When it comes to selling on Amazon using FBA (Fulfillment By Amazon), one of the first questions everyone asks is “How much is going to cost me?” This is because it’s not just about how much you’re going to make from selling on Amazon, but it’s also about how much you have to spend to get to those profits.
First off, there are two types of selling plans on Amazon. One is the Individual Plan, which costs $0.99 per unit sold. The other plan is called the Professional Plan, which costs $39.99 per month no matter how many units are sold. We will be going over the FBA fees associated with the Professional Plan.
What Are Amazon FBA Fees and How Much Are They?
There are various parts to the Fulfillment By Amazon operational process and for each component Amazon will charge a fee for those services. Below are some examples of the various FBA fees that you may be charged if you decide to use this service.
Referral (commission) Fees – this is charged for each item sold and the percentage fee amount depends on the product’s category. Generally this fee can range from 8% to 15%. This fee is basically Amazon’s commission for the listing of your product on their platform and made available to their 100 million+ customers.
Amazon FBA Fulfillment Fees – this is based on the size and weight of your product and covers the cost of shipping and logistics from Amazon. The various size tiers include FBA Small and Light, Small Standard, Large Standard, Small Oversize, Medium Oversize, Large Oversize, and Special Oversize. With each size there’s also an associated weight that would determine which size tier that your product fits into. See below for all of the tiers and their costs depending on size and weight each unit.
Monthly Storage Fees – this fee is usually based off of the daily average volume (cubic feet) of your products as well as the length of time that they are in storage at the Amazon Fulfillment Center. There’s also a long term storage fee that can be applied if your products sit in the Amazon Fulfillment Center for longer than the period set by Amazon (this time period can change sometimes, so keep an eye on these notifications from Amazon) and removal fees if you decide you want to remove your products prior to that long term storage fee being assessed.
Below is the current (as of January 2021) FBA storage fees for Amazon at this time.
Other Fees – Depending on the category that you’re selling your products there could be various other fees that could be assessed, so it’s best to ensure that you check the Amazon Seller website to make sure you don’t miss anything.
How To Calculate Amazon FBA Fees
Are you overwhelmed yet?
Now that we’ve gone over the fundamentals of what FBA Fees are and a lot of the other fees associated with selling on Amazon, we’re going to go over how to calculate it. After calculating your product’s per unit and package shipping weight as well as the per unit and package dimensions you will then be able to find which size tier that your product falls into.
However, there’s a much easier way to find out your product’s FBA Fees a lot quicker after your product’s listing is up and running on Amazon. We use the free Helium 10 Chrome Extension tool. To use, first download the Helium 10 Chrome Extension and add it to your extensions bar, which is built into the Chrome browser.
After installed, go to any Amazon listing (not just your own) and scroll down to just below the listing’s pictures and bullet points. The Helium10 Chrome Extension Tool should automatically insert a chart similar to the one below as seen in this spatula listing example.
The top chart will display the product’s Sales Ranking and below that is the Amazon FBA calculator (and the Amazon FBM calculator) that we’ll use to calculate the FBA fees. We’ll be using the FBA column. The product cost will display blank, so this is where you’ll put in your Product Costs, or your cost of goods sold (COGS).
Then press Enter. The calculator should then provide you with the product’s Amazon FBA fees, which are based off of the item and package dimensions and weight.
How To Lower Amazon FBA Fees
Depending on whether you’re at the beginning stages of first selecting a product or if you’re looking to reduce Amazon FBA fees down the road after years of selling, there’s many ways to lower these extra costs. Here are 3 of our top methods to reduce FBA Fees.
- Reduce Your Packaging Dimensions or Weight – a lot of sellers think they need to have a nicely designed package or box when they’re first starting out with Amazon FBA, but this extra size and weight can easily be reduced for most products by using poly bags. It’s also a great idea to think of the product size and weight when you’re in the process of researching product ideas. An inch or half of a pound could be a huge difference in the FBA fees that Amazon applies to your products.
- Avoid Long-Term Storage Fees – Obviously you always want to track your sales and performance, but it’s also a great idea to keep track of your inventory sales rate. By keeping track of the rate at which you sell through your inventory this will be key for when you place another order with your supplier or when you’re getting ready to send another shipment into Amazon. You want to do everything you can to avoid long-term storage fees. If you have the ability to, another way to avoid long-term storage fees is to set up FBM. If you ever have issues selling out of stock you can always continue to sell with FBM on the same listing with no interruptions.
- Fulfillment Fees – Not everyone has this option, but if you have multiple products that can be bundled together and sold as a bundle this is a great way to avoid individual fulfillment fees. Also, this can work the other way around depending on the size and weight of your products you might be able to save some fees by fitting your product into a lower size tier if it can be broken up into separate products to sell.
