Selling through Amazon’s Fulfillment by Amazon (FBA) program can be a great way to grow your business and reach a massive audience. However, success comes at a cost—Amazon charges several fees for using the FBA program, which can significantly impact your profits if you’re not careful. To plan effectively and maintain healthy margins, it’s crucial to understand the fees involved.

Here’s a breakdown of the fees you should expect as an Amazon FBA seller and how working with an Amazon consulting services can help you manage them effectively.

Referral fees

Referral fees are a commission Amazon charges for every sale you make on the platform. The fee is based on a percentage of the product’s total sales price, including the item price, shipping cost, and any gift-wrapping charges.

• Fee rate: Referral fees range from 6% to 45%, depending on the product category. Most categories, such as electronics, toys, and home goods, charge around 15%.
• Minimum fee: Many categories also have a minimum referral fee of $0.30 per item sold, which applies even if the percentage fee would be less than that amount.

For example: Selling a $20 product in a 15% category will incur a $3 referral fee. If you sell a low-cost product, such as $2 in the same category, the $0.30 minimum fee applies instead of the percentage.

FBA fulfillment fees

Fulfillment fees cover the cost of picking, packing, and shipping your products to customers. These fees depend on the size and weight of the item.

• Fee structure: Amazon categorizes products as either standard-size or oversize and charges accordingly.
• Fees for standard-size items: Small items start at around $3.22 per unit. Larger items or heavy products can cost upwards of $10.00 per unit.
• Fees for oversized items: These can cost significantly more, depending on the dimensions and weight, starting around $9.39 and increasing with size and weight.

If you sell bulky items, fulfillment fees can eat into your profit margins quickly. It’s crucial to factor these costs into your pricing strategy.

Monthly storage fees

Amazon charges storage fees for keeping your inventory in their warehouses. These fees vary based on the time of year, with higher rates during peak seasons.

Monthly fees (per cubic foot):

• January–September: $0.87 per cubic foot for standard-size items.
• October–December: $2.40 per cubic foot for standard-size items.
• Oversize items are charged slightly lower rates but still increase during the holiday season.

High storage fees can add up if you hold excess inventory or fail to move products quickly.

Long-term storage fees

In addition to monthly storage fees, Amazon imposes long-term storage fees for inventory that sits in their warehouses for over 365 days.

• Fee amount: $6.90 per cubic foot or $0.15 per unit (whichever is greater).
• What it means: If you don’t sell products quickly enough, these fees can drastically reduce your profits.

Labeling fees

Amazon requires all FBA products to have scannable barcodes for tracking. If your products don’t already have these, Amazon can label them for you at a cost.

• Fee: $0.55 per unit.
• Alternative: You can label products yourself before shipping them to the fulfillment center to avoid this fee.

Removal and disposal fees

If your products are not selling and you want to remove them from Amazon’s warehouses, you’ll incur removal or disposal fees.

• Removal fee: $0.97 to $2.13 per unit (depending on size and weight).
• Disposal fee: Similar to removal fees, but for items you choose to have destroyed instead of returned to you.

Optional FBA fees

Beyond the standard fees, there are additional charges you might incur depending on your needs:

• Prep service fees: If your items require special preparation (e.g., bubble wrapping, polybagging), Amazon charges prep fees ranging from $1.00 to $2.20 per unit.
• Inventory placement fees: If you want to send all your inventory to a single Amazon warehouse rather than multiple locations, you’ll pay a fee per item.

Refund administration fees

When a customer returns an item, Amazon refunds your referral fee but deducts a refund administration fee of either $5.00 or 20% of the referral fee (whichever is smaller).

For example: If a customer returns a $50 item in a 15% referral fee category, Amazon will refund $7.50 but deduct a $1.50 refund administration fee (20% of $7.50).

Subscription fee

All professional FBA sellers must pay a monthly subscription fee: $39.99 per month for a professional seller account. Individual sellers can avoid this fee, but they pay $0.99 per item sold, which is not ideal for high-volume sellers.

Advertising costs

While not an FBA-specific fee, advertising is an essential cost for most Amazon sellers. Sponsored ads help increase visibility and drive traffic to your listings.

• PPC costs: Pay-per-click (PPC) campaigns charge you for each click on your ad. Costs vary depending on your niche and competition, often ranging from $0.20 to $3.00 or more per click.

Working with a full-service Amazon agency can help you optimize ad spend and improve ROI by managing your PPC campaigns effectively.