Amazon FBA Fees: Full Cost, Explanation And Guide [2021]


Amazon FBA Fees

Ever wondered about the row of activities that go an in an Amazon warehouse when you place your order? No! But, if you are thinking of setting up your online selling business on Amazon, you will have to start considering the complexities of these steps, how they work, what they cost and such other details.

As a seller on Amazon, that provides the best international online shopping cart, you would like to expand your profits and grow to higher realms. The goals would be big and you dream of achieving higher feats and lucrative profit. Here is where a lot of numbers and calculation needs to be at your fingertip. Otherwise, you might end up giving away more than you are earning, ultimately pushing you to bankruptcy.

Calculating profit on a sale of products on Amazon can be not quite as simple as solving simple numerical problems. You need to consider a host of other factors and fees that gets deducted before you take home the money. It is not possible to remember the minute details where your money goes. 

The FBA tool comes in handy for calculating the exact profit. It takes into consideration a wide array of factors and calculates the exact profit you will earn. Do not get lost amidst the data and charges, for the FBA calculator does it all. It gives precise revenue calculations and decreases the risk of losing out money.

Understand where your money is going. Before you launch your product, keep all these overhead expenses within the ken of your knowledge. The main costs include-

  • Upfront costs (samples, cost of goods, shipping, photography)
  • Variable costs (FBA fees, storage fees, returns etc.)
  • Marketing costs (promotions and pay per click)

FBA costs can go up to 15% of the price of the item and also includes $3 on the shipment charge. FBA Calculator easily calculates all the fees you will have to pay to Amazon for taking the service.

Service Offered by Amazon FBA Fees

The FBA Calculator takes all these into account while calculating the fees-

Product Details

The cost of storage, picking, packing and shipping varies with the size of the product you choose to sell.

Product Cost

The unit cost of each product depends on the supplier you are getting it from. Again, if you buy in bulk, the cost gets reduced. Thus, the price of buying the product plays a vital role in calculation of FBA fees.

Shipping Cost

You need to calculate the shipping and freight charges for bringing the product from the supplier to the warehouse and to the customers. This also depends on the dimensions of the product.

Packaging

The FBA Calculator also takes into account the charges of adhesives, stickers and other packaging costs for shipping your product with safety.

Referral Bonus

You have to pay the e-commerce service of Amazon a referral fee, which might go up to about 15% of the cost of the product. It might make you cringe, but this is a small price to pay for selling on a platform teemed with customers from across the globe.

Monthly Stock

When you are selling any product, the shelves of the Amazon warehouse are occupied and reserved for you. The space will not be given to any other seller. Thus, you have to pay a rental charge for the storage space of your product.

Manually calculating all the data would be cumbersome. FBA Calculator relieves you of all the trouble.

Amazon FBA fees include all the services that lets you sit at ease and concentrate more on business improvement. Amazon FBA takes care of pick and pack, delivery charges, shipment and storage in the warehouse. 

Whether you are a newbie, or a sharpened seller, you might not have the time to handle the transportation of all these goods or provide the necessary customer support. It is no wonder that such entrepreneurs benefit much from this scheme. All types of business can benefit from this service-

  • Land Owners: Those who have launched a new, useful product can expand quickly through Amazon platform and reach a worldwide audience.
  • Online Stores: Why worry and fret over means of marketing when Amazon offers a platform of international customers?
  • Entrepreneurs: Stay tuned with all the rapid changes in the e-commerce platform using FBA service.

Check all the service charges. Calculate your profit. Then launch your product on Amazon and gain easy returns.

Amazon Referral Fees

Amazon charges you this fee every time you sell a product. A small price that you pay for getting the international customer base. It is a percentage of the total sales price and is usually fixed at 15%, although this may vary. It can be as low as 6% on some items, however it can go up to 45% for Amazon accessories.

If you are a new seller, choose the product you would sell judiciously to ensure minimum percentage charged as referral fee.

Amazon Fulfilment Fees

FBA can prove to be your best logistics partner. Just pay the Fulfilment fee and all the details of storage, picking, packing, shipping, delivery and customer support will be taken care of by Amazon. 

If you are a budding entrepreneur who like to focus more on optimisation of business strategies to get an edge over the competitors, the service provided by FBA is indispensable. It eases your work and provides the entire logistics support to you, relieving you of the entire hassle of building trust with the customer. The product will reach the customers’ hand intact and well protected.

Monthly Amazon FBA fees

When you become a regular seller on Amazon, you have to pay a monthly subscription fee. There are Professional and Individual plans depending on the size and expansion of your business. There is a small amount you would have to pay per unit item sold if you are a small business owner.  

Amazon FBA Storage Fees

Gain the trust of your customers and Amazon. In the world of service-based consumer market, if a customer finds the shelf devoid of product A, they will go for product B which is of the same type. Thus, to dominate the market, getting out of stock is a major setback. 

Avoid all the embargo using the storage service of Amazon. If you are an entrepreneur who sells goods that are quickly out of stock, this service is of immense help. Pay the storage fees, based on the item size and month. You can thus decide the number of items you will require in the future ina stipulated time.

How do I Calculate FBA Fees?

Follow these steps to get a quick estimate of the FBA fees-

  1. Calculate the Referral Fees, which depends on the product category you are selling
  2. Check the closing fee, that is decided upon the unit price
  3. Calculate the fulfilment fees, based on the dimensions (size and weight) of your product. This includes charges of picking, packing, storage and shipment.
  4. Calculate the total fees by adding the above fees and an 18% GST.

Perks of Using Fulfilment by Amazon

Make money, grow fast and win your customers’ hearts with FBA service. 

Increase your online sales by improving your products’ visibility before a wider audience. Get a Prime logo on your product and boost sales as a majority of the customers want superfast delivery. Get trusted customer service and delivery supports from Amazon without bothering about the details. 

Send your products to Amazon inventory and get all the services done from picking, packing, shipping and storage. Your FBA products are available for a one-day free delivery. So, you can connect to a huge base of loyal customers. Compete for the Buy Box and get the Add to Cart option listed. 

Listed below are the major benefits and perks of using Fulfilment by Amazon (FBA):

  • Focus on your business: the storage and delivery are taken of by Amazon. Focus on strategizing your business growth.
  • Access to Amazon Prime: Premium delivery options enhances customer shopping experience and increases customer demand and loyalty. Prime products are available for a free one-day delivery.
  • Pay as you go: Pay only for the services you use. There is no need to add subscription fee or additional unnecessary fee.
  • Gain Trust: Amazon’s world class packaging, shipping and excellent customer service is highly appreciated. Customers rely on this efficiency and get back to purchasing from you.
  • Hassle free: as your business expands, you need not worry about the logistics and delivery. Amazon does it for you.
  • Get a base of loyal customers: Customers would keep coming back to you as FBA service builds trust with its excellent customer support.

FBA Calculator Tools

There are numerous software services that offers the FBA calculator service. Listed below are some of the most effective ones-

IO Scout 

With Amazon’s FBA calculator that comes as a free tool with IO Scout, it is possible to estimate the fees, profit and margin instantly. There is no need to hassle between the Excel sheet and amazon website time and again. Get all these questions answered with FBA calculator:

How much fees am I going to pay to Amazon? 

FBA Calculator enlists in detail the amount you need to pay Amazon for storing, packaging and selling your product. This includes Amazon Referral Fee, Variable Closing Fee, Monthly Storage Fee, Fulfilment Fee along with considerations of product choice, category, dimensions, etc.

What profit should I expect?

This is the question that concerns much of our ado. FBA calculator takes into account each dime of expense from packaging, shipping and other fees and then calculates the net profit that would be deposited in your pocket.

How profitable is my product?

How much of return can you expect? Will your items sell 10 times or 1000 times, manifolding your profit margin? The FBA calculator returns the revenue margin as your profit to give you a clear idea about the finances.

How much money should I spend on marketing campaign?

Deciding upon the area of other expenses such as marketing is crucial. FBA calculator gives you a detailed analysis of profit and expenditure so that you can decide how much you can invest on marketing campaigns.

Checkout My IO Scout Review

Jungle Scout

Get real time data with a Chrome Extension on your Amazon website. Calculate the entire expense structure including referral fee, packing fee, service, storage and weight handling fee. Also find the average monthly price of the product you are selling. 

There is a whole range of meaningful insights on Jungle Scout that a beginner or even an experienced seller might be interested in. These help in finding the most profitable product to sell on Amazon. Jungle Scout also helps the sellers by providing them with a detailed list of reliable suppliers of the product they are interested in. The seller may now choose the supplier who sells at a minimum cost to maximize the profit.

Focus on saving cost and boosting profit. Get data of your sales and profit on Amazon. Get the full financial picture with important metrics like revenue, hidden fees, expenses, and more. Also measure the performance of your PPC campaigns, using the Sales Analytics.

Calculate the Amazon inventory needs. Predict accurately how much you should order to keep your stock full and avoid stockouts with Inventory Management feature.

Checkout My Jungle Scout Review

Amaze Owl

Amaze Owl is best suited for beginners and can be run on Windows and MAC. This provides the entire product listing, allows you to conduct search on the product database, view competitors’ data and sales estimates, profit, and more. 

Get all the accurate data that you require to understand and differentiate the Amazon market. The products are reviewed with a simple 5-star gradation and you can get an idea about their demand, profit, potential and competition. Get insights of competitive strategy and analyse pricing trends.

Track your products on Chrome Extension and validate your product ideas. Get to know its market value, demand, historical price and sales volume, and ideate whether or not to invest your money on the product. The competition is high, and you should know which product will perform well and reap profit before you launch your product based on intuition.

With all the features of product tracking and validation of ideas, Amaze Owl helps you create a financial strategy for leveraging your business. This is a platform that is supported by FBA. The success of any business of online selling on Amazon depends upon the FBA service for the smooth workflow and logistics.

Checkout My Amaze Owl Review

How do I Sell on Amazon?

To sell on Amazon is quite easy. All the required tools and services are provided by Amazon. Your fees and profit can be calculated with FBA fees calculator service. Just follow the steps below-

1. Register your seller account

The only prerequisite for becoming a seller on Amazon is a seller account. Open a bank account and provide the information of GST and PAN. You will get access to the Seller Central account, the one stop portal for selling on Amazon.

2. Upload your listing

Once you have registered a new seller account, you need to upload the listings. Search for the most profitable products and upload the listings using the easy tools of Seller Central. You can also hire professionals from the Service Provider Network to help you make informed decisions.

3. Customers see and buy your products

Reach out to your customers. Optimise your listings and research keywords to increase the Amazon product rank so that they appear on the top of search queries. If you use Fulfilment by Amazon, you would broaden the spectrum of customers. Your products would be visible to Amazon Prime members as well. You can also advertise your products with Sponsored Products and get target customers.

4. Deliver your products to the customer

Here comes the most important part- the delivery. In the fast-moving world, consumers and customers are shifting towards JIT (Just-In-Time) delivery. The reliable and quick delivery of products adds customer service as a value differential that gives an edge to your product. 

Amazon FBA takes care of the entire chain of logistics from sourcing to the company warehouse to delivery to the customer, including the shipping, packaging, picking and labelling. 

5. Receive your payment

All the payment for your sales, along with the fees provided on Cash on Delivery, is deposited in your bank account every 7 days. You can view your deposited balance along with tips to expand your business. Use and follow them to grow as a businessman in the Seller Central Account.

How Does the FBA Work?

FBA helps sellers as they open up the products before Prime Amazon members-

  • You send the product to Amazon Fulfilment Centre or arrange for a pickup
  • Amazon stores your products
  • Customers order for the product with fast, free delivery service
  • The picking, packaging, shipping and delivery is done by Amazon efficiently
  • Amazon provides customer support on products you sell, ensuring a great experience.

Final Comments

The world’s largest online selling platform opens up new opportunities for sellers on Amazon. A number of supportive tools can upgrade your experience as a seller. If you want high end gains, be sure to access the FBA service. But again, use the calculator to check the profitability.

Manual research is a good way of controlling your business. But it is hectic and time-consuming. Resort to online tools to get your work done in a flicker and yet, skyrocket your profits.

FAQ

What is the monthly fee on Amazon?

Amazon charges a monthly subscription fee of $39.99 in the Professional Plan for those who have established online selling business. For Individual Plan, you have to pay for $0.99 for each item sold. There is no monthly fee.

Who will handle customer service?

If you are using FBA service, keep your mind free from the hassle of answering to customers. Amazon would deal with that and provide loyal customer support.

How will Amazon Prime impact me as a seller?

Once you start using the FBA service, your product will come with a Prime logo. Amazon Prime members get free and fast delivery and deals are expressed to them before other regular customers. This increases buying experience and customer satisfaction, which keeps them returning to Amazon, thus increasing the demand of your product.

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