Businesses across the globe have taken advantage of Amazon’s e-commerce opportunities to grow and expand.
Furthermore, Amazon offers many business solutions that sellers can make use of to enhance their sales numbers, in addition to selling their products on its platform and increasing their market share.
Many clients have found that Fulfillment by Amazon, or Amazon FBA, has helped them streamline their business on Amazon.
In this article, we will explore how Amazon FBA works as well as the associated Amazon FBA fees.
Before we begin, let us remind you that these Amazon FBA prices and Amazon FBA fees are based on Amazon U.S. prices, so these may vary.
How Amazon FBA Fees Work?
Let’s take John and Chris as an example who recently began their Amazon business in order to understand how Fulfillment by Amazon (FBA) works.
John is responsible for packing and shipping the product to the customer after a customer orders one of his products.
Besides this, he must ensure that the products are stored correctly and that customer support is available to assure his customers’ satisfaction.
It may not seem that difficult for a single product, but as John’s business grows, it becomes an even bigger challenge. John is likely to do everything by himself, so there is the possibility of errors.
Chris, however, has delegated all of those duties to Amazon by using the Amazon FBA solution.
In order to sell his products on Amazon, Chris simply needs to ship them. In addition to storing their products in their secure fulfillment centers, Amazon also packs, ships, and offers customer service for these products. Chris has effectively handed over the picking, storing, packing, and shipping of his products to a team of highly-trained professionals by using Amazon FBA.
As a result of FBA, Chris has also been able to expand his customer base and scale his business more rapidly.
The Amazon Seller Central dashboard can be used to set up and configure Amazon FBA. Due to its simplicity and plethora of tools, tracking and monitoring product inventories is simple and easy.
Amazon FBA Program Benefits
The benefits associated with Amazon FBA are numerous, the most notable of which are listed below.
- You gain an advantage over your competitors when you sell your products through Amazon FBA, which automatically provides you with Amazon Prime two-day shipping and free shipping. By displaying the Amazon Prime logo on your products, you automatically reach out to a wider audience.
- You don’t have to worry about logistics for your business since Amazon fulfills your orders. Now you can concentrate on growing your company. By storing your inventory in Amazon’s fulfillment centers, you can easily fulfill more orders as they come in.
- FBA products get a higher ranking in Amazon’s search results – Amazon’s search algorithm gives preference to FBA products over non-FBA products. As a result, products fulfilled via FBA are ranked higher in Amazon’s search results, resulting in more sales. Check this out for yourself by visiting Amazon and searching for any product. Many of the results on the first page will likely be Prime listings.
- Providing Customer Service and Easy Returns – Online shoppers prefer to purchase products that can be returned easily. Further, a product that offers customer service is more likely to sell than one that doesn’t.
Understanding Amazon FBA Pricing
In addition, Amazon FBA Fees are paid for these excellent services. Specifically, the following factors determine the price:
- Weigh your Amazon product and calculate its volumetric weight
- Dimensions of a product are also known as its size
- Channels through which the products are sold – Amazon, or a third-party site
Selling a product on Amazon using Fulfillment By Amazon will mainly involve two prices:
- Fees that you are charged by Amazon when it fulfills your order. Picking, packing, shipping, and customer service are all factors of fulfilling an order – if applicable, returns, too. It is important to note that these fees are per unit as well.
- Amazon warehouses, also known as fulfillment centers, charge monthly fees if you decide to store your inventory there. The cost is based on the amount of space occupied by the products.
Size and weight of your products are also important factors to consider. The Amazon FBA pricing is determined by how much your product weighs and how big it is. The size of Amazon’s products has been split into two categories in order to simplify things:
- Standard Size –A product must weigh less than 20 pounds when it is fully packed to be considered a standard-size item. In addition, its dimensions cannot exceed 18″ x 14″ x 8″.
- Oversize – Oversized products have dimensions and weights that are greater than this. In such a case, a product would fall into the oversize category if it weighed more than 20 pounds and measured more than 18 inches long.
Fees for Amazon FBA products
There is a good chance that you have heard of Fulfillment by Amazon if you sell your goods on Amazon.
Basically, everything is covered here, including picking, packaging, and shipping the products to your customers as well as helping your clients with shipping, payments, returns, etc.
Fees for Fulfillment by Amazon for Products Not Sold By Amazon – Multichannel Fulfillment
As well as selling on Amazon, you can also use Amazon FBA for products sold elsewhere. You can use Amazon FBA to fulfill orders if you have a dedicated website for your product, for example. Multi-Channel Fulfillment is what Amazon calls it. There is a difference between Amazon FBA fees for MCF and FBA fees for other products.
Your website may offer multiple shipping options for the products you sell. Amazon understands this. Fulfillment by Amazon makes use of three different types of MCF fees based on the shipping options: Standard (3-5 days), Expedited (2-days), and Priority (next day).
In the following tables, prices are listed for two categories of product sizes – Standard and Oversize.
Amazon FBA Monthly Storage Fee
In the month following the month for which the fee is applicable, Amazon charges a monthly inventory storage fee. Check the February Payments report transactions from February 7-15 to see your inventory storage fee for January.
Additionally, the fee varies according to the size of the product and the time of year. For storage, standard-sized items require complex and expensive shelving and bins, despite their smaller size.
There is a cubic foot fee. Consequently, based on volume, storage fees for standard-size products may be lower than those for oversize products.
Don’t Forget!
You must be aware of Amazon’s seller fees when you sell your products on Amazon. Referral fees are levied on every product sold on Amazon. Referral fees are imposed by Amazon on products sold on the company’s platform, which is 15 percent of the selling price (try this FBA calculator for accurate storage fees).
On the official website are detailed referral fees for each product category. This seller fee does not apply, however, if your products are sold through external channels.
Before you begin, consider these other charges
The following charges are in addition to those mentioned above, if you decide to choose Fulfillment by Amazon. It’s important for you to be aware of these charges, or else you may lose out on profits!
- Monthly Selling Fees –
- For choosing Amazon’s platform, you must pay a monthly fee. Selling your products on Amazon is similar to paying rent.
- Fees for Referrals and Variable Closings – You pay Amazon a commission on each product you sell on its site.
- Fees for returns – While many products are exempt from returns processing fees, you need to watch out for those categories that do not qualify. Consequently, you may be charged a fee to return items to Amazon. Furthermore, if you need to repackage the product, you may also be charged for that.
- Fees for Removing Stock – You will be charged a fee for removing unsold stock from Amazon’s inventory. Amazon also charges this fee for returning your products to you.
- Inventory Placement Service – FBA Inventory Placement Service allows you to send all of your eligible inventory to a single warehouse rather than dividing shipments into separate shipments going to different warehouses. There is a fee associated with this service.
- Amazon FBA Export Fees – You can also export your products from Fulfillment by Amazon to multiple countries, assuming your country offers this service. Hence, you may have to pay an export fee if you are selling your products through a channel. The Amazon Seller Central dashboard provides more information on this.
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Conclusion: Know In Detail About Amazon FBA Fees 2023
A Fulfillment by Amazon program can greatly boost your sales and increase your market share. In many cases, the fulfillment rates are more competitive than going through third-party logistics companies.
FBA is an excellent choice whether you sell on Amazon or via another channel. It is important to recheck your calculations and run them carefully to prevent your profits from being impacted. Additionally, Amazon’s representatives can help you better understand these prices if you contact them.
