January 7, 2019

Amazon FBA Fees: How to Calculate Comissions of Fulfillment by Amazon (Complete Guide)

Most traders prefer the Fulfillment By Amazon (FBA) method when selling on Amazon, mostly because it removes the burden of having to package and ship-out the product. Most sellers face difficulties in understanding how Amazon FBA fees work and are unable to calculate the exact amount they are paying as commission for trading on this leading e-commerce platform.

This article breaks-down the various fees associated with Amazon FBA and educates you on how to calculate Amazon FBA fees so you don’t get confused the next time you are being charged on a sale made on Amazon.

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Fees Associated With Amazon FBA

When using the Fulfillment by Amazon option it is essential for you to take note of the various charges involved so they don’t bite off a big chunk of your profits. The fees associated with Amazon FBA are summarized into the categories below:

  • Referral Fees –This is a commission you pay for every product you sell on Amazon. This fee is charged as a percentage off the price a product is sold on Amazon. The referral fee amount is dependent on the price of the product and the category in which it is listed, and it usually ranges from 6% and can go as high as 45%.
  • Minimum Referral Fee – Some product categories have a minimum referral fee you pay when the referral fee is very low. It mainly applies to products with low prices and this fee ranges from $0 - $2.
  • Variable Closing Fee – Products listed in the media category such as books, DVDs and other media formats come with a flat fee that ranges from $1.35 to $1.80.
  • Seller Account Fees – This fee varies according to the type of seller account you operate on Amazon. All Professional seller accounts are charged a monthly subscription fee of $39.99 per month to sell on Amazon. For the Individual seller accounts you are charged a flat fee of $0.99 on every product you sell on Amazon.
  • Amazon FBA Fees – This fees covers the cost of picking, packaging and shipping out your product when you place it at an Amazon fulfillment center. It is relatively cheaper and less stressful when Amazon handles all that for you than having to do all the work yourself and incurring a more expensive shipping cost.
  • Storage Fees – This is the cost of storing your products in Amazon’s warehouse. Amazon charges this fee to discourage slow selling products from sitting too long in Amazon warehouses and to ensure that sellers don’t take advantage of the system. This fees are based on the weight and size of the product as well as the time of the year.

Amazon FBA Fee

This fee is paid to Amazon for having it fulfill your order.  Fulfillment by Amazon is available to both Individual and Pro account sellers. This charge covers the entire process that goes into fulfilling an order, and includes picking, packing, shipping, customer service and also return of goods if provided.

These fee are calculated per unit and are charged based on the size and weight of the product. Amazon FBA products are split into two categories:

  • Standard Size Products: These products when fully packed should weigh less than 20 pounds and not exceed 18” x 14” x 8” in size.
  • Oversized Products: Items that weighs more than 20 pounds and exceeds 18” x 14” x 8” fall under the oversized category.

You can determine the size of your product using the table.

For standard-size products that weigh 1 lb or less, and for special oversize products, use the unit weight. For all other products, use the larger of either the single unit weight or the dimensional weight. The dimensional weight is equal to the unit volume (length x width x height) divided by 139.

 To calculate the length plus girth:

  1. Measure the length, height, and width of the packaged unit.
  2. Calculate the girth by adding the shortest and median sides and multiplying by 2.
  3. Add the longest side and girth.

 

Maximum weights and dimensions for packaged items

Product size tier

Weight

Longest side

Median side

Shortest side

Length + girth

Small standard-size

12 oz

15 inches

12 inches

0.75 inch

n/a

Large standard-size

20 lb

18 inches

14 inches

8 inches

n/a

Small oversize

70 lb

60 inches

30 inches

n/a

130 inches

Medium oversize

150 lb

108 inches

n/a

n/a

130 inches

Large oversize

150 lb

108 inches

n/a

n/a

165 inches

Special oversize*

Over 150 lb

Over 108 inches

n/a

n/a

Over 165 inches


If you are selling clothing items there is an additional flat fee of $0.40.

Amazon FBA Storage Fee

You are charged this fee for storing your products in Amazon fulfillment centers/ warehouses. This fee is charged to ensure that sellers do not keep slow-moving stocks for longer than necessary in Amazon warehouses. These fees are based on the space occupied by the product and it is measured in cubic feet and the calender month of the year. This fee is also divided into two categories;

Standard Size:

  • January to September - $0.69 per cubic foot.
  • October to December - $2.40 per cubic foot.

Oversized:

  • January to September - $0.48 per cubic foot.
  • October to December - $1.20 per cubic foot.

Additional FBA Fees

Besides the main FBA fulfillment and storage fees there are also a few minor fees that Amazon charges for other services it renders. Such fees include;

  • Labeling fee: Due to Amazon strict barcode labeling specifications for all item shipped to FBA. You are charged a labeling if your item is not labeled properly.
  • Long-term storage: A long-term storage fee is charged by Amazon when your stock remains unsold for more than 6 months in Amazon warehouse.
  • Removal fee: If you wish to pull out your unsold stock from Amazon you sere charged a removal fee.
  • Returns processing fee: FBA charges a return processing fee is for categories without free customer returns and it is equal to the original fulfillment fee. Amazon charges a repackaging fee if the returned item requires repackaging for resale.
  • Unplanned prep service fee: FBA has strict packaging and prep guidelines. All improperly prepped items are charged an unplanned prep fee.

How to Calculate Amazon’s Total Amount of Commission

Having gone through the various fees/commissions you are bound to be charged while selling on Amazon, here’s an example of how to calculate Amazon FBA fees.

Assuming you operate an Individual selling account and you sell an LED TV for $100 with dimensions 24” × 10” × 3.5” and an outbound shipping weight of 20 lb that is in storage between January to September periods. Your total commission becomes;

                    Referral fee - $100 × 0.15 = $15

                    FBA fee -  $8.13

                    FBA storage fee - $0.43

                    Account fee - $0.99

Your total commission equals $24.55

FBA commissions may vary across different regions in the world. Using the various Amazon FBA profit calculator tools makes computing these charges a lot easier. For example, if you are trading in the UK you could make use of the Amazon FBA calculator UK to get accurate figures of the commissions you are paying.

About Amazon FBA Calculator

Sellers calculate their profits before and after they place their products on Amazon. It is important to do a little research on the on the cost, marketing and estimated sales on an investment to enable you project your expected profit margin. Amazon FBA calculator helps sellers understand the profit they can make on a product. It gives the accurate commissions and fees on a product and the profit percentage for different selling points.

Amazon being one of the biggest e-commerce platform in the globe has helped countless number of traders expand their market and increase their profit margin. FBA fees could sometimes get difficult to make out. So you can use special tools to calculate them. For example, Amazon FBA calculator Chrome. He will help you calculate the profit percentage and choose the best method of execution on Amazon. This is a free extension that anyone can use.

You can also use the FBA Revenue Calculator for calculating fees. In any case, both applications will be useful for sellers who want to understand how to calculate the Amazon commission on their own.