In 2020, Amazon generated 80.46 billion U.S. dollars in third-party seller service revenues. – Statista With numbers like this, it’s easy to understand how popular Amazon FBA has become amidst the global rush to online selling.
In previous years starting an Amazon business could be accomplished through a minimal amount of capital. Nowadays, startups on Amazon will have a better chance at success with a capital cushion to support them. Navigating competition on the platform and establishing brand awareness are two considerations that must be made in 2021’s online climate.
Cash flow is everything to an Amazon business, and so are fees and Amazon FBA reimbursements.
Sellers rely on Amazon to navigate payments and reimbursements effectively. But, considering the sheer amount of transactions the online giant sees, it’s pretty reasonable to expect that mistakes will happen.
If sellers aren’t correctly tracking these errors and omissions, they can be out hefty fees without any chance of reimbursement.
Let’s dive into some of the reimbursements you could be sitting on as an Amazon seller. We’ll help you understand how GETIDA’s reimbursement solution software can save you thousands of dollars as you scale your business.
Table of Contents
A Brief Background on Amazon FBA
In addition to the robust shipping FBA offers, Amazon provides customer care, manages the payment, and processes returns. Through the FBA model, an Amazon seller can manufacture products and build a brand while not handling inventory or dealing with customers.
Amazon FBA, or Fulfillment By Amazon, is a sales option through the Amazon marketplace. The beauty of Amazon FBA is that Amazon is responsible to prep, pack, and ship products on a seller’s behalf for a fee.
What Are Amazon FBA Fees?
Amazon FBA fees are what Amazon charges each seller for the fulfillment and storage service as outlined above. Fees are determined by the size and weight of products and are deducted from a seller’s earnings. Here is an outline of updated FBA fees as of June 2021.
Amazon FBA Fulfillment Fees
FBA fulfillment fees cover Amazon’s costs for picking, packing, shipping, and handling customer service for your orders. These fees vary based on the size and weight of your products.
Here’s an overview of how Amazon calculates FBA fulfillment fees:
- Size Tiers: Products are categorized into size tiers like small standard, large standard, large bulky, and extra-large. Each tier has specific dimension thresholds.
- Weight: Fees are based on weight bands within each size tier. For large and extra-large items, fees are based on dimensional weight if it’s greater than the actual weight.
- Seasonal Differences: FBA fees are higher during peak seasons like the winter holidays.
- Category Differences: Extra fulfillment fees apply for categories like apparel and dangerous goods.
Fulfillment fees start at around $3 per order for smaller, lighter items and range up to $200+ for extra-large products.
With so many variables that go into determining FBA fulfillment fees, discrepancies can sometimes happen when Amazon charges these fees, occasionally resulting in FBA fee overcharges.
Getida can help you get reimbursed for any overcharged fees. We also cover other common inventory discrepancies like unaccounted inventory and damaged inbound shipments.
Sign up now, and our award-winning dashboard technology will analyze your seller account to show you how much reimbursement you may be eligible for today.
What Are Storage Fees?
In addition to FBA Fees, Amazon charges sellers storage fees. Storage fees are fees to maintain the cost of storing inventory and charged monthly or long-term.
Types of Amazon FBA Fees
There are various fees associated with selling on Amazon’s Fulfillment by Amazon (FBA) service beyond the standard fulfillment fees. You need to understand these additional costs:
Amazon Referral Fees
Amazon charges referral fees on each product sale, a percentage of the total sales price paid to Amazon for facilitating the sale.
Referral fee percentages vary widely based on the product category:
- Most commonly, 15% for categories like Home, Kitchen, Beauty, Office Supplies, and more
- As low as 8% for categories like Groceries, Consumer Electronics, and Baby
- As high as 45% for Amazon Device Accessories
- Fine Art has tiered referral fees, starting at 20% and going up to 5%, depending on price points.
There are also category-specific minimum referral fees, usually $0.30 per item, that apply instead if they are greater than the percentage fee. Media categories like Books, DVDs, Music, and Software have no minimum fees.
As of January 2024, Amazon reduced referral fees for apparel products priced under $20:
- 5% for apparel products priced under $15 (previously 17%)
- 10% for products priced $15-$20 (previously 17%)
This change makes selling lower-priced apparel items more affordable. You should closely consult Amazon’s fee schedule and consider category costs when evaluating new products.
Amazon FBA Storage Fees
Amazon charges FBA storage fees to store your inventory in their fulfillment centers over time. There are two main types:
Monthly Storage Fees
Applicable for inventory that is still in FCs at calendar month’s end.
From January to September, these are $0.78 per cubic foot for standard-size products and $0.56 for large bulky/extra-large items.
In peak months, October to December, the fees rise to $2.40 and $1.40 per cubic foot, respectively.
Long-Term/Aged Inventory Storage Fees
Higher fees are applied to inventory stored 181 days or longer to discourage overstocking.
These range from $0.50 per cubic foot for 181-270 days up to $6.90 per cubic foot for anything over 365 days.
As of February 2024, aged inventory fees for 271-300 days rose from $3.80 per cubic foot to $5.45.
Amazon FBA Export Fees
If you sell internationally through FBA, extra fees apply for Amazon’s global export services. It covers costs like customs, duties, taxes, customs brokerage, and more associated with global selling.
FBA Removal or Disposal Fees
Here is a detailed breakdown of the updated FBA removal and disposal order fee per unit as per the various size tiers::
Small Standard
- < 0.5 lb: $1.04
- 0.5-1 lb: $1.53
- 1-2 lb: $2.27
- > 2 lb: $2.89 + $1.06 per lb over 2 lb
Large Standard
- < 2 lb: $2.89
- 2-3 lb: $3.92
- 3-20 lb: $4.95 + $1.06 per lb over 2 lb
Large Bulky
- 0-1 lb: $3.12
- 1-2 lb: $4.30
- 2-4 lb: $6.36
- 4-10 lb: $10.04
- > 10 lb: $14.32 + $1.06 per lb over 10 lb
Extra Large
- 0-50 lb: $26.33 + $0.38 per lb
- 50-70 lb: $40.12 + $0.75 per lb
- 70-150 lb: $54.81 + $0.75 per lb
- > 150 lb: $194.95 + $0.19 per lb
Amazon FBA Prep Service Fees
If you use Amazon’s FBA Prep Service for labeling and prepping items before shipment, you’ll pay the following fee per unit based on the type of service:
- Bubble Wrap (Standard): $1.04 per unit
- Bubble Wrap (Oversize): $1.60 per unit
- Bagging (Standard): $0.70 per bag
- Bagging (Oversize): $1.40 per bag
- Opaque Bagging (Adult): $1.00 per standard unit
- Opaque Bagging (Adult Oversize): $2.00 per oversize unit
- Labeling: $0.55 per item
According to Amazon’s official prep service fee schedule updated:
Standard Size Products
- Fragile/glass items are charged $1.59 per unit, including bubble wrap and labeling.
- Liquids are charged $0.70 for bagging plus an optional $0.55 labeling per unit.
- Apparel and fabrics are charged $0.70 for bagging plus an optional $0.55 labeling per unit.
- Baby products are charged $0.70 for bagging plus an optional $0.55 labeling per unit.
Oversized Products
- Fragile/glass oversize are charged $2.15 per unit.
- Liquids oversized are charged $1.40 for bagging plus an optional $0.55 labeling per unit.
- Apparel and oversized fabrics are charged $1.40 for bagging plus an optional $0.55 labeling per unit.
- Baby products oversized are charged $1.40 for bagging plus an optional $0.55 labeling per unit.
So, FBA prep service fees range from $0.70 to $2.15+ per unit, depending on the item specifics, size, and required prep.
FBA Label Service Fees
According to Amazon’s FBA Label Service details:
- The FBA Label Service applies barcode labels for $0.55 per item.
- Products must have a single scannable UPC, EAN, JAN, ISBN, or ASIN to qualify.
- This does not apply to restricted, prohibited, or high-value items.
- You can opt-out and apply your own labels during shipment creation.
- Label service identified by FBA-PREP on shipment labels and docs.
- The fee is charged per item labeled, regardless of label type.
Amazon FBA Return Fees
There are two main types of fees you pay when customers return FBA items:
Return Processing Fee
This is a fee Amazon charges per item returned. It covers Amazon’s cost of receiving and processing returns.
The fee varies based on product size tier and shipping weight:
- Small standard items:
- 2 oz or less: $1.78
- 2-4 oz: $1.84
- 4-6 oz: $1.90
- etc.
- Large standard items:
- 4 oz or less: $2.36
- 4-8 oz: $2.70
- 8-12 oz: $3.05
- etc.
- Large bulky items:
- 0-50 lbs: $6.74 + $0.32 per lb over 1 lb
- E.g., 7-8 lb item: $8.98 ($6.74 + $0.32 x 2)
- Extra large items:
- 0-50 lbs: $26.33 + $0.38 per lb
- 50-70 lbs: $40.12 + $0.75 per lb
- Etc.
Refund Admin Fee
The refund admin fee is always 20% of the original referral fee paid, up to a max of $5.
FBA return fees can add up, especially for heavier items returned. You should check product return rates before selling them on Amazon FBA.
Let’s say you sold a $20 t-shirt and paid a 15% referral fee of $3 on that sale. If the customer returns the shirt, you will pay:
- Return processing fee: Let’s say this is $1 per return
- Refund admin fee: This would be 20% of the $3 referral fee, so $0.60
So, in total, you would pay $1.60 in return fees if that t-shirt was returned. That’s a lot!
Starting June 2024, non-apparel items will only incur return processing fees if the return rate exceeds a category threshold. Apparel and shoes are charged for all returns.
Amazon Inbounding and Placement Fees
In March 2024, Amazon started charging sellers new ‘inbound placement fees’ to distribute inventory across fulfillment centers.
Here are more details:
- Fees cover Amazon’s costs to receive inventory and spread it across warehouses for faster delivery.
- Rates vary based on:
- Item size tier (small standard, large standard, large bulky)
- Weight band
- Number of inbound locations (single, multiple)
- Sending to a single fulfillment center incurs the highest fees. Here are the different shipping rates:
- Size: Small Standard
- Weight: ≤ 16 oz
- Single Location: $0.21 – $0.30
- Multiple Locations: Discounted/No Fee
- Size: Large Standard
- Weight: ≤ 20 lb
- Single Location: $0.23 – $0.68
- Multiple Locations: Discounted/No Fee
- Size: Large Bulky
- Weight: ≤ 50 lb
- Single Location: $2.16 – $6.00
- Multiple Locations: Discounted/No Fee
- Size: Small Standard
- Sending to multiple centers reduces or eliminates fees:
- 2-3 centers: Partial shipment splits, discounted fees
- 4+ centers: Amazon-optimized, no fee
- If you’re a new seller, you’ll get $400 in fee credits for first shipments in 90 days
Amazon FBA Monthly Fees
Storing inventory long-term in Amazon warehouses incurs monthly storage fees:
- January-September: $0.78 per cubic foot for standard-size products
- October-December: $2.40 per cubic foot
Higher storage utilization surcharges also apply if you maintain high inventory levels.
In addition to storage fees, you may have to pay extra monthly fees if you have a very high volume of listings. Amazon charges a flat fee of $0.005 per eligible ASIN for sellers with over 100,000 products listed. This is called the high-volume listing fee.
These high-volume listing fees are paid alongside monthly FBA storage fees. The fees are deducted directly from your Amazon account balances or charged to your credit card if account funds are insufficient.
However, this only affects you if you’re a major seller with massive catalogs. Unless you have more than 100,000 ASINs, you likely won’t have to worry about high-volume listing fees.
How to Calculate Amazon FBA Seller Fees
Figuring out your total FBA costs takes some legwork, but carefully estimating your fees is crucial to maximizing profits.
Follow these steps:
1. Identify Your Products’ Size Tiers
Amazon divides products into different size tiers based on dimensions and weight:
- Small standard: Products under 0.75 cubic feet
- Large standard: Up to 1.5 cubic feet and 20 lb
- Large bulky: Up to 165 cubic feet and 150 lb
- Special oversize: Items requiring special handling
First, measure each product, including packaging, to determine which size tier it falls into. Double-check both the dimensional size and weight limits. This is key for calculating fulfillment fees.
2. Determine the Per-Unit Weight
You’ll need to find the unit weight for each item to match it to the appropriate fee table.
- For small standard products, use the actual weight.
- For large and special oversize items, also calculate the dimensional weight. Dimensional weight accounts for both size and weight. Use whichever is greater.
Be sure to weigh products and packaging together to determine the total shipping weight per unit.
3. Lookup Corresponding FBA Fees
Use Amazon’s detailed FBA fee schedule or an online FBA fee calculator to identify fulfillment fees based on:
- Product size tier
- Per unit weight
- Seasonal factors
- Special categories like apparel
Ensure to note both the pick and pack fee and the weight handling fee.
4. Estimate Monthly Volume
Think about your expected sales volume per month for each product. How many units will you sell on average?
Volume estimates are important for figuring monthly storage fees. It also gives you your total fee burden.
5. Calculate Additional Fees
Account for other fees beyond fulfillment costs like:
- Monthly storage fees based on cubic foot volume and season
- Removal order fees if disposing of inventory
- Labeling and prep service fees
- Peak season volume increases costs
6. Factor in Referral Fees
Finally, estimate your overall referral fee percentage on total sales. This varies by product category – commonly 15%.
Apply the referral fee to your total sales estimate to get complete fees.
Total FBA Fee Example
Let’s say you sell 100 units per month of a large standard shoe product that weighs 2 pounds per unit.
- Fulfillment fees are $4 per order based on size, tier, and weight. With 100 orders, that’s $400.
- You store 500 cubic feet of inventory, costing $390 in monthly storage fees.
- Total sales are $5,000 at a 15% referral fee percentage, so $750 in referral fees.
Estimated Total Monthly FBA Fees = $400 fulfillment + $390 storage + $750 referral = $1,540
Carefully calculating your potential FBA costs this way is crucial to maximizing your profit margins when selling on Amazon. However, even the most diligent sellers can experience FBA fee overcharges or inventory discrepancies that lead to lost profits.
That’s where Getida comes in. Our award-winning dashboard technology automatically analyzes your FBA transactions to uncover any eligible reimbursements you may be missing. We also take on the entire claims process so you can focus on growing your business.
Sign up with Getida today to see how much you could recover from overlooked FBA refunds. Our dedicated specialists will work to secure every dollar of reimbursement you deserve.
Amazon Reimbursements
An Amazon business can lose money in areas of reimbursements if they are not well informed or not properly managing reimbursements as a whole.
Reimbursements are monies owed to Amazon sellers for errors, omissions, and damages on Amazon’s behalf.
Amazon FBA Audits
Below you will find the complete list of Amazon FBA reimbursements your account may qualify for. At GETIDA, we audit each section of an account to maximize reimbursements, leaving no stone unturned, or in this case, no dollar unaccounted for.
The benefits of GETIDA are many, but here is a brief overview:
- Maximize Returns
- Alleviate Cash Flow Problems
- Free up a Seller’s Time & Productivity
- Backdate to 18 months of History
- Monitor the Status of Claims
- Fast & Convenient
If you’ve ever attempted to file reimbursements for your account, or if you’re a large agency managing massive accounts, you know the pain of the inner workings of Amazon.
The process can be slow and tedious, and you or your team can make mistakes. These errors, unknowingly, can put your account in harm’s way, as Amazon takes reimbursement claims seriously. It’s best to leave reimbursement filing to our experts.
Here are the audit types you can expect from GETIDA:
Return Audits
- Returns Reimbursement – A reimbursement was never paid out.
- Returned Not Refunded after 45 Days – The customer received a refund, but they never returned the item.
- Return Overcharge – The customer was refunded more than they were initially charged.
- The wrong Item Returned – A customer sent the wrong item back, and Amazon accepted it.
- Damaged Returns – The product was returned damaged.
- Return After 60 Days – A customer was granted an exception after the typical return window.
Warehouse Audit
- Receiving Discrepancy – Inventory was improperly received or miscounted from inbound shipments in the past nine months.
- Lost – Inventory was lost in the warehouse.
- Damaged – Inventory was damaged in the warehouse.
- Destroyed – Inventory was destroyed without the seller’s permission.
Accounting Audit
- Credited more than Charged – The account was billed more than the initial order amount.
- Seller Fee – The seller was wrongfully charged for weight or dimensions of inventory.
- Unfair Reimbursement – The reimbursement the seller received was not correlative to lost value.
- Chargeback not Refunded – A consumer received a chargeback, but the seller was not reimbursed.
- Reimbursement Error – Reimbursement was issued, but the seller never received the money.
- Adjusting Balance Sheet – Results of our auditing data and financial recovery services are applied to the balance sheet and profit and loss statement adjustments for maximum accuracy.
Available Inventory Level Audit
- Inventory Replacement – A returned item is said to be back in your inventory but is not.
- Independent Inventory Analysis – GETIDA monitors inventory levels independently to ensure that no inventory goes missing.
- Missing Inventory – The seller was reimbursed for less inventory than what was supposed to be reimbursed.
Shipping Audit
- Inbound Shipping Damaged by Carrier – While shipping FBA, the carrier damaged inbound inventory.
- Damaged Return by Carrier – Inventory was returned by the customer and damaged during the return by the carrier.
- Removal Order Damaged or Lost – The removal order was damaged or lost in transit.
- Multi-Channel – Items sold on different marketplaces were said to be delivered, yet the consumer never received the product.
Seller-Fulfilled Audit
- Customer Returned Damaged Item – Customer sent back an item damaged by the customer or by the carrier.
- Customer Issued Return / Not Received – The customer never sent back a granted return item.
How to Reduce Amazon FBA Fees
There are a few tips you can use to minimize FBA costs:
Optimize Your Inventory Levels
Maintaining the right inventory levels is crucial to avoid storage fees. Regularly review your sales data and remove slow-moving or unsold items to minimize the space your inventory occupies in Amazon’s warehouses.
Enroll in Ships in Product Packaging
The SIPP program allows you to ship your products to customers in your branded packaging, qualifying you for a fulfillment fee discount ranging from $0.04 to $1.32 per unit.
Utilize the Seller-Fulfilled Prime (SFP) Program
You can avoid the fulfillment fees associated with the FBA program by taking on the responsibility of storing, packing, and shipping your own products. However, you must meet Amazon’s demanding delivery requirements to qualify for the Prime badge.
Minimize Returns and Refunds
High return rates can lead to additional refund administration fees. Ensure that your product listings are accurate, and consider offering excellent customer service to reduce the likelihood of returns.
Use FBA Fee Preview Tools
Amazon regularly updates its FBA fee structure, so staying up-to-date on any changes that may impact your business is essential. Regularly check Amazon’s seller resources and announcements to adapt your strategies accordingly.
Summary
When a seller agrees to Amazon’s terms of services, they are bound by these terms; similarly, Amazon is bound by these terms. If a seller experiences any one of these issues listed above, they may qualify for reimbursement.
It seems simple, right? Not so fast.
Unfortunately, sellers are task saturated and aren’t always aware of what reimbursements they qualify for, nor do they understand how to file for reimbursements appropriately.
Notwithstanding a lack of insight, sellers with large accounts and multiple SKUs can find themselves lost in the shuffle of inventory and miss out on opportunities to get their money back.
Conclusion
Amazon offers a unique opportunity for those just starting or experienced veterans. Both types of sellers need to be responsive to their finances and businesses’ inner workings. Understanding Amazon FBA fees and reimbursements are no exception.
Frequently Asked Questions
Here are some frequently asked questions (FAQs) surrounding this topic:
Are There Any Ways to Avoid Unnecessary FBA Fees?
Yes, you can minimize fees by efficiently shipping inventory, enrolling in discount programs, and managing stock levels. Amazon’s own revenue calculators can also help anticipate costs.
You can also opt for an FBA audit with Getida to uncover reimbursements for overcharged FBA fees and other inventory discrepancies. This will help you uncover a new source of funds while minimizing costs. Sign up to get started.
Can FBA Fees Vary by Product Category?
Yes, Amazon’s referral fees can vary significantly by product category, ranging from as low as 6% to as high as 45%. The referral fee for most categories is around 15%, but checking the specific rate for your product’s category is essential.
Are There Any Additional Fees for Special Handling Items?
Yes, Amazon charges higher fulfillment fees for certain product categories that require special handling, such as dangerous goods, apparel, and media items like books and DVDs.
These specialized fees are designed to cover the additional costs associated with storing, packing, and shipping these types of products through FBA Prep Services.
How Can Sellers Calculate Their Total FBA Costs?
To calculate your total FBA costs, you’ll need to consider the following:
- Referral fees
- Closing fees (for media products)
- Refund administration fees
- Fulfillment fees based on product size and weight
- Monthly storage fees
- Inbound placement service fees
- Any other applicable fees, such as high-volume listing fees or disposal fees
By adding up all these costs, you can accurately determine your total FBA expenses and plan your pricing and profit margins accordingly.
Do FBA Fees Include Shipping Costs to Customers?
Yes, FBA fulfillment fees incorporate picking, packing, shipping, and handling customer shipments. You don’t pay separate shipping costs. However, you’ll still need to account for any shipping costs of sending your inventory to Amazon’s fulfillment centers.
How Often Do Amazon FBA Fees Change?
Amazon regularly updates its FBA fee structure, typically on an annual basis. Major fee changes are usually announced several months in advance, allowing you to adjust your strategies and pricing accordingly.
What Is the Difference Between Monthly and Long-Term Storage Fees?
Monthly storage fees are based on the cubic feet of space your inventory occupies in Amazon’s warehouses and are charged every month.
If your products have been in Amazon’s fulfillment centers for more than 6 months, you’ll be charged additional long-term storage fees. These higher fees are intended to encourage you to remove slow-moving or unsold inventory.
Offer
Get $400 in Free FBA reimbursements with GETIDA. Claim Offer 👉 here.
Sources:
Figure 1 Amazon.com
Statista – Amazon generated 80.46 billion U.S. dollars in third-party seller service revenues.
