The Big Amazon FBA Cost Overview: These Amazon FBA Fees Merchants Have To Take Into Account When Using the Popular Fulfillment Service

With its worldwide presence, Amazon offers online retailers of all industries and sizes an excellent platform for selling their own products. Of course, the U.S. company does not maintain its marketplace and services such as Amazon FBA out of pure charity, but charges various types of fees in return. As long as you are aware of the composition of these and pay attention to some essential factors, the bottom line is usually still a clear win-win situation.

In this article we will take a closer look at the costs and fees incurred when using Amazon’s popular fulfillment service FBA (Fulfillment by Amazon). To do this, we will first show a brief overview of the costs that are generally incurred for sales on the online platform. We then take a detailed look at the marketplace-related fees incurred by “fulfillment by amazon” (here we also include an all-encompassing sample calculation), before we take another look at external, product-related factors. Finally, we will give you some valuable tips that can help you to keep your expenses in check.

By the way: If you already have your own online store, this is no obstacle to successfully selling your products via Amazon FBA. On the contrary: in combination with our listing tool magnalister, you have a great opportunity for an easy and smooth start. Via Amazon’s multi-channel shipping (MCV), you can even store and ship all the products that are sold via your online store via Amazon. This means that the proactive and simultaneous development of your own online store can make a significant contribution to minimizing risk. You can also read more about this further down in the article.

More about the core features of the magnalister marketplace interface and the possibility to test the plugin in a 30 day free trial with full functionality can be found here:

CONNECT AMAZON VIA MAGNALISTER

Table of Contents

Even without FBA: Which fees and costs are generally incurred when selling your products via Amazon

Amazon FBA fees decoded: This is how the final costs are composed

Something that should not be forgotten: Marketplace-independent Amazon fulfillment costs

Tips and tricks: How to keep your sales fees in check and reduce your financial risk

Bonus tip: With magnalister, you can link well-known online marketplaces such as Amazon and eBay directly to your own online store – and in addition to increased sales, also ensure more independence

Conclusion: The costs for the Amazon FBA program should not be underestimated – but a large part of the fees can be easily avoided

Even without FBA: Which fees and costs are generally incurred when selling your products via Amazon

First, a brief note: This article is primarily intended to deal with the composition – and thus, to a certain extent, the optimization – of fees when using Amazon FBA. If you need more detailed information on the basic fees and sales commissions covered in this chapter, we highly recommend our separate general article on Amazon sales fees. All information is as of July 2021.

Basic fees for using Amazon: Basic vs. Professional Seller Account

At the very beginning of your career as an Amazon merchant, the question of the appropriate seller model often arises. Amazon offers the two sales tariffs “Individual Seller” (also called Basic Seller Account) and “Professional Seller” (Professional Seller Account), which differ fundamentally in their cost structure. Among other things, we have already gone into this topic in detail in the article linked above. The differences for sellers are as follows:

• Monthly basic fees: 0.00 USD (Basic) vs. 39.99 USD (Professional)
• Flat fee per sold unit: 0.99 USD (Basic) vs. 0.00 USD (Professional)
• Additional features: Sales statistics and performance reports (only Professional)

From a purely mathematical point of view, a Professional Seller Account is worthwhile from as little as 40 sold products per month, because from this sum onwards, the flat fees of the Basic Seller Account would exceed the monthly basic fees of 39.00 USD. In addition to that, quite valuable insights can be gained from the reporting features. In short: For those who only want to try out a little or who expect to sell only a few products in the beginning, a Basic Seller Account can be sufficient for the time being. Ambitious merchants should tend to make use of the Professional tariff right from the start. Incidentally, Amazon FBA can be used with both tariffs while incurring the same Amazon FBA program fees.

By the way: As soon as your own Seller Central account has been opened, you can access the various Amazon APIs (Application Programming Interface) and thus connect the “marketplace business” to your own systems (e.g. ERP system or merchandise management system). It’s even faster with magnalister: Our tool does not only synchronize inventory levels, but also imports corresponding Amazon orders into your own online store. In addition, invoices are uploaded fully automatically from the webshop to Amazon via the API.

Experience all the features of the magnalister interface in detail in a free on-screen tutorial from magnalister.

BOOK A FREE ON-SCREEN TUTORIAL NOW

Percentage sales fees and category-specific differences

A significant contribution to the total cost of selling your own products via Amazon Marketplace are first of all the percentage sales fees. These are the “classic”, proportional fees that Amazon deducts from the sales price regardless of the use of services such as FBA and the like. What many beginners do not know: The commissions differ from category to category, sometimes significantly, and thus also have a decisive influence on the profitability of one’s own business.

Below are some examples of categories with fixed commission amounts. These always refer to the sales price, but remain constant regardless of its amount (all figures as of June 2021):

• Computers; electronics
• Tires: 10%
• 3D Printed Products: 12%
• Tools & Home Improvement; Handmade; Sports; Books: 15%
• Accessories for Amazon devices: 45%

In addition, there are some categories with variable commission amounts, which can change with the total sales price (TSP = product price + shipping costs + any additional costs). Here, a distinction is made between two scenarios: Either from a certain TSP a different commission percentage applies (for example, 10% up to a price of 200.00 USD and 12% for the amount above), or the commission is composed proportionally. Don’t worry – this sounds much more complicated than it really is.

Here is a short calculation example: You sell a product from the category “Jewelry”. On the share of the TSP up to 250.00 USD, a (pro rata) commission of 20% would be due, above that this is reduced to 5%. If you sell your piece of jewelry for a total sales price of 300.00 EUR, your fee to be paid is 52.50 USD calculated as the sum of 50.00 USD (20 % of 250.00 USD) and 2.50 USD (5 % of 50.00 USD).

That’s not so bad, is it? A complete list of all fixed and variable sales fees per category can also be found in the article linked above. Please note that all information refers to the US Amazon marketplace. Since the fees can vary considerably, especially outside the US, you should inform yourself in advance about the costs when using other marketplaces.

Last but not least: Don’t forget possible additional costs!

Last but not least, you should have heard at least once about the additional (special) fees that Amazon also initiates outside of the FBA service in various cases. On the one hand, these come in the form of so-called closing fees, which are charged as a flat rate of 1.80 USD per unit sold in the following categories: Books, DVD, Music, Software & Computer/Video Games, Video Game Consoles, and Video Game Accessories. In addition, there is the “High-volume listing fees“, which, however, should be irrelevant for you at first: From a total number of over 1.5 million active SKUs (“Stock Keeping Unit”, article number) per marketplace, 0.001 USD per each additional unit will be due. So if you want to offer a million more products of the same type, you will pay an additional 1000.00 USD (1,000,000 x 0.001 USD). And then there are the processing fees for refunds, which come into play if the customer cancels an order. They are generally 20% of the percentage sales fee, but never more than 5.00 USD. For example, if you sold a product for 30.00 USD with a commission of 12%, the processing fee would be 0.72 USD (20% x (12% x 30.00 USD).

Amazon FBA fees decoded: This is how the final costs are composed

If you are a retailer and decide to use Amazon FBA, the online giant takes over almost the entire goods handling for you. In addition to storing the products in their worldwide logistics centers, Amazon is also responsible for shipping and returning the products. Furthermore, and this is particularly crucial for international sales, the online marketplace takes care of international customer service. The fees incurred when using Amazon FBA are consequently made up of the two main components of warehouse (respectively Amazon FBA storage) fees and shipping costs (respectively Amazon FBA shipping fees). Furthermore, additional fees may be incurred for the use of other services, as we will show in the following section.

Amazon FBA storage fees are mainly determined by parcel size and average storage time in Amazon’s logistics centers

Amazon FBA storage fees are variable and depend on the average daily storage volume (in cubic foot) per month that your products take up in the logistics center and are settled for a given month in the second week of the following month. For non-dangerous goods (new regulations apply since 8 June 2021), the following FBA fees are due per cubic foot and month on Amazon FBA (USA):

Non-dangerous goods products

* View the Product size tiers to determine if your product is oversize

As can be seen in the table, there is no distinction between product categories (clothing, footwear and bags/all other categories) like it is the case for the German marketplace, for example. The only determining factor is the size class of the packaging (Standard vs. Oversize).

On the other hand, for products classified as dangerous goods, the fees below apply, which are intended to absorb the additional costs of storing such goods and which solely depend on packaging size and season. For more information on the classification of dangerous goods, click here.

Dangerous goods products

Again, the old saying applies: The exception proves the rule. Specifically, we are referring to goods that are in one of Amazon’s logistics centers for longer than 365 days. This could be the case, for example, if you sell particularly expensive or exclusive products via FBA that only have low sales volumes. In addition to the fees listed thus far, so-called long-term storage fees will then apply. These basically amount to monthly $6.90 per cubic foot or $0.15 per unit, whichever is greater.

Letter or heavy oversize parcel? The composition of Amazon FBA shipping fees

We continue with the second major cost block, the shipping costs. When using FBA as compared to handling shipments on your own, the possibility of influencing the shipping conditions yourself is of course eliminated. In return, Amazon does not only take care of shipping per se, but also guarantees extremely fast delivery times (usually one to two business days) as part of their Amazon Prime program. This is made possible not least by the fact that the company maintains numerous logistics warehouses in many countries around the world, so that the products can often be stored directly on site, even when using international marketplaces. The direct consequence for you: higher sales and, as a rule, satisfied customers (at least in terms of delivery times).

But what do the final shipping costs actually depend on? Just like one would assume, the costs are primarily determined by the weight and dimensions of the respective products or packages ready for shipment. In addition, it is of course decisive where your items are shipped to. Here, a distinction must be made between different shipping networks that Amazon offers for cross-border trade. Under the European Fullfilment Network (EFN), for example, your Amazon FBA products are shipped domestically and internationally from one local warehouse, while the so-called “Pan European FBA” provides for storage directly on site (you can get more information and a direct comparison between the two options here or in our separate article on international sales with Amazon).

Fees incurred under the traditional, local Amazon FBA program range from 2.70 USD for a “small product” (6 oz or less) to 76.57 USD + 0.79 USD/lb above first 90 lbs for a “large oversize” parcel (150 lb or less) and can be compared in the official shipping overview. Surcharges apply if you want to make use of Amazon’s multi-channel shipping, which we refer to separately below. Please do not forget: Many articles and posts on the web still refer to the old shipping charges, which were valid until 07 June 2021. A direct comparison of all prices before and after the changeover can be found on this page.

Practical tip: In order to better estimate the approximate costs for various products or product types, Amazon offers a particularly helpful tool to determine FBA fees in the form of the Amazon revenue calculator (formerly shipping calculator). Based on your information about the weight and size of your parcel as well as the preferred shipping option, this spits out an estimate of the costs incurred and shows you remaining margin.

Further costs may arise from the use of various additional Amazon fulfillment services

While storage and shipping of products are inherent, some services may (or must) be additionally utilized as part of Amazon FBA. These include such things as the following:

• Labeling service: labeling products with a barcode is important to ensure proper tracking of inventory. Most retailers provide their products with an individual barcode such as the EAN number (European Article Number) from the outset and in consultation with the manufacturer. If this is not possible for you, you can use the in-house labeling service for a fee of 0.30 USD per item labeled.
• Preparation service: Amazon FBA has certain guidelines regarding packaging and preparation of items. These are not particularly restrictive and can usually be met easily in consultation with your own manufacturer, so that your products arrive at Amazon and are ultimately ready for shipment. Of course, you can also ensure proper packaging yourself and have the products delivered to Amazon’s warehouse on your own. For all other cases, Amazon offers a relatively inexpensive alternative with its preparation service (click here for an overview). For example, 0.50 USD per item is charged for preparing a package in the apparel category.
• Repackaging Service: As the name suggests, the online giant also offers product repackaging. This becomes relevant, for example, when products are returned by customers as part of their right to return, but are no longer in a condition for direct resale due to shipping and/or usage. The items are then refurbished and, if necessary, repackaged before being re-sold. More info can be found here.
• Disposal or Removal: If you do not take advantage of the repackaging service, the returned products will go into “unsold inventory” and will subsequently have to be removed or disposed of for a fee. Of course, for your unsold inventory the option of return to the seller is also available at any time. Costs vary depending on package size and weight as well as shipping method and can be viewed here.
• Manual processing of parcels: As an FBA merchant, you only have to pay these fees if you or your manufacturer sends packages to Amazon completely unlabeled. In that case the necessary information is missing to automatically assign the contents to your seller account.

The solved puzzle: A sample invoice for sale and shipping with Amazon FBA

Now that we’ve talked about the different categories of Amazon FBA fees and their pricing in detail, it’s time for a practical example. As you will see, the calculation is not witchcraft at all. This is mainly due to the fact that many of the additional services are normally not (or do not have to be) used.

Note: We refer to this official and (as of July 2021) current document from Amazon. Feel free to take it to hand to be able to track the invoices right away. Storage fees are listed for a single package and per month.

Case study 1: You purchase sports equipment from a manufacturer who ships the products to Amazon ready and properly packaged and labeled. The package is a standard size parcel measuring 1.3 x 1 x 0.8 ft and weighing 3.5 lb. Initially, you only want to ship your items throughout the US and sell them via Amazon’s own marketplace. The following fulfillment costs are regularly charged by Amazon as part of the FBA service:

• Storage fee: 0.78 USD in the low season, 2.50 USD in the high season. Calculation: 1.3 x 1 x 0.8 ft = 1.04 ft³, times 0.75 USD (low season) or 2.40 USD (high season) per cubic foot per month.
• Shipping fee: 5,83 USD per item

In addition, under certain circumstances and at irregular intervals, (processing) fees for returns, return orders and the reprocessing service will be charged.

Case study 2: You purchase a second product from the “DIY” category from another manufacturer. The latter sends the package in “standard oversize” (70 lb or less) directly to the warehouse you have specified, but it still has to be labeled and packed with bubble wrap there. The package weighs 18.1 lb and you intend to sell the products to the US marketplace via your own online store simultaneously (multi-channel fulfillment program). The following fees are regularly charged by Amazon as part of the FBA service:

• Storage fee: 5.23 USD in the low season, 13.07 USD in the high season. Calculation: 3.3 x 2 x 1.65 ft = 10.89 ft³, times 0.48 USD (low season) or 1.20 EUR (high season) per cubic foot per month
• Shipping fee: 15,16 USD per item sold on Amazon (via own online store)
• Labeling service: 0.30 USD per item/parcel
• Preparation service (packing): 0,50 USD per item/parcel

Please note that different fees may apply for global sales and shipping. For more information on this, it’s also worth taking a look at our article about international sales with Amazon, where we discuss everything you need to know for successful expansion. Something that should not be forgotten: Marketplace-independent FBA fees when trading with Amazon, which we will briefly discuss in the following chapter.

Something that should not be forgotten: Marketplace-independent Amazon fulfillment costs

As already mentioned, this article is mainly looking at the pricing and the fees that are charged within Amazon’s FBA program. Nevertheless, in the following section we would like to refer once again to those cost blocks that are incurred on the product side. After all, these put pressure on the margin in addition to the total fees. Conversely, savings at this point can create space for other, possibly unavoidable fees. Among others, you should consider the following cost positions in your calculations:

• Product costs: Something that sounds obvious at first glance requires careful consideration. After all, as the seller, you have to decide where to have your products manufactured. If product quality is particularly important to you, regional production (which is generally more expensive) may be feasible. A supposedly cheaper production can often be achieved in Asian countries, typically China. But cheap is not always cheap, as the next cost position shows.
• Shipping costs and customs duties: The costs for shipping and customs duties should not be underestimated – especially when producing in Asia. This is because, depending on the production costs and the sales price, the savings as compared to local production can quickly be used up again. Inventory management is of particular importance here, and we will discuss this issue in more detail below: Can I afford the cheaper but at the same time significantly slower freight by ship, or do I have to rely on the much more flexible air freight?
• Marketing and packaging: A good product presentation always requires high-quality materials. From professional product images to graphic elements such as brand logos to product packaging, there is a lot to consider. Although not all costs incurred here can be directly offset against the sales price – after all, unit costs decrease with each additional item produced – they should not be forgotten either.
• Advertising (PPC campaigns): A cost position that is often forgotten, especially by FBA beginners, are the fees for Amazon’s own advertising campaigns (so-called PPC or pay-per-click campaigns). Although PPC is not necessarily a must, it can easily become a “start-up aid” and is often worth its weight in gold, especially in competitive markets. More information about Amazon PPC can be found here.

Tips and tricks: How to keep your sales fees in check and reduce your financial risk

With or without FBA – you unfortunately cannot avoid all cost to start selling via Amazon. However, there are numerous ways to keep the additional costs that are incurred by the fulfillment service as low as possible. We will take a look at some of them in this chapter.

As a beginner, you should first focus on “classic” FBA products

You may have already taken a look at our article “Worthwhile products when selling on Amazon“. If not, you should do so in any case, as we go through the entire process of product discovery from start to finish and give numerous helpful tips! An essential aspect that we take a deeper look at is the “suitable” product properties with regard to a sale via Amazon FBA. Purely theoretically, of course, the vast majority of items can be sold via the fulfillment service. However, especially as an inexperienced newcomer, it often makes little sense to try your hand at particularly demanding products. These include, for example, very expensive goods (high cost risk, low quantities, difficult to plan), heavy and large items (very high fees, increased demands on inventory management, see below) or products from unfavorable categories that come with high fees or special requirements (certifications, specialist expertise). Basically, make your life as easy as possible at the beginning and keep the risk low.

Well thought-out inventory management saves costs and at the same time increases customer satisfaction

Inventory management – a factor that many beginners probably associate more with sales managers in large supermarket stores than with the everyday life of an FBA merchant. It is already clear from the points discussed so far that inventory management can be a real balancing act, and not just for inexperienced merchants. Permanently high stock levels in connection with Amazon FBA lead to significantly higher costs and fees and can complicate competitive pricing, especially if the items have comparatively large dimensions. We remember: The more volume the parcels take up in Amazon’s warehouses per month, the bigger the respective bill.

On the other hand, if you underestimate your own sales, the stored products are often used up faster than you can reorder them. Even if you then accept the significantly more expensive air freight, you can easily end up with idle times of up to several weeks – in the jargon, you are then “out of stock”. This in turn not only has direct negative consequences for your sales, but also has a detrimental effect on your retailer and product rating, so that you may lose visibility in search results (read more here). It is especially tricky if your products are sold through different sales channels, as this can quickly lead to inconsistencies in the actual inventory. At this point, our listing tool magnalister can provide a decisive advantage, which we present in more detail below. As a webshop plugin, it allows for easy and completely centralized management of your own products and inventory – (almost) regardless of which of the common channels your items are sold on.

TRY NOW FOR FREE

Small and Light, Subscribe & Save, MCF: Amazon offers a range of special programs

We admit: With all the programs and services Amazon offers alongside and around FBA, it’s easy to get lost in the shuffle, and not just in terms of costs, fees and pricing. Don’t let this discourage you at all, as some of these services can deliver great value in certain circumstances. We also provide helpful overviews and comparisons of all of our Amazon articles to make it as easy as possible for you to get started. Within this article, we would like to point out the three special programs “Small and Light”, “Subscribe & Save” and “Multi-channel fulfillment”, as they can play a significant part in optimizing costs and efficiency.

If you want to sell particularly small, light and inexpensive products, you can save considerably on shipping costs with the Small and Light program. Qualifying products are generally shipped at lower rates, allowing you to improve your own margins and/or offer lower prices to your customers. In addition to free shipping for Prime members, “traditional” customers also receive free standard shipping on their products with an order value over 25.00 USD. Your products must meet the following requirements to be eligible:

• Weight ≤ 12 oz
• Dimensions 18 x 14 x 8 inches or less
• Price ≤ 7.00 USD (incl. VAT)
• ASINs with fast turnover of goods (Amazon Standard Identification Number)
• At least 25 sales per product within the past four weeks

You can get to the official registration guide for the program, which is also suitable in connection with Pan European fulfillment, by clicking here.

Subscribe & Save, on the other hand, is exactly what customers expect it to be: Subscription-based, regular deliveries of certain products at reduced prices. In addition, your customers also benefit from free shipping through Amazon. And you as a retailer? Gain loyal and returning customers whose purchases and sales you can rely on. So if you sell products that you think are regularly needed by the same customers (for example, vacuum cleaner bags, toothpaste, coffee beans, or printer cartridges), you can get more information about requirements and registration here. To return to the topic of inventory management: Among other things, an inventory rate of 85% on 26 of the last 30 days is required to qualify for Subscribe & Save.

The final feature we want to discuss is Amazon’s multi-channel fulfillment, which we have already mentioned several times over the course of this article. In a nutshell, Amazon offers you the option of handling goods even for products that you sell via your own online store. The costs for shipping thus increase compared to the conventional Amazon FBA fees to a certain extent, as can be seen from the official fee overview. For example, 2.84 USD for a small standard package 6+ to 12 oz becomes 5.95 USD (for a 1 unit order) but decreases with increasing units per order. Why running a standalone online store simultaneously is still an excellent idea and what role our listing tool magnalister plays in this, you will learn in the following section.

Bonus tip: With magnalister, you can link well-known online marketplaces such as Amazon and eBay directly to your own online store – and in addition to increased sales, also ensure more independence

The simultaneous development of an independent online store via well-known systems such as Shopware, WooCommerce or Shopify comes with several major advantages. In addition to higher margins on your product sales, you primarily reduce your dependence on Amazon, which results from being tied to the company’s own marketplace. In addition, you proactively prevent the market entry of financially strong and competent competitors, first and foremost Amazon itself. In short, you combine the best of both worlds while reducing your risk.

This is exactly where our listing tool magnalister comes into play, which can secure decisive competitive advantages for you as a retailer. Regardless of whether you already run your own online store or are planning to do so in the future: as a webshop plugin, it offers everything you need for effective management between online store and marketplace – making it much easier for you to get started and for ongoing product and order management. Once you have set up your online store and configured magnalister, you can connect numerous other marketplaces besides Amazon in no time at all, thereby exploiting the full potential of your products. And the sometimes time-consuming fulfillment? – can still be outsourced to the company that does it best, after all, as part of Amazon FBA and its MCF program.

With magnalister you benefit from the following features for efficient multi-channel distribution:

• Central product upload: Time-saving and efficient upload of products to all connected marketplaces
• Price synchronization: Prices are matched fully automatically or individually (per marketplace)
• Inventory synchronization: Current stock levels are synchronized and thus unwanted cancellations are avoided
• Automatic order import: Import and manage marketplace orders
• Attribute matching: Match product variations and features with marketplace attributes**
• Order status matching: Automatically match order status (e.g. “shipped” or “cancelled”) with marketplaces
• Invoice upload: Send invoices automatically from the webshop
• Interface customization: Customize the plugin via so-called hook points as you desire***

** Not supported by all marketplaces

*** Requires programming knowledge. Not available for cloud (SaaS) systems, as no intervention is allowed by the manufacturer.

The magnalister plugin is available for many of the well-known webshops and can be tested in a 30 day free trial with full functionality.

START NOW

Conclusion: The costs for the Amazon FBA program should not be underestimated – but a large part of the fees can be easily avoided

Over the course of this article, we have dealt with a whole range of potential costs and fees that (future) Amazon FBA sellers can or may face. The emphasis here, however, is on the little word can. Because a large part of the listed fees can be skilfully circumnavigated through a little bit of advance planning and a considered approach. What then remains in the best case are the storage and shipping costs – and these can typically be calculated quite well.

A considerable part of this advance planning consists of the sourcing process itself: The selection of a suitable product category with its specific characteristics, the product and its dimensions, and last but not least, the manufacturer from which one ultimately obtains one’s items. If all these factors are coordinated, there is no need to even bother with additional charges such as packaging or labeling services. We have also looked at how this can be done in this article. For more valuable hints and tips, you should also take a look at the articles we linked to, which we list again below:

• Amazon sales fees: General info on costs and fees on Amazon
• How-to guide for Amazon product research: How to find suitable products
• International sales with Amazon: Step-by-step guide to international expansion
• Strategies for entry and long-term success: Product placement and other sales strategies

In order to exhaust additional potential and to reduce your dependence on Amazon in the long run, the simultaneous maintenance of an independent online store can be meaningful. In this context, we would like to refer once again to our plugin magnalister: As an interface between your online store and many well-known marketplaces including Amazon, our tool effectively supports you in the area of product listing and order management, so that you can fully concentrate on selling your products and the expansion of your ecommerce business.

TEST magnalister IN A 30 DAY FREE TRIAL NOW