In-depth guide on Amazon FBA Fees
If you're thinking about developing your business online, through Amazon's worldwide marketplace, you can become very successful. There are many benefits when you're launching your business through this platform, as it offers complete assistance, providing you with an open worldwide market, customer support, fulfillment plan, and much more. Fulfillment by Amazon is probably one of the best sales models you could use, but understanding its costs is crucial when it comes to profiting on the market. You need to determine all of the expenses related to your sales in order to benefit. If you don't want to end up with small gains of your selling, or even worse, losing money, you should have exact information on how much expenses you will have to pay for every service you get through Amazon Fulfillment model. These expenses are called Amazon FBA Fees.
Fulfillment by Amazon helps entrepreneurs expand their network, and focus on the customers and market, while someone else is handling all of the tasks related to the shipment, preparing and packing products, delivery, and customer support.
Maybe you have a supplier, and you want to ship products directly from them to your buyers? This program will do it for you. If you have goods on stock, you can store them in Amazon's warehouse from where they will be carefully prepared, packed and shipped to your customers. But each of these services holds a variable cost, which you need to determine to understand whether your product is profitable for sale. Calculating these fees isn't so hard as this platform offers a free online tool that will show you exactly how much you will have to pay for each service per item.
Types of FBA Fees
Amazon Referral Fees
The referral fee is Amazon's charge for connecting sellers and buyers. For every sold item through this platform, you'll have to pay around 15% of your sales price. This is the average fee, but the cost varies for each category. For some categories, it goes very low, around 6%, but there are also some where you'll pay up to 45%! Choose your product group wisely, as some of the items have a higher fee cost, but they're easier to sell. Jewelry and clothes categories have pretty low fee rates, but they're not quite so easy to sell, as there are millions of products available.
Variable Closing Fees
This fee goes on top of the referral fee when you're selling media products such as video games, books, CDs, DVDs, etc., and it's around $1.80.
Amazon Fulfillment Fees
One of the fantastic advantages, when you are an FBA seller, is the capability to store your goods in Amazon's warehouses, from where your products will be carefully prepared, packed, and shipped to your customers. Fulfillment Fees are the expenses for all of these services, and even if it seems a bit pricey, in the end, it's much cheaper then to do it by yourself. Every fee differs depending on item size and weight.
For products weighing 10 oz. or lower, the fee is around $2.41, and it goes higher for more massive objects.
Individual Seller Fees
If you're not a verified seller who holds a professional business or store, you will have to pay a $1 flat fee for every sold item.
Professional sellers don't pay a flat individual fee per product, but they have to pay a subscription fee, which is $39.99 per month.
The subscription is a great deal for professional sellers or those who plan to become. If you're selling more than 40 items on a monthly basis, this subscription will definitely pay off!
Fees you pay for storage are based on the product's size and time of the year.
For over-sized items, storage will cost you $0.48 per month, while standard-size items have a fee around $0.69, depending on how many cubic feet of storage they occupy.
Depending on which time of the year you're using Amazon's storage services, fees may vary. From January to September, storage is cheaper than when it's the holiday season. During October to the end of December, these fees are higher than usual.
Other Amazon FBA Fees
There are other potential costs you should keep in mind when you're starting your business on Amazon. There may be additional expenses if Amazon needs to perform more, unexpected services for you.
Stock Removal Fees
You have some products that are in Amazon's warehouse for a while, and you want to get rid of them, or you want them to be sent back to you? No problem! But there is also an additional fee for this service.
Inventory Placement Service
If you don't want your goods to be divided into several fulfillment centers, the FBA Inventory Placement Service will store all of your products at one fulfillment center.
Returns Processing Fees
Amazon will do this for you as well, but processing your returns will cost you. This fee refers to categories such as:
- Shoes, Handbags & Sunglasses
Your business is really growing, and you want to start selling your products worldwide? No problem! Amazon will be there to support you and do it for you for an additional fee.