Amazon FBA Fees Explained - Ultimate Sellers' Guide in 2020

Selling on Amazon FBA can be an entrepreneur’s dream. When exploring this new avenue for your business, you’ll need to figure in how the program will fit into your expenses. It’s imperative that you keep track of the Amazon FBA fees when selling on Amazon, so you can adjust your pricing and maximize profit.

Here is a guide to the most common Amazon FBA fees when selling on Amazon.

Amazon FBA fees can typically be broken down into six different categories. 

These are the fees you pay after you sell your product on Amazon. It will typically be a percentage of the price that the product sold for. Referral fees are usually around 15% or less, but they may vary depending on the category in which your product is listed. 

This is a flat fee applied on top of the referral fee on media items like books, videogames and DVDs. This fee is around $1.80.

As an FBA seller, you’ll be storing your products at Amazon fulfillment centers. This is where the products are picked, packed, and shipped by Amazon. The Amazon FBA fees cover the total costs to do all of that work, including paying their own employees.

These fees are calculated according to the size and weight of the order being fulfilled. Prices start at $2.41 for items weighing 10 oz. and below, and scale upward the heavier the items get. While this fee may seem like an additional cost, in the long run it will still be less expensive and time-consuming than doing the shipping yourself. 

If you’re not verified as a professional seller on Amazon, you will pay a $1 flat fee on all of the Amazon FBA products that you sell. 

In contrast, if you become a professional seller on Amazon, you will be billed a subscription fee on a monthly basis. The cost for this is $39.99 per month.

In doing this, you will avoid paying the individual seller fee, which could end up saving you tons of money in the long run, especially when sales start to grow. If you’re selling more than 40 items per month on Amazon, it’s recommended that you consider the future savings and become a professional FBA seller. 

Amazon’s fulfillment centers are large, million-acre warehouses that hold your items. However, Amazon has to protect the program and make sure that no one is taking advantage of its terms, hence their storage fees. These discourage slow-moving products from sitting too long and make sellers unable to use Amazon fulfillment centers as storage. 

Storage fees are calculated based on product size tier and time of year. Standard-size items, while smaller, may require more complex shelving and sorting solutions, so they are typically more expensive to store than oversized items.

It is also cheaper to store products with Amazon from January to September. Come the holidays (October to December), storage fees per month are higher than usual.

 Fees are calculated by cubic foot, starting at $0.69 per cubic foot for standard-size items and $0.48 per month for oversized items.

Summary of Amazon FBA Fees for Sellers

Amazon FBA Fees for Seller
It should be noted that you will not typically be charged all of these Amazon FBA fees at once. What you will pay for will depend on what you sell and which methods you use to fulfill the products.

Amazon FBA Seller Plans

There are currently two plans for sellers: individual and professional. 

Individual Sellers

Under the individual seller plan, there are no upfront subscription fees. Instead, you will pay a fee of $1 per every item sold. These plans are typically ideal for those who are in the very early stages of their Amazon FBA business and are still discovering how the program works. Individual sellers move less than 40 items per month. 

As your business grows, you can choose to remain an individual seller or move up to becoming a professional seller. The crucial decision point is determining whether the $1 per item fee will still meet your needs, or if it will end up costing your business in the long run. 

Professional Sellers

Under the professional seller plan, you will be charged a subscription fee of $39.99 per month. There are no additional selling fees. Professional sellers are expected to sell 40 items or more each month. Otherwise, you’ll be subject to the same Amazon FBA fees as individual sellers. 

Amazon will charge you the subscription fee no matter how many items you sell. For this reason, you must be certain of the number of items you can move per month. If you don’t think you’ll be able to start selling 40 or more items a month, it may be beneficial to start with the individual seller plan and change to professional later on.

Other Amazon FBA Fees

Aside from the day-to-day business of selling products via Amazon FBA, there may be fees to pay when you need Amazon to perform other functions. When becoming an Amazon seller, you’ll need to consider these potential charges. 

Returns Processing Fees – Amazon FBA

Amazon may charge you a fee to process any returns for certain product categories, such as:

  • Apparel
  • Watches
  • Jewelry
  • Shoes, Handbags & Sunglasses
  • Luggage

They can also charge you a repackaging fee if your product needs repackaging for resale. 

Stock Removal Fees – Amazon Costs

If you want to get rid of any stock in Amazon’s inventory, then you may be charged with stock removal fees. This fee is charged if you ask Amazon to send your products back to you as well. 

This fee is put in place because Amazon will have to do extra work to clear out room in their warehouse. 

Inventory Placement Service – Amazon FBA Fee

The FBA Inventory Placement Service will send all of your eligible inventory to a single fulfillment center.

This means that Amazon will not divide your inventory into multiple shipments that go to different fulfillment centers. To get this service, you’ll have to pay a fee. 

Export Fees

Amazon FBA also provides you with the opportunity to export your products to multiple countries.

An export fee may be applicable to your products depending on where you’re selling them from. We hope this in-depth guide on Amazon FBA Fees help you make better business decisions in the near futur

Ebay vs Amazon - Amazon FBA Costs and Fees

eBay vs. Amazon Fees

Nowadays, eCommerce merchants have multiple options when it comes to selling their merchandise online. Some may narrow it down to two options: eBay versus Amazon – and sellers may even gravitate towards eBay since it’s the cheapest option for this service. 

The choice depends on which service will be a better fit for your business. If you’re a hobby seller and your store isn’t your main business or career, you may find that eBay is an easier option for you.

However, if you’re serious about growing your shop over time and need services that will scale along with your business, Amazon FBA Fees are going to be cheaper and more effective for your business in the long run. 

Why Should You Sell on Amazon FBA?

The Amazon FBA program was put in place to give added value services to sellers on Amazon. Here are five reasons you should choose to sell your products on Amazon.

Amazon Works for You, Sellers

Amazon puts in a ton of work for you. When you sell your products on Amazon, all you have to do is put together the products you’re going to sell and send them to Amazon’s fulfillment centers. 

From the fulfillment center, Amazon employees pick, pack, and ship your products on behalf of your business. They also handle customer service and returns, tasks that can take up a huge chunk of your time without this program.

With the burden of the day-to-day tasks shifted to Amazon’s shoulders, you’ll be able to focus on more cerebral aspects of your business. You can spend more time brainstorming your next business move, or advertising or promoting your products to the public so that you can continue to benefit from Amazon FBA. 

Your eCommerce Business is Scalable,
Management is Easier

Amazon is scalable, which means that it’s easy to grow your business from the ground up. It’s easy for you to go from selling products out of your garage to being a successful Amazon FBA seller. Thanks to all of the benefits of the Amazon FBA program, such as warehousing and listing control, you can take control of your business and achieve growth at a pace you’re comfortable with.

You Can Estimate Your Sales Before Selling

Amazon’s best-seller ranking data can help you estimate the average sales for a product before you even start selling it. This will allow you to make decisions on whether or not you should carry a certain product. When you have this information handy, you can make better, more informed business decisions. 

For example, a baby toy may sell over 500 units each month versus a dog toy that may sell only 200 units per month. However, that particular baby toy may have more competitors, while the dog toy has very few. In this case, you’d want to try to sell the dog toy over the baby toy.

With the data provided by Amazon, you can predict just how well products will do without having to spend valuable time and money experimenting. This can save you the trouble of trial-and-error and help you plan your business’ direction more effectively. After checking this Amazon FBA Fees guide, you can read our Amazon FBA Course to learn more.

Your Products Have Greater Reach

Amazon gets over 2 billion customers each month. That means your products have the opportunity to get thousands upon thousands of views. The more people you reach, the bigger your chances of making a sale.

Of course, reach isn’t the only important thing to consider in order to become a successful seller. In order to make the most of this increased visibility, it’s important that you create killer product listings that make people want to purchase your products after they’ve found them on Amazon.

You Control Your Listing & Shipping

There are tons of branded product listings that you can share with other sellers. However, when you create your own product listing, you’ll have complete control. This is called private label and is one of the most effective selling techniques on Amazon FBA. The listing should include the product title, description, images, and price. Read more:

Are you ready to start selling products on Amazon? Once you’ve mastered the ins and outs of the Amazon FBA program, Amazon can help you become a successful entrepreneur. To get started, take this 16-hour course to learn how the FBA program works and how to boost your business!

Grow Your Business With Amazon FBA Today

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