With recent changes to Amazon FBA fees, you may be wondering what spring has in store for you and other FBA sellers. Here’s a breakdown of your costs and fees.
We ran through Amazon selling fees in a recent post. We were very pleased that you, our readers, reached out to us with comments and questions. We’d now like to go over the fees you’d be charged when selling your orders via FBA (that’s seller lingo for AFN- Amazon Fulfillment Network).
How Much Does FBA Cost?
Amazon uses various criteria to charge FBA sellers, like the type of item, the size and the selling price. Products selling for more than $300, for instance, don’t incur any fulfillment fees, but all others do.
There are some Amazon fees that apply to all merchants, as shown in the table below.
Aside from these, there are some FBA-only fees. Here’s a breakdown of these Amazon FBA seller fees:
- Fulfillment Fees
As mentioned in a recent news post, these costs are no longer broken down in your statements into pick & pack and weight handling fees. They’re now charged as a single, per-unit Fulfillment Fee. To view your estimated fulfillment fees, please read this page.
- Storage fees
These are levied monthly, depending on the space your item takes up at the fulfillment center, in cubic feet. They vary by type of item and by time of year.
Items that have been stored at a fulfillment center for more than 6 months incur a Long-Term Storage Fee of $11.25 per cubic foot. Fees charged for items stored longer than 12 months are twice as high.
FBA-only fees (points 3 and 4 above) are no longer different for media and non-media items. Standard Size Items will be charged for domestic and international orders as seen below:
For domestic orders, oversize items are charged as below:
To view your storage fee estimates, use Amazon’s storage fee calculator.
Note: Amazon FBA fees will vary depending on the platform (Amazon.com versus your own website, for instance). VAT or Tax may apply in some states or countries. Using the FBA Revenue Calculator (sign-in necessary) is a good way to estimate these fees if you’re a US-based seller (so VAT does not apply to you). For multi-channel fulfillment, a dedicated help page is available here.
I personally recommend using the free FBA Calculator for Amazon browser extension to check all your Amazon FBA fees, as well as monthly sales and revenue estimates across all venues.
So What’s Changed?
The pie chart above shows you an estimate of Amazon FBA fees and shipping costs for ASIN B01CNSO79Q, as they would have been at the beginning of the year. But AFN charges are no longer broken down as above. This year, fulfillment fees (weight handling + pick & pack + order handling) will be billed together.
Secondly, fulfillment fees will be lower and storage fees will be higher. That means you need to be more prudent when you send items to Amazon. Now more than ever you need to make realistic storage and sales forecasts.
How FBA Weights are Calculated on Amazon
Before you send your products to a fulfillment center, double-check the outbound weight. Amazon may charge you more than what you’d expect in fulfillment fees. That’s because they add the weight of their packaging to the shipping weight calculation, for one thing.
Secondly, you may be charged based on the concept of dimensional weight or volumetric weight. It’s an estimated value that allows them to levy more in Amazon FBA fees for light but bulky products that take up a lot of space.
So, for large and oversize products, you’ll be charged for either the dimensional or the unit weight – whichever is greater. The dimensional weight is calculated in pounds by Amazon as: (length x width x height in inches)/166. The unit weight is the weight displayed on your scale.
How to Estimate Your FBA Profits
To calculate your profit estimate, use the FBA Revenue Calculator. Ultimately, you’ll need to decide whether to use MFN or FBA fulfillment based on this estimate. Comparing MFN and FBA profits usually comes down to fulfillment and storage costs (the bottom half of your profit report). That’s because Selling on Amazon fees (referral, variable and per-item fees) are the same, as seen below:
Note: We used the same selling price here (shipping charge included) and the same ship-to cost for both MFN and AFN fulfillment. In reality, sending more than one unit per shipment to an Amazon fulfillment center may cost you less than sending one unit at a time to your MFN customers. However, you need to make sure that the product sells quickly, before monthly and long-term storage fees offset those small savings.
So How Much More Does Selling on FBA Cost Me Now?
This will depend on the number of units you send to Amazon, how much it costs for you to ship them to a fulfillment center, their weight and how quickly they sell. To make it easier for us to visualize the change in fulfillment and storage fees, we’ll exclude fixed and universal fees (Fig. 1) from our calculations.
- Scenario 1
Our reference product is ASIN B01CNSO79Q, the one in figures 4 and 6. Let’s assume that it costs $2.8 to ship to Amazon, you’ve paid your distributor $11 for it, and you sell it in the first month for $32.99. Here’s a cost comparison:
So, you’d save $0.03 selling it now.
- Scenario 2
Another product, ASIN B00F5E43E0, costs $5 to ship to Amazon. You’ve paid your distributor $50 for it, and you sell it in the first month for $159.51. Here’s what your total FBA costs would look like:
So, you’d earn an extra $2.45 selling it now.
Note: These calculations are estimated based on the given weight and dimensions for these products. Actual costs may vary.
How About Long-Term Storage Fees?
What happens if you were to sell these 2 products several months from now on FBA? Let’s use the Amazon Inventory Storage Calculator to see what extra storage fees you would pay until then.
The first product, ASIN B01CNSO79Q, has an estimated volume of 0.242 cubic feet per unit. You’d spend $0.13 per month until September. From then on, it’s $2.72 ($11.25/0.242 cubic feet) per unit on long-term storage fees, every month for the next sixth months. Then the fees would double, at least.
The second product, ASIN B00F5E43E0, has an estimated volume of 0.072 cubic feet per unit. You’d spend 4 cents per month from now until September. From then on, you’d pay long-term storage fees of 81 cents per month ($11.25/0.072 cubic feet) for the next 6 months. From then on, it’s twice as much, if fees stay the same.
Assuming you sell both these products in 9 months, you’d pay an extra $8.49 and $2.67, respectively, per unit, in storage fees. In other words, the much cheaper but bulkier product would cost you more than 3 times what it costs to store the second one. Also, it wouldn’t be profitable for you to store the first product on FBA any longer.
This concludes our Amazon FBA fees analysis. Please share your comments and and experiences with the Amazon FBA process.
Melanie takes an active interest in all things Amazon. She keeps an eye on the latest developments, and keeps Amazon sellers up to speed.