Amazon has 5 million sellers using its platform, and literally thousands more are joining every day.
With so much competition, being a successful Amazon brand is about knowing the system better than your competitors and third-party resellers. Familiarity with Amazon’s algorithm and FBA fees will give your brand a leg up and help you impress Amazon buyers.
Read on to learn how to navigate Amazon’s fees and lead your business to steady growth.
What Are FBA fees?
There are two kinds of brands on Amazon. They are the FBA (or Fulfilled By Amazon) brands and the FBM (Fulfilled By Merchant) brands.
Both FBA and FBM brands have to pay certain fees to work with Amazon. These are the “standard fees.”
Types of Standard Fees
There are three kinds of standard fees for all kinds of brands: referral fees, the professional seller subscription fee, and refund administration fees.
Amazon referral fees are fees that Amazon charges brands for selling a product through the Amazon platform. They are frequently 15% or less of the sale value of each item, and are charged after a sale is made.
While 15% is the closest figure there is to a “typical” fee percentage, there are some products that have larger or smaller fees. Cameras, cell phone devices, and other electronics often have only an 8% fee.
On the other hand, if you want to sell in the Amazon Device Accessories category, a hefty 45% of your sale will end up going back to Amazon. And that’s only from the referral fee!
Professional Seller Subscription Fee
Alt text: Amazon packages ready to be shipped
There’s a fee difference between what Amazon calls “Individual” accounts and “Professional” accounts.
The basic idea is, if you want to sell a lot on Amazon, it’s probably more cost-efficient for you to go with the Professional seller subscription.
Under the Professional seller subscription, you pay a flat $39.99 fee each month and get access to some tools that Individual accounts don’t enjoy. These can include digital tools and spreadsheets, the power to customize your shipping rates, and the ability to sell products in many different categories at the same time.
But what if you don’t need these tools? Then you should stick with the Individual account, right?
Well, under the Individual account rules, you don’t have to pay that $39.99 monthly fee. On the other hand, you do have to pay an extra 99 cents on every sale you make. And remember, that’s on top of Amazon getting a cut from the referral fee, plus the fees we discuss below.
If you’re going to make 39 sales or fewer each month on Amazon, then the Individual system might work for you. Otherwise, the Professional is the way to go.
Refund Administration Fees
Amazon handles a lot of the details when one of your customers wants a refund. For that service, they charge a refund administration fee. This fee can not go any higher than $5 per item being refunded.
However, if a single order has several items, then each refunded item can cause a fee of up to $5.
New brands can find help to learn more about Amazon marketplace charges here.
Fulfillment By Amazon fees do not affect FBM brands. FBA fees include standard product fees, storage, and long-term storage fees. All of these fees affect your total FBA cost, which will affect whether or not you should upgrade from being an FBM to an FBA seller.
Standard Product Fees
Standard fees for each product you sell as an FBA seller depends on your product’s size. If your product is less than one pound, then it may incur a fee of about $2.41, and $4.71 for two pound products. Every extra pound after that will add 38 cents to the total fee.
Oversized products cost extra. An oversized product is one that measures greater than 18 by 14 by 16 inches. Small oversized products such as those over 70 pounds or longer than 60 inches on the longest size start at $8.13.
Like with the normal-sized products, each pound over 2 pounds will add 38 cents to the total fee.
There are many details that can affect the exact calculation for the fee, but these simplified calculations can help you estimate how much your product’s fee will be.
Alt text: Man in a storage facility with cardboard boxes
According to Amazon, your Amazon FBA “storage fees are based on the daily average volume (measured in cubic feet) for the space your inventory occupies in fulfillment centers.” In other words, the more room you take up, the more you pay. Since your inventory fluctuates from day to day, they use the average amount of storage space you take up to calculate your fee.
During normal months, you’ll be charged 75 cents for each cubic foot of space you take up with standard-sized products. Your oversized products will cost you 48 cents per cubic foot.
From October to December, the prices are higher: $2.40 per cubic foot of standard-sized products, and $1.20 per cubic foot of oversized products.
Long-term Storage Fees
If you leave your products stored in a fulfillment center for more than 365 days, then they become “long-term storage” items. They cost $6.90 per cubic foot of storage.
You can find more details about long-term storage fees from Amazon here.
There are some other service fees that most brands don’t have to pay. If you sell textbook rentals, you’ll be charged $5 for each one. Media items like CD’s and DVD’s will cost you $1.80 per sale.
Are you an FBA seller, or an FBM looking to become an FBA? Keep track of your costs and sales performance with our trusted software tools. Contact us here to learn more.
How to Keep Track
Our Feedback management tools help brands streamline their Amazon operations while establishing trusting relationships with customers. Learn more about our feedback tools here.
Amazon Refund Management
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ASDAL’s software, GRIT, provides world-class refund management for brands by automating all refund reports to easily view any additional refund fees on their Amazon store. For more information regarding ASDAL’s refund manager or the many other tools we offer, get in touch with us today!
Amazon Accounting Solutions
ASDAL can simplify and even automate many of your accounting, sales, and advertisement activities, freeing up time for you to focus on building your brand.
If you’re interested in using our tools to automate your brand’s operations on Amazon, get in touch with us today! at ASDAL.
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