How Much Does it Cost to Run an FBA Business on Amazon?

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FBA sellers must consider the fees they pay for the service, like all the other costs of running an e-commerce business.  Knowing what to expect from Amazon FBA fees minimizes the chance of a nasty surprise at the end of the month and gives you the best opportunity to succeed whether you’re a new seller or a seasoned e-commerce brand owner.

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    One of the perks of selling on Amazon is that you can outsource customer service, shipping, and inventory storage to the platform. Of course, all of these services do not come for free. Depending on how much inventory you move, Amazon FBA fees can take a large bite out of your profits if you are unprepared for them.   We’ll go over the fees you can expect to pay when you choose to go the Amazon FBA route so that when the end of the month comes, you won’t be pulling your hair out by the roots when you get that bill.

    Amazon FBA Fees Explained

    There are several types of charges sellers must pay to Amazon to use its platform: general fees, sales fees, and fulfillment fees. We’ll discuss general fees and sales fees in this section and tackle fulfillment fees later on.

    General Fees

    You have two options for handling general fees. You can either pay a per-item fee ($0.99) when you opt for the individual plan or a set monthly fee ($39.99) if you upgrade to the professional plan.  Since you don’t pay the fee until you sell something, the individual plan is best for beginners who are selling a limited number of items. On the other hand, the professional plan is preferred for those who move a lot of merchandise every month or who want to take advantage of the full suite of Amazon’s services, including order management tools and the option to choose your shipping rates. Professional sellers are also eligible to win the Buy Box.

    Sales Fees

    The most common sales fees you will encounter on Amazon are referral fees; however, you may face additional costs in some cases.  Let’s start with referral fees:
    • Because Amazon is at its core a recommendation service, it charges you a referral fee at the time of sale for every transaction it facilitates for you.  
    • All goods sold on Amazon are subject to referral fees.
    • Referral fees vary greatly depending on your items. Therefore it’s always a good idea to consult the table the company provides.
    • For the most common products, referral fees typically range from 6% to 20%.
    • The average seller will pay roughly 15% for the majority of their sales.
    Did you know? The average seller pays about 15% in fees for most of their sales.

    Additional Sales Fees

    Miscellaneous fees may apply depending on what you sell, how much you sell and whether or not the customer receives a refund. Here are a few examples:
    • Rental book fees: A $5 service fee will be charged for each textbook rental you sell.
    • Closing fees: Amazon applies a $1.80 closing charge to the sale if you sell media in any format. 
    • High-volume fee: Amazon charges a listing fee for firms with a large number of SKUs. The charge is $0.001 per qualified SKU; however, for the first 1.5 million SKUs, Amazon waives the fee.
    • Refund administration: For a refund, Amazon will charge you $5.00 or 20% of the applicable referral fee, whichever is less. If you’ve already received payment for the sale, you won’t be charged this fee.

    What Is the Cost of Amazon FBA in 2021?

    cost

    “Inside every FBA business there are anumber of fees to take into account when starting” – (Source: Canva)

    Amazon made changes to its fee schedule for the fulfillment part of its services in June of 2021. Three factors determine these prices:
    1. The product’s weight.
    2. The product’s dimensions or size.
    3. Channels used to sell the products, such as Amazon or an external website.
    Amazon has divided its product sizes into two categories for the sake of simplicity:
    • Standard Size – To be classified as a standard-size item, a product must weigh less than 20 pounds when fully packed. In addition, its size must not exceed 8 inches by 18 inches by 14 inches.
    • Oversized – Anything that is larger than these dimensions and weighs more than 20 pounds qualifies as oversized. 
    Within these sizes, there are subdivisions. The respective cost breakdown for products sold on Amazon, non-Amazon products, and monthly storage fees find mention below.

    Amazon FBA Fees for Products Sold on Amazon

    The fulfillment by Amazon service includes everything from picking, packing, and shipping the goods to your customers to assisting them with shipping, payments, returns and other issues. As previously stated, these prices are determined by the size and weight of your products.

    Amazon fulfillment Fees Per Unit (June 1, 2021, & After)

    Standard-Sized Products

    Product Size Product Price
    Small (6 oz or less) $2.70
    Small (6 oz to 12 oz) $2.84
    Large (6 oz or less) $3.47
    Large (6+ to 12 oz) $3.64
    Large (12+ to 16 oz) $4.25
    Large (1+ to 1.75 lb) $4.95
    Large (1.75+ to 2 lb) $4.95
    Large (2+ to 2.75 lb) $5.68
    Large (2.75+ to 3 lb) $5.68
    Large (3+ to 4 lb) $5.98
    Large (4+ to 5 lb) $6.28
    Large (5+ to 6 lb) $6.58
    Large (6+ to 7 lb) $6.88
    For large standard size: 3+ pounds to 20 pounds $6.08  plus $0.30 per pound above first 3 pounds

    Oversized Products

    Product Size Product Price
    Small oversize (70 lb or less) $8.66 + $0.38/lb above first lb
    Medium oversize (150 lb or less) $11.37 + $0.39/lb above first lb
    Large oversize (150 lb or less) $76.57 + $0.79/lb above first 90 lbs
    Special oversize (Over 150 lb) $138.11 + $0.79/lb above first 90 lbs
    If you’re selling clothing, there are additional fees you’ll need to consider.

    FBA Fee Changes for Clothes

    Size tier Shipping weight (packaging weight no longer applies) fulfillment fee per unit1
    Small standard 6 oz or less 6+ to 12 oz 12+ to 16 oz2 $3.00 $3.14 $3.62
    Large standard 6 oz or less 6+ to 12 oz 12+ to 16 oz2 1+ to 2 lb 2+ to 3 lb 3+ lb to 20 lb $3.87 $4.04 $4.65 $5.35 $6.08 $6.08+$0.30/lb above first 3 lbs
    Oversize apparel tiers (small oversize, large oversize, and special oversize) are charged as per core fulfillment fees.

    Amazon FBA Fees for Non-Amazon Products

    You can also use Amazon FBA to sell things outside of its platform. For example, if you have a dedicated website for your product, you can have Amazon fulfill your orders through MCF (Multi-Channel fulfillment) instead of doing it yourself. It’s worth mentioning that MCF is a little more expensive than on-site fulfillment. Amazon knows that the products on your site may have several shipping alternatives. It has constructed its MCF fees to accommodate a variety of shipping alternatives, including: 
    • Standard (3-5 days)
    • Expedited (2-day)
    • Priority (Next-day shipping). 
    The costs for two product size categories – Standard and Oversize – are listed in the tables below.
    Did you know? You can use Amazon FBA for items you sell outside of Amazon.

    Standard Shipping

    Size tier 1 unit order 2 unit order 3 unit order 4 unit order 5+ unit order
    Small standard: 4 oz or less $3.95 $2.75 $2.39 $1.89 $1.79
    Small standard: 4 to 10 oz $4.95 $3.45 $2.95 $2.29 $1.99
    Small standard: 10 to 16 oz $5.79 $4.05 $3.45 $2.89 $2.59
    Large standard: 10 oz or less $5.49 $3.85 $3.29 $2.69 $2.39
    Large standard: 10 to 16 oz $5.79 $3.90 $3.40 $2.89 $2.59
    Large standard: 1 to 2 lb $5.95 $3.95 $3.45 $3.35 $2.95
    Large standard: 2 to 21 lb $5.95 + $0.38/lb above first 2 lb $3.95 + $0.38/lb above first 2 lb $3.45 + $0.38/lb above first 2 lb $3.35 + $0.38/lb above first 2 lb $2.95 + $0.38/lb above first 2 lb
    Small oversize $10.99 + $0.38/lb above first 2 lb $6.80 + $0.38/lb above first 2 lb $5.80 + $0.38/lb above first 2 lb $4.80 + $0.38/lb above first 2 lb $3.80 + $0.38/lb above first 2 lb
    Size Tier Unit Orders
    Medium oversize $15.30 + $0.39/lb above first 2 lb
    Large oversize $78.30 + $0.80/lb above first 90 lb
    Special oversize $143.30 + $0.92/lb above first 90 lb

    Expedited Shipping

    Size tier 1 unit order 2 unit order 3 unit order 4 unit order 5+ unit order
    Small standard: 10 oz or less $5.69 $3.99 $3.29 $2.89 $2.49
    Small standard: 10 to 16 oz $5.89 $4.19 $3.49 $3.09 $2.69
    Large standard: 10 oz or less $5.79 $4.09 $3.39 $2.99 $2.59
    Large standard: 10 to 16 oz $6.29 $4.59 $3.89 $3.49 $3.09
    Large standard: 1 to 2 lb $6.99 $4.99 $4.19 $3.69 $3.29
    Large standard: 2 to 21 lb $6.99 + $0.38/lb above first 2 lb $4.99 + $0.38/lb above first 2 lb $4.19 + $0.38/lb above first 2 lb $3.69 + $0.38/lb above first 2 lb $3.29 + $0.38/lb above first 2 lb
    Small oversize $11.99 + $0.38/lb above first 2 lb $7.80 + $0.38/lb above first 2 lb $7.30 + $0.38/lb above first 2 lb $7.15 + $0.38/lb above first 2 lb $6.85 + $0.38/lb above first 2 lb
    Size Tier Unit Orders
    Medium oversize $15.30 + $0.39/lb above first 2 lb
    Large oversize $78.30 + $0.80/lb above first 90 lb
    Special oversize $143.30 + $0.92/lb above first 90 lb

    Priority Shipping

    Size tier 1 unit order 2 unit order 3 unit order 4 unit order 5+ unit order
    Small standard: 16 oz or less $12.80 $7.30 $6.30 $5.80 $4.30
    Large standard: 16 oz or less $13.80 $7.80 $6.80 $5.90 $4.80
    Large standard: 1 to 2 lb $13.85 $7.85 $6.85 $5.95 $4.85
    Large standard: 2 to 21 lb $13.85+$0.39/lb above first 2 lb $7.85+$0.39/lb above first 2 lb $6.85+$0.39/lb above first 2 lb $5.95+$0.39/lb above first 2 lb $4.85+$0.39/lb above first 2 lb
    Small oversize $20.80+$0.39/lb above first 2 lb $11.30+$0.39/lb above first 2 lb $8.20+$0.39/lb above first 2 lb $7.70+$0.39/lb above first 2 lb $7.30+$0.39/lb above first 2 lb
    Size tier Unit Order
    Medium oversize $31.30 + $0.39/lb above first 2 lb
    Large oversize $78.30 + $0.80/lb above first 90 lb
    Special oversize $143.30 + $0.92/lb above first 90 lb
    There will be an extra $0.11 per-unit fulfillment fee for lithium batteries or items containing them. Based on the above costs, it’s clear that the more things you sell on your website, the less expensive off-site FBA will be. 

    Amazon FBA Monthly Storage Fee

    amazon monthly storage fees

    “Dependiing on the product amazon FBA storage fees may vary” – (Source: Canva)

    Amazon charges monthly inventory fees between the 7th and 15th of the month for the previous month. Furthermore, the charge varies depending on the product size tier and the time of year. The cost is calculated per cubic foot. As a result, storage rates for standard-size objects may be less than those for oversize products.
    Storage Month Standard-Size Oversize
    January – September $0.75 per cubic foot $0.48 per cubic foot
    October – December $2.40 per cubic foot $1.20 per cubic foot
    Monthly Storage Fees for Dangerous Goods Dangerous goods (also called hazmat) are regulated substances or materials that may pose a risk during storing, handling, or transporting because they contain flammable, pressurized, corrosive, or otherwise harmful substances. “Dangerous goods” also refers to consumer products such as laptops, smartphones, household cleaners, spray paints, and cosmetics.
    Month Standard-size Oversize
    January – September $0.99 per cubic foot $0.78 per cubic foot
    October – December $3.63 per cubic foot $2.43 per cubic foot

    Amazon FBA Long Term Storage Fees

    Amazon imposes a monthly long-term storage fee (LTSF) of $6.90 per cubic foot or $0.15 per item if the inventory is at the fulfillment center for more than 365 days. On the 15th of each month, Amazon calculates long-term storage fees.

    Conclusion

    Fulfillment by Amazon is a fantastic program that can help you significantly increase your sales and market share. Prices are highly competitive, and they often become less expensive than using a third-party logistics partner. Amazon FBA is a solid option whether you’re selling your products on Amazon or through another channel. However, to guarantee your profits, you should double-check and re-check your figures. Additionally, you can contact Amazon’s customer service representatives for assistance.

    FAQ

    A significant edge over your competitors – When you sell your products through Amazon FBA, they automatically become eligible for Amazon Prime Free Two-Day Shipping, Free Shipping, among other benefits.

    Better ranking in the search results – When it comes to Amazon’s search algorithm, FBA products get preference over Non-FBA products. This translates into better rankings in Amazon’s search results for products fulfilled via FBA, and correspondingly, more sales.

    Amazon not only stores your products in their highly secure fulfillment centers, but they also pack, ship, and provide customer service for these goods.

    As mentioned earlier, Amazon FBA pricing is based on how much your product weighs and its size.

    This depends on the space occupied by the products and is calculated per cubic foot.

    Fulfillment by Amazon covers pretty much everything, ranging from picking, packing, and shipping the goods to your customers to helping your clients deal with questions about shipping, payments, returns, etc. 

    Norm farrar

    Entrepreneur and businessman Norman “The Beard Guy” Farrar stands at the forefront of the economic mega-machine known as Amazon Marketplace. As a leading expert with over 25 years of product sourcing, development, and branding expertise, Norm is an advisor to many and an inspiration to all.

    Sources

    https://www.repricerexpress.com/best-amazon-seller-scanner-app/

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