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by Travis F.posted on 06.04.2020

Amazon FBA Fees 2020 Explained

Selling products on Amazon through the FBA program can be very profitable, but that doesn’t mean there aren’t any expenses. Amazon is a business, and if they’re going to let you use their platform and services to sell their products they’re going to charge you for it.

That being said, the Fulfillment by Amazon fees are pretty reasonable. While they can be high for some products, if you know how the fees work and choose the right items to sell you should have no problem making a profit.

So, just what are the Amazon FBA fees you’ll be charged and how much are they? We’ve explained everything below. Keep reading for a complete breakdown of all the fees you’ll pay, plus some additional information.

Note: The fees listed below are for American sellers. If you’re located in other countries like Canada or India your fees will be different. Go to Amazon Seller Central to get the exact fees for your country.

Storage Fees

One of the best parts of utilizing Amazon’s FBA program is that you don’t have to store your own inventory. This is hugely beneficial, as many independent sellers simply don’t have the space to store large amounts of products. 

With an FBA membership, you ship your inventory to Amazon and they’ll store it for you in their warehouses. You can even have your China supplier export and ship your products directly to Amazon if you like. 

Of course, Amazon doesn’t give up their warehouse space for free. Here’s a breakdown of Amazon’s storage fee schedule:

Monthly Storage Fees for Standard Items

Monthly Storage Fees for Dangerous Goods

Changes to Amazon Storage Fees in 2020

Amazon has increased their storage fees from January - September by $0.06 per cubic foot. Starting March 1st, 2020, the fee will now be $0.75 per cubic foot, up from $0.69. All other fees will be remaining the same.

Tips for Lowering Your Storage Fees

Here are a few tips to help you minimize your storage fees while using Amazon’s FBA program:

  • Choose Products That are Small and Light: As you can see, storage fees are largely based on the size of your items. The smaller your products are the less you’ll pay. So look for products to sell that are small but still have a good profit margin.

  • Avoid Dangerous Goods: Amazon charges more for items they classify as a “dangerous good.” This includes any item that contains flammable, pressurized, corrosive, and other harmful substances. Some examples are batteries, hairspray, and insecticide. Familiarize yourself with the types of products Amazon deems to be dangerous and avoid selling them to lower your storage fees.

  • Be Careful What Products You Store from October - December: Due to the high sales volumes that occur between October and December, storage fees go up dramatically during this time. So, ideally you want products that will sell quickly and won’t sit on the shelves too long. Look at your sales for the whole year to see what sold the best and focus on those items instead of taking chances and new items that might not sell.

  • Avoid Storing Your Items with Amazon Long-Term: The longer you store your items with Amazon the more monthly fees you’ll rack up. Plus, in addition to the costs above Amazon charges an extra fee for any items that they store over a year. So try to get your products sold as quickly as possible. If your products don’t sell at all you can have Amazon remove them from storage but you’ll be charged a removal fee (also known as a disposal fee). To avoid this fee consider changing your pricing to make it more desirable to customers. It’s better to sell the item at cost rather than pay to have Amazon dispose of it for you.

  • Utilize Restocking Fees: If one of your customers returns an item they purchased from you, and the return is their fault (they no longer need the item, they bought it by mistake, etc.) you can charge them a restocking fee of 20% of the cost of the item. This can help offset your storage fees for that item.

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Fulfillment Fees

As an online seller, one of the biggest difficulties is fulfilling orders and shipping products to customers. This isn’t a huge deal when you’re only selling a few items here and there. But as your business grows and you start selling multiple items a day it can be difficult to keep up and becomes extremely time-consuming.

This is another reason why the Amazon FBA program is so great. In addition to storing your products, the company will also pick & pack your products in their fulfillment centers and then ship them to your customers for every transaction. You can also utilize Amazon’s Multi-Channel Fulfilment program and have them fulfill orders from your website and other third-party channels.

As with storing your products, Amazon charges a fee for handling items. The fees are based mostly on weight, with costs going up as items get heavier. You’ll also pay more in fulfillment fees for apparel items and any products that are deemed to be dangerous goods.

See below for the new fulfillment fees beginning in 2020.

Changes to Fulfillment Fees in 2020

Amazon is increasing its fulfillment fees on all of its products beginning February 18, 2020.

Here are the fee changes for standard and oversized items:

For clothing items, Amazon will get rid of the $0.40 surcharge and increase fulfillments rates to the following:

Products that are classified as dangerous goods will also see an increase in fulfillment fees.

Here are the changes for standard items that are dangerous goods: 

And here are the changes for clothing items that are dangerous goods:

Tips for Lowering Your Fulfillment Fees

Here are a few tips to help you minimize your fulfillment fees:

  • Avoid Large Items and Dangerous Goods: Just like storage fees, your fulfillment fees will go up if you’re selling larger items or dangerous goods. Weight is also a factor when it comes to these fees, so keep that in mind. Choose products that are small, light, and not considered dangerous.

  • Avoid Selling Clothes and Other Apparel: Your fulfillment fees will go up slightly if you’re selling any kind of apparel, so avoid these items if possible.

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Referral Fees

The final fee you’ll pay when you sell with Amazon is called the referral fee. This fee will be charged to you every time you sell a product on the platform. This is essentially Amazon’s commission. In return for letting you sell on their website and gain access to their large customer base, they take a small portion of each sale you make.

While it can be annoying to have to give up part of your profits to Amazon,  when you consider just how many customers you have access to through their platform the price you pay is more than worth it. Unless you already have a large following you’ll never sell as much on your own website as you will on Amazon, so the referral fee is a small price to pay.

The fee percentage fluctuates depending on the category you’re selling in. So make sure to familiarize yourself with the fee structure before choosing a product to sell.

Here are the referral fees for some of the more popular categories:

  • Books: 15%

  • Camera and Photo: 8%

  • Consumer Electronics: 8%

  • Electronics Accessories: 15% for the portion of the sales price under $100 and 8% for the portion of the sales price over $100.

  • Home & Garden: 15%

  • Kitchen: 15%

  • Office Products: 15%

  • Toys & Games: 15%

  • Beauty: 8% for products with a sales price under $100 and 15% for products with a sales price over $100.

For a complete list of all of Amazon’s referral fees visit Amazon Seller Central.

Changes to Amazon Referral Fees in 2020

Starting from the date of February 18, 2020, Amazon is making the following changes to its referral fee structure:

  • Shoes, Handbags, and Sunglasses: Items in this category with a sales price above $75 will have their referral fee percentage reduced from 18% to 15%.

  • Outdoor Furniture: Outdoor furniture items will be moved into the furniture category, which will reduce the referral fee percentage for these items from 15% to 10%.

  • Personal Care Appliances: Products in this category will be moved into the Health & Personal Care category which will reduce the referral fee percentage for these items from 15% to 10% if their sales price is below $10.

  • Activewear: All items in this category will now have a referral fee percentage of 17%.

  • Ring Accessories: Products in the category will be moved into the Amazon Device Accessories category, making their referral fee percentage 45%.

Tips for Lowering Your Referral Fees

Keeping your referral fees low is all about choosing the right categories to sell in. As you can see, referral fees range from 6% all the way up to 96%.

Amazon Devices has the highest referral fees other than Warranties, so you should generally avoid this category. Gift Cards and Clothing also have higher than average fees, so you might want to think twice about selling these as well.

If you’re looking for a high-selling category with a low referral fee take a look at Camera and Photo. There are plenty of great products to sell in this category and with only an 8% referral fee you’ll be left with plenty of profit.

That being said, categories with slightly higher referral fee percentages, like Books, Home & Garden, and Kitchen can also be profitable.

Additional Fees

There are a few other Amazon fees you should keep in mind when starting your business.

There is a manual processing fee of $0.10 per unit every time you ship Amazon your products. And if you opt for Amazon’s Inventory Placement Service in order to send all of your inventory to a single receiver center there’s an additional per unit cost that ranges from $0.30 - $1.30 and up depending on the size of your items. 

You should also consider inbound services fees, which is the cost of using Amazon's partnered carriers (UPS and FedEx) to ship your inventory domestically within the US to Amazon. There is no set rate for these fees, but on average they usually work out to about $0.30 per unit.

Finally, as with any business, consider the tax you’ll have to pay on your Amazon earnings. Make sure to set that money aside so you have it when it’s time to file your taxes.

How to Easily Calculate Your FBA Fees

As you can see, there are a number of different variables that can potentially affect the fees you’ll pay as an Amazon seller. Because of this, it can be difficult to apply all of the rules listed above and accurately estimate exactly what your fees will be.

Luckily, there are two convenient solutions to help you do this.

The first is the AMZScout Calculator.

  1. To start, simply install it and then go to Amazon.сom.

  2. Find the product you’d like to sell (or a similar item if you’re creating a new product) then click the AMZScout icon in the top right corner of your browser.

  3. The estimator will automatically calculate your storage fee, fulfillment fee, and referral fee.

You can also enter in your cost per unit, your shipping fees, and other expenses to estimate your profit and return on investment.

The second option is the AMZScout Pro Extension. It works similarly to the calculator.

  1. Once you install the extension, go to Amazon.сom,

  2. Navigate to the product you want to sell,

  3. And then click the AMZScout icon in the top right corner of your browser. This will give you access to a wealth of product data.

Click the “Profit Calculator” button to calculate your FBA fees, or review the other data available to you, such as monthly sales, average sales rank, average reviews, and plenty of historical trends and data.

You can also use the Pro Extension to analyze entire niches. Type keywords into the Amazon search bar, and then open the extension once your results appear. You can analyze sales, reviews, rank, and trends for all the products listed there. You can also utilize the Niche Score and Product Score features to determine whether a niche or product is profitable to sell.

With the help of these tools, you can quickly get a preview of your FBA fees and analyze critical data that will help you make smart decisions for your business.

Conclusion

There are a number of FBA fees to consider before deciding to sell a product on Amazon. But assuming you choose products that carry low fees you should be able to make good money selling items on the platform.

And make sure to check out the AMZScout Calculator and Pro Extension, as they will help you easily calculate your fees so you know whether a product is worth selling.

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© AMZScout. All rights reserved 2016-2020 AMZScout Corp., 1735 Market Street, Suite 3750, Philadelphia, Pennsylvania 19103 AMZScout DMCC, Unit No: BA402, DMCC Business Centre, Level No 1, Jewellery & Gemplex 3, Dubai