The Complete Guide to Amazon FBA Fees
Published on May 28, 2023 | 12 min read
If you're venturing into Amazon FBA (Fulfillment by Amazon), you're stepping into one of the most powerful platforms in the e-commerce universe. With its unmatched reach and streamlined logistics, Amazon FBA helps sellers grow fast—but only if they manage their costs effectively.
Amazon’s fulfillment services are not free. They come with a layered fee structure that can eat into your profits if you’re not careful. This comprehensive guide will help you decode every Amazon FBA fee and teach you how to manage them smartly.
What Is Amazon FBA?
FBA stands for Fulfillment by Amazon. With this service, sellers send their products to Amazon’s fulfillment centers. Amazon then takes care of storage, packaging, shipping, returns, and customer service. This allows sellers to leverage Amazon’s massive logistics network and Prime shipping benefits to increase customer trust and conversions.
Why Understanding FBA Fees Matters
Many sellers make the mistake of calculating only the cost of goods sold (COGS) and listing price. But true profitability is determined after subtracting all associated Amazon fees. If you're unaware of what each fee entails and how it applies to your product, you could:
- Price your product incorrectly.
- Underestimate inventory costs.
- Face unexpected charges at the end of the month.
- Lose money despite high sales volume.
1. Fulfillment Fees
Fulfillment fees are charges for picking, packing, and shipping your products. They also include customer service and returns.
How They Work:
Fees depend on your product's size and weight. Amazon uses standardized size tiers:
- Small standard-size
- Large standard-size
- Small oversize
- Medium oversize
- Large oversize
| Size Tier | Weight | Fulfillment Fee (USD) |
|---|---|---|
| Small Std | <1 lb | $3.22 |
| Large Std | 1–2 lb | $5.32 |
| Oversize | >2 lb | $8.26+ |
Tip: Optimize your packaging to fit within a smaller size tier. Even trimming an inch could save $1–$3 per unit.
2. Monthly Storage Fees
Amazon charges a monthly storage fee for holding your inventory in their warehouses.
| Period | Standard Size (USD/cu ft) | Oversize (USD/cu ft) |
|---|---|---|
| Jan–Sep | $0.83 | $0.56 |
| Oct–Dec | $2.40 | $1.40 |
Tip: Send smaller inventory shipments more frequently to avoid overstocking and Q4 storage spikes.
3. Long-Term Storage Fees
If your inventory sits in Amazon’s warehouse for over 365 days, you’ll face long-term storage fees.
- $6.90 per cubic foot
- Or $0.15 per unit (whichever is greater)
How to Minimize It:
- Use the Inventory Health Report to find aging stock.
- Run clearance discounts or liquidation plans.
- Set up automatic removal orders for unsold items.
4. Removal Fees
If you want Amazon to return or dispose of your inventory, you’ll be charged removal or disposal fees.
| Size Tier | Fee per Unit (USD) |
|---|---|
| Standard-size | $0.97–$1.50 |
| Oversize | $2.00–$3.00+ |
Best Practices:
- Forecast demand more accurately.
- Use removal orders before LTSF hits.
- Track sales velocity to avoid deadstock.
5. Referral Fees
Amazon takes a cut of each sale as a referral fee, usually a percentage of the total sale price (including shipping).
| Product Category | Referral Fee % |
|---|---|
| Electronics | 8% |
| Books | 15% |
| Apparel | 17% |
| Health & Personal Care | 15% |
| Grocery | 8%–15% |
Tip: Consider bundling to raise AOV and account for referral fees in your pricing strategy.
Other Potential FBA Fees
- Labeling Fees: $0.30/unit if Amazon applies barcodes.
- Prep Service Fees: $0.50–$2.00+/unit for bubble wrap, taping, etc.
- Returns Processing Fees: Equal to fulfillment fee in some categories like apparel.
How to Keep Your Amazon FBA Fees Low
- Audit fees monthly: Use reports to check for overcharges.
- Use tools: Helium 10, Jungle Scout, SellerBoard, and Amazon’s FBA Calculator.
- Optimize packaging: Fit within the smallest possible tier.
- Use reimbursement services: Like Getida or Refunds Manager.
Final Thoughts
Amazon FBA can either supercharge your e-commerce business or silently reduce your profit margin. Being aware of the different FBA fees and actively working to reduce them will help you stay ahead of the competition.
Try our FREE Amazon FBA Fee Calculator and start optimizing your business today.
FAQs: Amazon FBA Fees
Q1. Can I avoid Amazon FBA fees?
No, but you can reduce them with smart strategies.
Q2. Are FBA fees tax deductible?
Yes, they are considered business expenses in most regions.
Q3. Is FBA better than FBM?
FBA is better for scalability and fast shipping; FBM is better for niche or large products.
Q4. What if I’m selling in multiple countries?
Fees vary by marketplace—check each region’s FBA structure.
Q5. Do I pay fulfillment fees on returns?
In some categories, yes. It’s equal to the original fulfillment fee.
Understanding your fees is the first step toward a profitable Amazon FBA business.