In 2006, Amazon launched the Fulfillment by Amazon (FBA) service. Today, millions of users in over 100 countries use the FBA service. Amazon FBA enables ecommerce retailers to store their products in Amazon warehouses — regardless of whether they actually sell on Amazon — and lets Amazon handle the packing and shipping of those products.
In addition to offering fast fulfillment, FBA provides customer service for retailers. It also provides certain marketing advantages, such as allowing your products to be eligible for Super Saver Shipping and Amazon Prime, both of which offer free shipping for eligible items. Because of these benefits, FBA has been key in helping small businesses grow their sales.
While it may be tempting to jump in and follow the FBA trend, it’s important to note that FBA involves various costs — some obvious fees and other not-so-obvious ones — that users must carefully weigh before committing to Amazon FBA.
Amazon FBA fees depend on product size and weight
- Fulfillment fees: These fees include packing and shipping costs, as well as Amazon’s customer service.
- Monthly FBA inventory storage fees: These fees cover the cost of storing items in Amazon’s warehouses, which are known as fulfillment centers.
The size, including dimensional weight and shipping weight of your product, determines the fees. Amazon breaks these down into product size tiers. The smallest dimension is considered “small standard-size products,” at a maximum of 16 ounces and side lengths of 15 × 12 × 0.75 inches. The largest dimension is referred to as “special oversize” and includes products that weigh over 150 pounds and are over 108 inches in length.
Whether your product qualifies as a large standard-size or an oversize will affect both its fulfillment fee and its storage fee. As of April 2022, Amazon has applied a 5% fuel and inflation surcharge to all item sizes. For example, a small standard-size product that weighs 6 ounces or less would be charged a fulfillment fee of $2.92 with a surcharge of $0.15.
Amazon FBA fees for standard-sized products apply to both domestic and international orders.
Oversize products, on the other hand, have a different set of tiers to determine their fulfillment fees, as demonstrated below.
Take a look at the examples below to see how the size and weight of different products affect their fulfillment fees.
As you can see, a small, light item like a T-shirt has a fulfillment fee of only a few dollars. However, as a product increases in size and/or weight, the fulfillment fees increase as well.
Whether a product is considered standard size or oversize will also determine its storage fee. As you’ll see in the table below, FBA storage fees are more expensive during holiday months, from October through December.
Storage fees are also higher for certain products, such as those deemed “dangerous goods.” Long-term storage fees are charged in addition to monthly storage fees for products stored at an Amazon fulfillment center for more than a year.
For a more detailed look at Amazon’s product size guidelines, check here.
FBA fulfillment fees are higher for products sold outside Amazon
Amazon will account for nearly 40% percent of the market share in ecommerce. However, you can use FBA for products you sell on your own website or another platform, such as eBay or Walmart. This is called multi-channel fulfillment (MCF), and the fees are a bit higher in these cases.
Individual sellers who use MCF ship their products to an Amazon fulfillment center and are charged storage fees based on product size and storage each month. When a customer places an order for that product — whether directly from your business’ website or from a third-party sales channel — Amazon will receive the order, pack it and ship it directly to the customer.
You may have a variety of shipping options available for the products you sell, so Fulfillment by Amazon offers MCF fees for standard, expedited and priority shipping. In addition to the shipping option selected, MCF fees are also determined by whether your product is standard size or special oversize.
For example, if you sell a small standard-size product, such as a T-shirt that weighs 5 ounces after packaging, and ship it via standard shipping, the MCF fee would be $5.35, as illustrated in the chart below.
For a complete list of multi-channel fulfillment pricing, click here.
Other Amazon FBA fees to consider
There are several additional fees that FBA sellers should keep in mind. While not all of these fees will apply to every seller, it’s important to consider them in your budget.
If you’re selling items on Amazon with an Individual Selling plan, you’ll pay a per-item selling fee of $0.99 on each product sold. If you have a Professional Selling Plan, you’ll pay $39.99 a month and have no per-item fee.
A referral fee is a fee that Amazon charges for every product you sell on Amazon. Amazon takes a percentage of the sale, which is determined by the product category your item falls into. For example, bags have a 15% referral fee with a $0.30 minimum, while Amazon device accessories have a 45% referral fee. Consult this table below for a complete list of categories and their corresponding Amazon referral fees.
Some product categories also have closing fees. These include: “Books, DVD, Music, Software & Computer/Video Games, Video Game Consoles, and Video Game Accessories.”
Removal order fees
These fees are charged per item removed from Amazon warehouses, and they’re determined by the product’s size and weight, as indicated in the chart below.
Here’s a more detailed guide to removal order fees.
Returns processing fees
These fees apply only to customer-returned products sold on Amazon in those categories for which Amazon offers free return shipping. These include apparel, jewelry, shoes, handbags and luggage. Amazon offers free returns on these items to build customer trust and encourage consumers to make purchases.
Unplanned service fees
Amazon requires all merchandise to be labeled and barcoded to certain specifications. If inventory that hasn’t been properly prepared or labeled arrives at an Amazon fulfillment center, Amazon will charge a per-item fee to fix the issue. Here’s a more detailed guide to FBA’s unplanned service fees.
FBA Small and Light can reduce costs
Products in new condition that measure “18 × 14 × 8 inches or less, weigh 3 lb or less, and are priced at $10 or less” are eligible for Small and Light. The Small and Light service reduces the cost of fulfillment. Check out the table below to see which product sizes qualify for the program.
Some types of products, including food, alcohol and certain electronics, aren’t eligible for Small and Light. For a complete list of restricted products, check here.
Want to enroll in FBA Small and Light? Check out the guidelines here.
Free tools to determine your FBA fees
Amazon offers several free tools and an FBA calculator to help you figure out the various fees you could be charged per item when using FBA.
The FBA Revenue Calculator, for example, allows users to input their fulfillment costs, including the item price and shipping fees, to view real-time cost comparisons.
You can also use the fee estimate tool, which provides users with a fee estimate for the items listed in your Amazon inventory. You can access this tool from the Manage Inventory page of your Seller Central account by clicking “fee preview” to view a breakdown of anticipated fees.
Keep in mind that Fee Preview provides only an estimate of fees and doesn’t include all possible costs. To view fulfillment fees for FBA products, you must enter dimensions for your products and have Amazon Standard Identification Number — ASIN codes — for them.
Fulfillment by Amazon fees help you and your customers
As you can see, there are numerous seller fees involved in using Fulfillment by Amazon. While not all Amazon sellers use the service, there are many benefits to FBA, including fast fulfillment, fewer individual business operations, marketing advantages and occasionally lower costs, depending on your product.
When you commit to Amazon FBA, you ensure fast and free shipping, a key feature to attract new customers. Without additional ecommerce business costs for shipping, handling and storing, you can focus on increasing customer satisfaction and thus increasing product rankings. Whether you start collecting more positive reviews or you use the time to develop a new product, the time and money saved are well worth Amazon FBA costs.