If you’re an Amazon seller, taking advantage of Amazon FBA can be advantageous for your business. It takes away a lot of the work (and costs) involved with storage, packing and shipment. However, you do have to pay extra fees as part of the service.
Not sure whether Amazon FBA is worth the money? In this blog post, you’ll learn about Amazon FBA fees and all the costs associated with being an Amazon seller. As a result, you’ll be able to decide whether or not FBA is something you want to explore.
Fees for All Amazon Sellers
No matter whether you use FBA or not, all Amazon sellers have to pay three kinds of fees:
- Referral and
It’s important to understand these three different areas before you start selling on Amazon to ensure you’ll still have a good enough profit margin.
1. Subscription Fees
There are two types of subscriptions available for Amazon sellers, depending on your business’s needs:
With the individual plan, you pay the fee on a per-item basis. This means that you’ll only pay fees if your products sell. This is great for businesses that don’t know how much product they’re likely to sell yet or those that only sell a few products per month.
This is $0.99 per item sold (plus an additional selling fee) at the time of writing.
The professional plan is ideal if you sell on a larger scale. Instead of paying a fee per item sold, you’ll pay an upfront monthly fee, which is more cost-effective in the long-term.
However, only opt for this plan if you’re confident that you can make a good number of sales every month. Otherwise, you may be paying more than you’re making.
The professional plan costs $39.99 per month (plus additional selling fees) at the time of writing.
2. Referral Costs
In return for having your product listed on Amazon – one of the largest e-commerce sites in the world – you have to pay a referral fee.
Say you’re selling a house and use a letting agent to help get the word out about your home. You’d expect to pay the agent to connect you with more potential buyers. In the same way, Amazon expects you to pay a fee for listing your product on their website.
This is calculated as a percentage and varies depending on different categories. There are also minimum fees attached, too. You can find the fees for each category on Amazon’s website.
One of the benefits of FBA is that Amazon will take care of refunds and returns for you. In return for this service, there is a fee involved.
You’ll get the referral fee back minus the refund administration fee, which is 20 per cent of the referral fee.
Fees for Amazon FBA Sellers
The costs above apply to anyone that sells on Amazon. The following fees apply to FBA sellers exclusively:
FBA takes away a lot of the workload involved in storage, packing and shipping your goods. And, of course, this comes at a price. You’ll have to pay fulfilment costs, but no subscriptions, contracts, or minimum requirements are involved.
With Amazon FBA, you pay a flat fee per unit, depending on the product type, weight, and dimensions.
Generally speaking, there are two different sizes: standard and oversize. However, there are many sub-categories within this.
With Amazon FBA, you get the advantage of being able to store your items in Amazon Fulfilment Centres.
Unlike the fulfilment fee, the storage fee for Amazon FBA is charged monthly. It’s calculated based on your inventory’s average volume, measured in cubic feet. Specifically, it’s based on the volume once the items are packaged and ready to be shipped.
This means that smaller items are often cheaper to store. Make sure to factor this in when weighing up your options.
Other Fees for Amazon Sellers
In addition to general Amazon seller and FBA fees, there are also some other costs to consider before taking out FBA services. These include:
If you have goods stored in an Amazon fulfilment centre for more than 365 days, you may incur long-term storage fees. That’s why it’s important to attempt to accurately predict how much you’ll sell in a given year so you’re not leftover with surplus stock.
Removal Order Fees
Sometimes, you may be leftover with inventory you no longer want. If you’d like Amazon to dispose of this, removal order fees will apply.
Amazon has strict rules regarding how Amazon parcels are labelled and packaged. If your inventory not having met these criteria, it may have to be repackaged by Amazon workers, resulting in an unplanned service charge.
Frequently Asked Questions
Are Amazon FBA Fees Worth it?
This depends on several factors:
- How much product do you sell every month/year?
- Is there a good enough profit margin on your products when you deduct all the associated fees?
- Are you at risk of incurring extra fees, such as long-term storage?
In short, there is no blanket answer: it’s a case of looking at the fees above, doing some calculations, and then weighing up your options.
How do I Calculate Amazon FBA Seller Fees?
You can find online calculators that will work out your fees for you. For example, Amazon has a calculator, where you can input your account type, product category, number of items and price per item. Then, it will tell you the amount that would be credited to your account.
Zee FBA Services
With Zee, we can take care of all the above for you. We act as your Importer of Record (IOR) and handle everything, so you don’t have to worry about logistical hiccups. Expand your business without falling into the traps that slow your competitors down.