’re late. With Amazon FBA, you can keep up with expedited shipping even from your top competitors.
  • Consolidate your processes: Tired or wary of managing a warehouse, customer service representatives, and shipping teams? Deliver it all to Amazon FBA’s one stop shop.
  • Turn in essential work: Running a business is hard enough without doing all the packaging, labeling, shipping, and customer service yourself. You have bigger fish to fry – pass the minutiae to someone else.
  • Work (or not) your schedule: When you work with Amazon FBA, your products are processed, delivered, and returned on time, whether you’re in the office or on the beach.

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7 FBA Fees

Now that you’re excited about Amazon FBA, let’s take a look at the fees you can expect. Remember, we are reviewing a list of Amazon FBA fees, not all of your expenses. You will still have general Amazon fees (per item fees, referral fees, closing fees, etc.), manufacturing fees, website hosting, and more.

Here are the 7 Amazon FBA fees:

1. Amazon FBA Fulfillment Fee

The FBA fulfillment fee is also known as the pick and pack fee. Amazon charges a unit fee to find, tag, and ship items to customers. The fee is determined based on the size, weight, and category of the item. Please refer to Amazon’s rate sheets to determine what fulfillment fee you will be charged per unit.

First, look at your product type. Next, find out the size level. Need help figuring out what size package you have? See how Amazon determines the product size level here. After that, you’ll use the weight of the shipment to determine your rate per unit.

2. Amazon FBA storage fees

Amazon charges a monthly inventory storage fee based on the size of your products. These rates vary depending on your product category and the time of year.

For example, it’s often more expensive to stock inventory just before the holiday season because Amazon has to stock additional inventory (for all other businesses) at that time.

However, you do not have to guess this number. Amazon provides rate cards to help you determine your FBA storage rates each month of the year.

3. Amazon FBA Long-Term Storage Fee

Unfortunately, Amazon FBA is not a place where you can store your extra inventory, especially if it doesn’t sell out quickly. Amazon charges a long-term storage fee for any item left in storage for more than 365 days.

FBA uses a first-in, first-out calculation to determine the age of your inventory. Some products have lower long-term storage fees, so be sure to check Amazon’s inventory status manager to identify which items have storage limitations.

4. Amazon FBA Elimination Order Fee

You may want to discard old product that isn’t selling and racking up storage fees. FBA will dispose of your goods for you, but it will cost you a fee. Prices vary based on the size and shipping weight of your products.

5. Amazon FBA Elimination Order Fee

Deletion and deletion are not the same thing. Submit a FBA removal order if you want Amazon to return your inventory to you; Submit a FBA disposal order if you want them to dispose of it.

Pickup order fees also vary based on the size and weight of your products. Please note that the prices for a removal order and a removal order are the same. However, if you apply for a removal order and then decide to dispose of it on your own, it will likely cost you a separate bill with your landfill (unless you’re selling sticky notes).

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6. Amazon FBA Unplanned Service Fee

Amazon has strict rules for preparing and labeling your products before sending them to fulfillment centers. Get it wrong and you’ll have to pay a per item fee to have it fixed. These errors can also cause delays in the sale.

7. Amazon FBA Returns Processing Fee

Amazon FBA conveniently handles all returns and exchanges for your products. However, with FBA, many item categories offer free return shipping. While this may encourage more customers to try your products, it may increase your return rate, and returns aren’t free for you.

You will be charged a per item returns processing fee for any item in the apparel and footwear categories. Return processing fees can be expensive. For example, you could end up paying $2 to $43 per item if your customers make a return.

FBA Fee Calculator

Don’t want to get out your smartphone and do the numbers yourself? No sweat. You are an entrepreneur, you don’t have to be a mathematician too.

Try this plug-and-play Amazon FBA fee calculator to have them do the crunching for you. This is Amazon’s calculator, so you can be sure it will be close to perfect.

How to use the Amazon FBA Fee Calculator

Using the calculator is quite simple. First, find the product you want to sell on Amazon. If you can’t find the product (or it doesn’t exist yet), enter estimates for the weight and dimensions of the package.

Next, enter auto-fulfillment details such as item price, typical shipping costs, storage fees, and cost of goods sold. Once you’re done, click the yellow button, “Calculate.”

The Amazon FBA Fee Calculator will process estimated costs and ROI for fulfillment by you and FBA. You can see the net profit and head-to-head margins for the two options.

However, don’t let this final number be the deciding factor. Remember the valuable time you could save that the calculator does not represent.

For example, selling through FBA might result in slightly less dollar profit per transaction, but could save you countless hours of work. That’s the time you could spend running your business and planning for the future.

Read more: What to sell on Amazon: 8 tips to find profitable products

Is Amazon FBA Right for Your Business?

That is for you to decide. Once you’ve done the math and determined the costs, it’s up to you to figure this out.

There is also not necessarily a right or wrong answer. Amazon FBA may be a no-brainer for some startups, while others prefer to control the entire shipping and delivery process.

You should also keep in mind that the decision to use Amazon FBA is not just about numbers. You need to consider other factors such as customer service, brand, and return frequency.

For example, when you ship with Amazon FBA, you lose creative power over your packaging materials. If that’s an important factor for your brand and product experience, FBA may not be the right choice for you.

Ready to Master Amazon FBA?

The world of Amazon FBA is vast, exciting, and full of potential. However, it is far from simple.

Instead of learning through trial and error, accelerate your journey from beginner to FBA pro with our free training: How to Sell on Amazon FBA.

Melissa Vong will be her instructor, and Jeff Bezons practically paid for her house. He has launched 2 multi-million dollar brands on Amazon using his “main product method” and now he is breaking down his formula for success for you.

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