Amazon FBA Fees: What Costs are Included and How to Keep Them Low

created on 2020, 02, 27 00:23

fba amazon fees

Any online seller who uses the Fulfillment by Amazon (FBA) order option knows about Amazon FBA Fees . FBA sellers are required to ship their listed items to Amazon's warehouse. From there, the ecommerce company handles the storage, transfer of the items from the warehouse, customer service, shipping and even returns where applicable. 

Amazon charges FBA sellers a fee of up to $1.35 per item for holders of individual accounts and $39.99 each month for professional account holders. If FBA sellers are not careful, fulfillment by amazon fees can reduce their profit margins significantly. But all is not lost - there are several things that sellers can do to keep their fba fees low. 

What Costs are Included in Amazon FBA Fee ?

To sell under the FBA option, sellers have to cater for several costs including: 

  • Sourcing for products
  • Storage fees
  • Third party tools
  • Order fulfillment fees 
  • Shipping products

To ensure that the items being sold return a profit, sellers should conduct thorough research. They should pay close attention to FBA amazon cost because when not taken care of, FBA fees can accumulate and eat into the profit. Several costs constitute FBA amazon fees . These are:

Order Fulfillment Fees

Online sellers who opt for FBA order option have to pay this fee to Amazon. The order fulfillment fee caters for costs related to:

  • Locating products in the Amazon warehouse
  • Packing and shipping items to customers
  • Handling customer service during the sale
  • Managing product returns

Product Prep Service Fee

Under the FBA ordering option, Amazon has strict product prep and packaging guidelines. Sellers can choose to have the eCommerce company package the products and prep them at a fee or they can prep and pack the products themselves. In the event sellers send products that are not prepared properly, Amazon charges them a prep service fee to package and prep them well. Prep service fees vary depending on product type.

Product Storage Fees

This is a fee that FBA sellers pay to Amazon for storage of their products in the fulfillment center. Storage costs vary depending on season and product size. Where products are stored in Amazon's fulfillment center for more than a year, sellers are required to pay a fee for long-term storage. 

amazon fba cost

Product Shipping Fees 

This fee caters for the cost of shipping products to customers. It is important that this fee is different from the cost of sending items to Amazon. Ideally, sellers are required to cater for the cost of shipping their listed items to Amazon's warehouse. 

Inventory Removal Fee

Sellers who want to remove unsold stock from Amazon warehouses are charged a fee. Often, the eCommerce company requires sellers to pay the fee for each unit they wish to retrieve from its warehouse. 

Product Labeling Fee 

Every item sold on Amazon has to be labelled appropriately inline with Amazon's barcode label requirements. Though sellers have the option of labeling the products themselves, those who want Amazon to label their stock have to pay a labeling fee. Sellers who label the products themselves but fail to meet Amazon's specifications are charged a labeling fee to have the labels replaced. 

Returns Processing Fee

Amazon does not charge a fee for returned products in many categories but it does for categories that provide for free returns. For such categories, the eCommerce giant charges a returns fee that is equivalent to the product fulfillment fee. Where returned items need to be repackaged for resale, the eCommerce company charges a fee for repackaging. 

How to Keep FBA Fees Low 

FBA fees can go up and make an online business unprofitable. But there are several things FBA sellers can do to reduce such fees. Some measures to reduce FBA fees include: 

Sending the Right Products to Amazon's Warehouse

There are right items to send to Amazon's warehouse and there are those that are not. This is because FBA fees are compiled based on the specifications of items. For instance, do not send items that are priced below $15 to the fulfillment center. The storage fee is based on size and weight, not price. If the item is heavy, the profit margin will reduce. Also, avoid sending many heavy products to the warehouse as that will mean paying more and reducing your profit margins. 

amazon fba fee

Sell your Products in Bundles

When you combine items into bundles, you avoid paying fulfillment fees for each item because a bundle will be treated as a single item. This will mean packing the products in one bundle - which is cheap as also easy to do. 

Track your Inventory Levels

Using the inventory performance dashboard, keep track of your stock levels. From the dashboard, you will get advice on when your listings have issues that you need to fix, when you need to restock your products and when your inventory levels are too high and you risk incurring long-term storage fees. 

Wrapping Up

FBA fees comprises several costs including storage, shipping, packing, labeling and return processing fees. While there are costs that FBA sellers must pay to Amazon, there are ways to reduce the costs to maximize profits. If you are an Amazon seller, consider using the three strategies discussed above to keep your FBA fees minimal.

2020, my own blog