If you are an Amazon FBA seller, you must read this article for the following reasons:

• What are the Various FBA Features and Services For Which Amazon Charges Fees?
• Amazon FBA Fees for FBA Services Including Fulfillment

When it comes to selling products online, you know how important it is for your customers to receive their orders on time. Thus, to grow your brand and keep customers satisfied, you need to have an agile fulfillment process. And when it comes to Amazon, it is the king of fast shipping.

So, if you choose to use the Fulfillment by Amazon (FBA) service, you do not have to worry about the logistics. That’s because Amazon FBA service provides reliable delivery and fast shipping on behalf of its third-party sellers at a cost-effective fee. 

Thus, if you wish to subscribe to Amazon’s FBA service, you must know in detail what comprises Amazon FBA Fees are. In this article, we are going to reveal the Amazon FBA fees that Amazon under various plans to pick, pack, and ship the orders of sellers. 

Amazon FBA Cost

The cost to sell on Amazon depends on your selling plan, product category, fulfillment strategy, and other variables. The options are flexible, so you can find the combo that works best for you and your goals.

I. FBA Export Fees

The Amazon FBA Export fees under Amazon FBA Fees are charged depending upon FBA Exports made through Amazon or through Multi-Channel Fulfillment.

In the case of FBA Export through Amazon, there are no additional fees. The sellers fulfilling international orders on Amazon will have to pay the standard-size Media order fulfillment fees as mentioned above.

However, in the case of FBA Export through Multi-Channel Fulfillment, the sellers must use the following rates to calculate the cost of fulfillment.

Note that a Standard-Size Unit refers to a packaged Unit that is 20 lb. or less in weight. Plus, its longest side measures 18 inches or less, its shortest side measures 8 inches or less, and its median side measure 14 inches or less. Thus, a Unit that exceeds any of the aforementioned dimensions is an Oversize Unit.

To calculate the cost of fulfillment in the above case, sellers must first calculate the total shipment weight. In order to do so, they must add a dunnage factor of 10% to the combined total of the individual Unit weight of each Unit in the shipment. Further, the sellers must round up the resultant figure to the nearest pound. This is a scenario where a single Unit is delivered to a single international address. Thus, the entire shipment has Units, each of which needs to be delivered to a different international address.

There can also be a scenario where sellers submit an order to the Amazon fulfillment center wherein multiple Units are to be delivered to the same international address. Furthermore, such Units are to be shipped together. In such a case, sellers will determine the weight handling fee using the combined weight of the order. In case the Units are split up among different shipments, then sellers must calculate the weight of each shipment separately.

II. FBA Fulfillment Fees 

Also called the ‘pick and pack fees, the FBA fulfillment fees under Amazon FBA Fees are the per-unit charges that you pay for fulfilling the orders to customers for purchases made at Amazon. These differ based on various parameters including the weight, size, and the category of products that you sell. 

Further, the various factors like item details, rates, or calculations that determine the fulfillment fees also depend on the type of program that you are registered for. There are two programs that you can choose from to avail of FBA services. These are as follows: 

1. FBA Small and Light 

As the name suggests, this service helps in fulfilling orders for small and lightweight FBA inventory items that cost less than $8. Only products that meet the following parameters qualify for the FBA Small and Light Program. 

• Product measurement – 18 x 14 x 8 inches 
• Weight – 3lb  or less 
• Price – $8 or less 

Further, the items covered under the Small and Light Program are subject to all standard selling on Amazon fees. Further, additional fees are applicable, which vary for items based on size tier, weight, and dimensions. 

Let’s look at the Small and Light fulfillment program fee per unit for various size tiers under Amazon FBA Fees. 

Apart from the program fee, you may also have to pay FBA Label Service Fee which is $0.10 per unit. However, this is an optional service, and completely your choice to avail yourself of it or not.  

2. FBA Fulfillment Fees for Multi-Channel Fulfillment (MCF) Orders

This is a fee under Amazon FBA Fees that is charged for orders that you as a merchant receive on other websites apart from Amazon. These charges are calculated based on:

• product volume and dimensions – these refer to the size of products when it is completely packed and ready for shipment as per the FBA policies. 
• product size tier – these are categories of measurement that consider unit weight, product dimensions, and dimensional weight of the products that are fully packed. 
• unit weight of a particular product – this is the weight of a single unit of the item packaging given by the manufacturer. 
• dimensional weight and whether it is used to determine charges for the item – this is nothing but the volumetric weight of the package which is calculated by considering the package’s length, height, and width. 
• shipping weight of the item

You must check out the links above to know how to determine these individual components of the MCF fees under Amazon FBA fees. Once these are determined, you can then determine MCF fees for standard 3-5 days shipping, expedited 2 business day shipping,  and priority next day shipping. 

Let’s take an example here to know how the MCF fee is determined. This is the MCF fee per unit within the United States. 

Visit MCF fees to determine the fees charged for items eligible for the Small and Light program. 

III. Monthly Inventory Storage Fees

Amazon collects monthly inventory storage fees from you for your inventory stored in its fulfillment centers. This monthly inventory storage fee is determined basis your daily average volume in cubic feet. The daily average volume in cubic feet depends on the size of a unit that is fully packed and ready for shipment as per the FBA policies. 

Additionally, this fee changes with respect to the size of the product and time of the year. Also, this fee is determined with the help of a different rate cared if your goods come under dangerous goods. Go through this Dangerous Goods Identification Guide to know if your goods are covered under this category. 

The following items need to be determined to calculate the inventory storage fees:

• item size tier
• current month
• product volume 
• average daily units 
• dangerous goods classification status

Once these are determined, use the following rate cards to determine your inventory storage fees. 

Let’s say the following are your product details: 

• Size tier – standard-size
• Current month – October 
• Volume per unit – 0.10 cubic feet
• Average daily units in storage – 200 
• Dangerous goods classification status – not a dangerous item 

Accordingly the inventory storage fees will be:

= average daily units x volume per unit x applicable rate 

= 200 average units/month x 0.10 cubic feet/unit x $2.40 per cubic foot (standard-size rate in October) = $48 total monthly storage fees. 

IV. Long Term Storage Fees 

This is another fee under Amazon FBA fees that are charged if your inventory occupies space in the Amazon fulfillment center for more than 365 days. The long-term storage fees are charged on a month-on-month basis over and above the monthly inventory storage fee. 

Further, this fee is calculated with the help of the inventory snapshot taken on the 15th of every month. 

The FBA determines the age of your inventory using the FIFO or First In First Out method. This means the items that are sold or removed are subtracted from the inventory that has been there for the longest time in the fulfillment network. This is regardless of whether the items were shipped to customers or removed by the merchant. 

How is the Long Term Storage Fee Determined?

• It is usually charged on a monthly basis, between the 18th and 22nd day of every month
• The fee is determined on a per-unit basis. Accordingly, the rate is based on unit volume or per unit, which is greater of the two. 
• The rate considered is $6.90 per cubic foot or $0.q5 per unit, whichever is greater. 

Now, how to determine whether your inventory would be charged long-term storage fees or not? Well, you can check this using ‘Manage Inventory Health’. Using the amount of time your inventory has been in the fulfillment center filter, you can easily know if your inventory is subject to such fees. 

The following is an example that will help you understand how long-term storage fees is typically determined. 

V. FBA Disposal Order Fees

The next fee under Amazon FBA Fees is the FBA Disposal Order Fees. This is the fee that you pay per item when you ask Amazon to remove or dispose of your product items lying in the Amazon fulfillment center. You as a merchant too can remove such items by giving a removal order to Amazon. 

Further, Amazon charges such fees only when the disposal or removal of items is done. The rate charged is per unit disposed of and is calculated based on the shipping weight. 

Thus, you need to determine the following items to calculate the disposal fee. 

• Shipping weight
• Product size tier 

Using these details, you can determine the disposal fee based on the below-mentioned rate cards. 

Need Help With Your eCommerce Accounting / Tax?

We at freecashflow.io are an agency that focuses on helping online business owners like you. Our partners have worked in multi-billion dollar MNCs such as Warner Brothers, EY, and paramount. If you want a trusted partner to help you with your tax/accounting, Freecashflow.io is here to help.