Understanding Amazon Fees: A Clear Guide for Your Business
To succeed on Amazon, you must understand your costs. Profitability isn't just about sales; it's about what you keep after Amazon's fees. This guide breaks down the essential fees every seller needs to know.
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Part 1: The Core Fees (Paid by All Sellers)
These are the fundamental fees, whether you ship products yourself or use FBA.
1. Monthly Subscription Fee (Professional Plan)
What it is: A monthly subscription for your Professional Seller account.
Cost: $39.99 per month.
When it's charged: Once per month on the date you subscribed.
This is a flat fee for sellers on the Professional plan, which gives you access to advanced selling tools.
2. Referral Fees (Amazon's Commission)
What it is: A percentage of the total sales price that Amazon keeps.
How it's calculated: The fee is calculated on the total sales price—which includes the item price, plus any shipping or gift-wrapping charges paid by the customer.
How much is it?
- Most categories are around 15%
- Some, like "Clothing & Accessories," have tiered rates (e.g., 5% or 17% depending on price)
- Others, like "Computers" and "Consumer Electronics," are lower at 8%
Minimum Fee: For most categories, Amazon will charge the greater of the referral fee percentage or a $0.30 minimum fee per item.
Part 2: FBA Fulfillment & Shipping Fees
These are the costs associated with using Amazon's fulfillment network to store, pack, and ship your products.
1. FBA Fulfillment Fee (The "Pick & Pack" Fee)
What it is: A fee charged each time an FBA item is sold and shipped.
How it's calculated: The fee is based on your product's size tier and shipping weight. The smaller and lighter your product, the lower the fee.
Important Notes:
- Apparel (Clothing): Has its own specific, slightly higher rate card.
- Dangerous Goods (Hazmat): Also have a separate, higher fulfillment fee structure due to special handling requirements.
2. Low-Price FBA Program
What it is: An automatic discount on the FBA Fulfillment Fee.
Eligibility: Your product's total price must be under $10.
The Benefit: Eligible products automatically receive a fulfillment fee that is $0.77 cheaper than the standard rate for that size and weight.
Amazon offers a special discount on fulfillment fees to make selling low-cost items more profitable.
Part 3: FBA Inbound Placement Service Fee
This is a fee for the service of distributing your inventory across Amazon's warehouse network to place it closer to customers, which enables faster delivery.
How much is it? The fee varies based on item size, weight, and the inbound location. Sending to a single location is more expensive than splitting shipments.
Part 4: Optional FBA Prep & Labeling Service Fees
If you don't want to prepare or label your products according to FBA's strict requirements, you can pay Amazon to do it for you.
What it is: A per-unit fee for services like applying barcodes, poly-bagging, or bubble-wrapping.
How it works: In your shipping plan, under "Who preps?" and "Who labels?", you can select "By Amazon."
Why use it? To save time and avoid receiving delays or penalties caused by improper packaging.
Note: You must still package fragile or sharp items securely before sending them to Amazon, even if you use this service.
Part 5: FBA Removal & Disposal Fees
When you need to get inventory out of an Amazon warehouse, there's a fee for that, too.
What it is: A per-unit fee charged when you ask Amazon to either return your inventory to you (a removal) or throw it away (a disposal).
When is it used? To retrieve slow-selling stock, deal with unsellable customer returns, or clear out aged inventory to avoid long-term storage fees.
How it's calculated: The fee is charged per item and is based on the item's shipping weight and size tier. Special handling items (like apparel or dangerous goods) have a different rate card.
Part 6: FBA Aged Inventory Surcharge
This is a critical fee designed to discourage sellers from storing slow-moving products in Amazon's warehouses for too long.
What it is: An additional monthly fee charged on units that have been stored in a fulfillment center for more than 181 days.
How it works: Amazon assesses your inventory on the 15th of each month. The fee is charged on top of your regular monthly storage fees.
The Key Point: The surcharge increases significantly the longer your inventory sits. For example, stock aged 271-300 days is charged a much higher rate per cubic foot than stock aged 181-210 days. This fee can quickly erase your profits on slow-selling items.
Part 7: Closing Fees (for Media Categories)
This is a special flat fee that applies only to products sold in specific media categories.
What it is: A fixed fee charged per media item sold.
Which categories are affected?
- Books, DVD, Music
- Software & Computer/Video Games
- Video Game Consoles & Accessories
Cost: $1.80 per unit sold. This fee is charged in addition to the Referral Fee for that item.
Understanding Product Size Tiers: The Key to FBA Costs
To calculate your FBA fees accurately, you must first understand how Amazon categorizes your product's size. This is the foundation for almost all FBA-related costs.
What it is:
A measurement category that Amazon assigns to every product based on its size and weight.
How it's determined:
A product's size tier is based on its:
- Packaged Dimensions (Length x Width x Height)
- Unit Weight
- Dimensional Weight (A calculation based on volume for larger, lightweight items)
Why it's crucial:
The product size tier directly determines the rates for nearly all FBA fees, including Fulfillment Fees, Inbound Placement Fees, and Removal/Disposal Fees.
There are other important fees to be aware of, such as the Monthly Inventory Storage Fee and Returns Processing Fees.
Frequently Asked Questions
What's the main difference between the Monthly Fee and the Referral Fee? We find it a bit confusing.
That's a common question! Think of it this way: The Monthly Subscription Fee ($39.99) is like your rent for having a professional shop on Amazon. The Referral Fee is the commission Amazon takes only when you make a sale, like a percentage of your revenue.
Is the Referral Fee calculated just on our product's price?
It's important to know that the Referral Fee is calculated on the total amount the customer pays. This includes not just your item's price, but also any shipping or gift-wrapping charges they add to the order.
Can our business avoid some fees by shipping products ourselves (FBM)?
While you will avoid FBA-specific fees like fulfillment and storage, it's crucial to remember that core fees like the Referral Fee and the monthly Professional Plan fee apply to all sellers, regardless of the fulfillment method you choose.
What are we actually paying for with the FBA Fulfillment Fee?
This fee covers the entire physical process Amazon handles for you. It includes an Amazon employee picking your product from the shelf, packing it in a box, shipping it to the customer, and also covers the cost of customer service and returns management for that order.
How do we enroll our products in the Low-Price FBA program to get better rates?
Great news – you don't have to do anything! The program is automatic. As long as your product is priced under $10, Amazon automatically applies the lower fulfillment rates, helping protect your margins on lower-cost items.
Is it possible for us to avoid paying the FBA Inbound Placement Fee?
Yes, it is. The key is to select the "Amazon-Optimized Shipment Splits" option when creating your shipping plan. This will require you to send your inventory to multiple warehouse locations, but it will save you the placement fee on that shipment.
In what situation would our business need to pay a Removal or Disposal Fee?
You'll encounter these fees when you need to pull inventory out of an FBA warehouse. Common business scenarios include retrieving slow-moving stock to avoid long-term storage fees or dealing with customer returns that cannot be resold.
What's the time limit before we get hit with Aged Inventory Surcharges?
This is a critical date to track for your business. The surcharge begins applying to any unit that has been in a warehouse for over 181 days. We advise clients to monitor their inventory age closely, as this fee is charged monthly and can significantly impact profitability.
Do we need to account for a Closing Fee on all our products?
No, this is a special fee. You only need to account for the $1.80 Closing Fee if you sell products in Media categories like Books, DVDs, or Video Games. It does not apply to other categories.
We sell t-shirts. Will our fulfillment fee be the same as another product with the same weight?
That's an excellent question. It's important to know that Amazon has a separate, specific rate card for the Apparel category. So, your t-shirt's fee will likely differ from a non-clothing item of the exact same weight.
Why should we pay such close attention to our product's "Size Tier"?
We emphasize this because the size tier is the absolute foundation for almost all your FBA costs. It directly impacts your rates for fulfillment, storage, and more. An incorrect size tier classification can quietly eat away at your profits, so ensuring its accuracy is vital.
Can we just pay Amazon to handle all the prep for our fragile items?
While you can use the FBA Prep Service for tasks like bubble-wrapping, it's critical to remember that your business is still responsible for securely packaging fragile items before they are sent to Amazon. They must be able to withstand transit to the warehouse to be accepted by the prep team.
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