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Amazon FBA Fees 2023 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.
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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.
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 2022.
Changes to Fulfillment Fees in 2022
Amazon is increasing its fulfillment fees on all of its products beginning January 18, 2022. Expect across the board increases with the heaviest impact under the Medium Oversize category.
Here are the fee changes for all items:
Small/Large/Oversize Standard Items
Small, large, and oversized items will be seeing a net increase across the board averaging at nearly $0.20 per unit. Larger items can expect expense increases anywhere from $0.50 and $12.
Focus particularly on the “medium oversize” category, which is seeing a per-pound increase of .05 cents. This increase seems small on paper but can add up heavily.
Apparel will also be seeing similar increases across the board.
Small/Large Standard Apparel
Apparel items will be seeing similar increases ($0.20), with larger items sitting at $0.50 per unit.
Products that are classified as dangerous goods will also see an increase in fulfillment fees. These increases are exact to increases from standard items.
Here are the changes for standard items that are dangerous goods:
Small/Large/Oversize Dangerous Items
Dangerous items are seeing similar increases to standard items, varying from 20 cents to $13. The same per-pound increase from above of .05 cents applies to dangerous items as well.
For those who ship in the small and light category, you can also expect significant fee changes.
Here is a list of fulfillment fee changes for small and light:
Small and Light Standard Items
Prior to January 18, 2022, the 12 to 16 oz weight did not apply to these items.
Small and Light Large Standard Items
Prior to January 18, 2022, anything 12 oz to 3 lbs was not priced under this category. Expect major changes if you sell larger quantities in the small and light categories.
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.
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 2022
As of February 1, 2022, Amazon’s storage fees will increase to the following:
January - September: $0.83 (standard) and 0.53 (oversize) per cubic foot
October - December: $2.40 (standard) and $1.20 (oversize) per cubic foot
This is an increase of .06 cents per cubic foot under the January through September date range with no change to October through December storage rates.
There will also be a new surcharge for aged inventory starting on May 15, 2022. The surcharge includes items in fulfillment from 271 to 365 days and will cost $1.50 per cubic foot. The standard fee for 365 days (or more) will remain the same at $6.90 per cubic foot (or $0.15 per unit).
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.
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 2022
Despite increases in referral fees, Amazon’s services are usually around 30% cheaper than other eCommerce providers. There is one change worth looking out for.
Amazon has announced one change related to the reduction of referral fees for lawn mowers and snow throwers from 15 to 8%. However, this change is exclusive to items costing greater than $500.
Those not part of this niche can breathe a bit knowing that referral fees are going to stay the same.
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.
FBA manual processing fees need to occur when you do not provide box content information. In this case, you should expect these fee rates:
January - October: $0.15 per unit
November and December - $0.30 per unit
To avoid this fee, you will need to supply data about the ship box contents you plan on selling to your local fulfillment center.
Amazon also offers an inventory placement service that allows you to send all of your eligible inventory to a single receiving center. The service will take this shipment and spread it amongst multiple fulfillment centers, giving your products a greater spread.
Here are the inventory placement fee rates per item:
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. Download the AMZScout FBA Calculator.
2. Open the Calculator.
Go to the Amazon marketplace
Open the listing for a product you want to analyze
Click the AMZScout FBA Calculator icon in the browser extension menu
3. Fill in the details. Enter Taxes (including VAT), Product Cost, etc.
4. Check the results. The calculator will automatically determine your storage, fulfillment, and referral fees.
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. Download the AMZScout PRO Extension.
2. Open the Extension
Amazon will open automatically once the Extension is installed.
Start a free trial. If you’re new, you’ll see a sign-up form. Fill in your information to start your trial.
Search for a product that you checked with the FBA Calculator
Once you have the results, click the AMZScout symbol in the lower-left corner of your browser to open the extension.
3. Check your FBA fees. Click the Profit Calculator icon and enter your details into the fields.
4. Review the results. The Calculator will automatically calculate your FBA fees, Net Margin, ROI, and other metrics.
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 FBA Calculator and PRO Extension, as they will help you easily calculate your fees so you know whether a product is worth selling.
