Fulfillment by Amazon (FBA) is a powerful tool for eCommerce sellers, allowing them to leverage Amazon’s vast fulfillment network. However, understanding Amazon FBA fees is crucial for profitability. In this guide, we break down all the costs associated with FBA fees, providing a clear picture of how much it really costs to use Amazon’s fulfillment service.
What is Fulfillment by Amazon (FBA)?
Amazon FBA is a fulfillment service where Amazon FBA sellers store their products in Amazon’s warehouses, and Amazon takes care of storage, packing, shipping, customer service, and returns. While this model offers convenience and scalability, it comes with various fees that can impact your bottom line.
Types of Amazon FBA Fees
Amazon charges different types of fees for its fulfillment services. These include:
A. Fulfillment Fees
The fulfillment cost per unit covers order picking, packing, shipping, handling, customer service, and returns. These costs depend on your product’s weight and dimensions. The shipping weight is determined by the unit or dimensional weight, whichever is greater.
Amazon has different costs for categories. E.g. if you have these items to sell then you have to pay the below fees:
1. Amazon FBA Cost in the US Marketplace
2. Amazon FBA Cost in the UK Marketplace
Read Amazon UK Official FBA fees structure here: Amazon.co.uk
3. Amazon FBA Referral Fees in the Indian Market
Read Amazon India’s official fee structure here: Amazon.in.
B. Storage Fees
FBA Storage Costs: US, UK & India
| Month | Country | Standard Size | Oversize |
|---|---|---|---|
| January - September | US | $0.78 per cubic foot | $0.56 per cubic foot |
| UK | £0.40 per cubic foot | £0.28 per cubic foot | |
| October - December | US | $2.40 per cubic foot | $1.40 per cubic foot |
| UK | £1.20 per cubic foot | £0.80 per cubic foot | |
| India (All Year Round) | ₹45 per cubic foot per month | ||
C. Removal and Disposal Fees
1. Amazon US FBA Removal Fees
Read Amazon US Official Removal Fees Details Here: https://sellercentral.amazon.com/help/hub/reference/external/G9W7FVTLY343ZBKN
2. Amazon UK FBA Removal Fees
Read Amazon UK Official Removal Fees Details Here: https://sellercentral.amazon.co.uk/help/hub/reference/G200685050?locale=en-US
3. Amazon India FBA Removal Fees
Read Amazon India Official Removal Fees Details Here: https://sellercentral.amazon.in/help/hub/reference/G200685050?ref=ag_200684750_cont_G201074400&locale=en-IN
Additional Considerations in Amazon FBA Fees
1. Amazon Referral Fees
A. Amazon Referral Fees in the US
Separate from FBA fees, Amazon also charges a referral fee on each sale, which varies by category (typically 8% – 20%).
Read Complete Amazon US Referral Fees: https://sell.amazon.com/pricing#referral-fees
B. Amazon Referral Fees in the UK
Read Complete Amazon UK Referral Fees: https://sell.amazon.co.uk/pricing#referral-fees
C. Amazon Referral Fees in India
Read Complete Amazon India Referral Fees: https://sell.amazon.in/fees-and-pricing#:~:text=Referral%20Fees%20by%20Category
2. Amazon Selling Plan
Amazon provides two selling plans tailored for both low and high-inventory sellers: the Individual Plan and the Professional Plan. Each plan offers distinct features to suit different business needs.
Read more about choosing the right plan in this blog: https://xsellrate.com/choosing-the-right-amazon-seller-plan-individual-vs-professional/
A. Amazon US Selling Plans
Check More Details About Amazon US Selling Plans: https://sell.amazon.com/pricing#selling-plans
B. Amazon UK Selling Plans
Check More Details About Amazon UK Selling Plans: https://sell.amazon.co.uk/pricing?ref_=sduk_soa_sell_pricing#selling-plans
C. Amazon India Selling Plans
Amazon India does not offer specific selling plans but provides all features for registered brands. However, standard fees and charges still apply to sellers.
3. Amazon FBA vs. FBM (Fulfilled by Merchant)
Comparing Amazon FBA with FBM is essential. FBM allows sellers to handle fulfillment independently, avoiding Amazon FBA fees but losing Amazon Prime eligibility.
Read Related Blog: https://xsellrate.com/fba-vs-fbm/
How to Reduce Amazon FBA Costs?
To maximize profits, sellers can take these steps:
- Optimize Packaging: Reduce product size to fit into a lower fee tier.
- Monitor Inventory Levels: Avoid long-term storage fees by managing stock efficiently.
- Use Amazon’s Fee Calculator: Estimate costs before sending inventory.
- Leverage FBA Discounts: Consider Small and Light for qualifying items.
What are the benefits of Amazon FBA?
BA offers numerous advantages to sellers, including:
1. Prime Eligibility: Products fulfilled by Amazon are eligible for Prime shipping, attracting more customers who prefer fast, free shipping.
2. Hassle-Free Logistics: Amazon handles order fulfillment, packaging, shipping, and customer service, allowing sellers to focus on growing their business.
3. Scalability: With FBA, sellers can scale their business without worrying about storage or operational logistics.
4. Multi-Channel Fulfillment: Sellers can use Amazon’s fulfillment network to ship orders from other sales channels, including eBay and Shopify.
5. Improved Buy Box Chances: FBA listings often have a higher chance of winning the Buy Box, leading to increased sales.
6. Reliable Customer Service and Returns Management: Amazon provides professional customer service and easy return handling, improving buyer satisfaction.
7. Faster Shipping Times: Amazon’s vast distribution network ensures fast and reliable shipping, enhancing the customer experience.
8. Increased Credibility and Trust: Customers tend to trust products fulfilled by Amazon more than those shipped by individual sellers.
Conclusion
While FBA provides convenience and scalability, the Amazon FBA fees can add up quickly. Understanding the cost structure helps sellers make informed decisions and optimize profitability. By carefully managing inventory, packaging, and pricing, sellers can reduce costs and maximize their earnings on Amazon. Amazon FBA provides multiple advantages, including an automatic Prime badge, increased chances of winning the Buy Box, enhanced product visibility, and streamlined fulfillment. These benefits help your business stand out and attract more customers.
If your goal is to focus on business expansion while entrusting your Amazon seller account to experts, Xsellrate offers a dedicated team of professionals. They specialize in optimizing listings for increased sales and delivering exceptional PPC performance to maximize your growth. Contact us today to begin your successful Amazon seller journey!
Would you like a detailed cost comparison between FBA and FBM included? Let us know in the comments.