Amazon FBA and FBM Fees

As an Amazon seller, you have two main options to fulfill your orders: Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM). While both options have their own benefits and drawbacks, it's essential to understand the fees associated with each to make an informed decision. 

In this post, we'll discuss the fees associated with FBA and FBM, so you can decide which option is the best fit for your business. We'll also explore recent changes to FBA fees, for you to stay up-to-date on the costs of selling on Amazon.

What Are Amazon FBA and FBM Fees?

The fees Amazon sellers pay depend on the services they buy from Amazon. The basic difference between Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM) sellers is that FBA sellers use Amazon fulfillment services — order picking, packing, storing, shipping, and customer services, while FBM sellers handle all these on their own or use third-party service providers.

That determines the types of fees FBA and FBM sellers pay to Amazon. Selling fees are paid to Amazon by all sellers. Logistics fees are also paid by all types of sellers, but FBA sellers pay them to Amazon because they use Amazon’s fulfillment, while FBM sellers pay for the logistics to third-party service providers (3PL) or shipping carriers.

Amazon FBA vs FBM

Fees Paid by All Amazon Sellers 

All Amazon sellers pay two types of fees to Amazon: selling plan fees (monthly or per-unit fees for selling on the Amazon platform), and referral fees (fees per unit sold).

Below we will give you insights into all these types of fees explained, with the latest changes introduced by Amazon.

Related: How Does Amazon FBA Work? Is Amazon FBA worth it in 2024?

FBA vs FBM: Which is Better for Amazon Sellers?

Selling Plan Fees

Before you can begin selling your products on Amazon, you'll need to register an account and pay the associated fees. Amazon offers two types of selling plans to choose from: Individual and Professional. 

Individual plan

The Individual plan charges a fee of $0.99 per unit sold and is suitable for new sellers or those who sell products on Amazon occasionally. This plan is ideal if you plan on selling fewer than 40 units each month. 

Professional plan

The Professional plan costs $39.99 per month, regardless of the number of units sold. It's a cost-effective option for sellers who sell more than 40 units each month. Additionally, the Professional plan provides access to advanced features, such as Buy Box eligibility, various tools and programs, and extended sales analytics, to assist you in selling on Amazon.

Amazon selling plans

Referral Fees

Every Amazon seller pays a referral fee for each item sold. The referral fee is a percentage of the total sale price, which includes the product price, delivery costs, and gift wrapping fees, but excludes tax. 

The amount of the referral fee varies depending on the product category and price. Typically, referral fees range from 8% to 15%, although certain categories, such as Amazon Device Accessories, may have higher rates of up to 45%. In some categories, Amazon charges either the referral fee minimum (RFM) or the referral fee percentage (RFP), whichever the greater.

Referral fees are charged per unit when the order is shipped to the customer.

Effective January 15, 2024, referral fees for apparel products priced below $15 will be reduced from 17% to 5%, and for products priced between $15 and $20, the referral fees will decrease from 17% to 10%. Referral fee rates

Referral fees table 

Other selling on Amazon fees

Closing fees

Amazon charges closing fees for certain categories, such as Books, DVDs, Music, Software & Computer/Video Games, Video Game Consoles, and Video Game Accessories. If you sell in any of these categories, you'll be charged a closing fee of $1.80 per item sold. 

High-volume listing fee

If you list more than 1.5 million SKUs each month, Amazon charges a monthly high-volume listing fee of $0.001 per SKU. 

High-volume listing fee rates

Refund administration fee

If you issue a refund to a buyer who has already paid for an order, Amazon will refund the referral fee after deducting the refund administration fee, which is the lesser of $5.00 or 20% of the referral fee.

Refund administration fee rates

Rental book service fees

Sellers providing rental book services pay a fee for that, which is $5.00 for each textbook rental. The fee is deducted at the time of sale.

FBA Seller Fees 

In addition to selling plan and referral fees, FBA sellers pay Amazon fulfillment fees for picking, packing, storing, and shipping their products, and for the customer service provided by Amazon on their behalf. They also pay Amazon storage fees for storing inventory in Amazon’s warehouses. Additionally, they must pay a third-party carrier to ship their products to Amazon’s fulfillment centers.

Related: Amazon FBA Fees

Amazon FBA Fulfillment Fees 

These fees are charges for sellers who use Amazon's services to store inventory in fulfillment centers and deliver orders to customers. The services include picking and packing orders, shipping and handling, customer service, and product returns. FBA fees are charged per unit when the order is shipped to the customer.

Amazon FBA fees are determined based on the weight, dimension, and size tier of the product. The fees are different for apparel and non-apparel items. Additionally, dangerous goods (hazmat) products have higher fulfillment fees compared to other products.

Types of Amazon FBA fulfillment fees

• Order fulfillment fees;
• FBA inbound placement service fees;
• Low-inventory-level fees;
• Returns processing fees;
• Inbound defect fees.

Order fulfillment fees

Order fulfillment fees (formerly known as pick and pack fees) are charges incurred by sellers for picking and packing orders, shipping and handling, and customer service. These fees are charged per unit and differ for apparel and non-apparel items, depending on the size tier. The rate of the order fulfillment fees varies based on the product's size and other factors.

Standard-size non-apparel rates

Table 1. FBA fulfillment fees (excluding Apparel)

Non-standard-size non-apparel rates

Non-standard-size non-apparel rates

Standard-size apparel rates

Standard-size apparel rates

Non-standard-size apparel rates

Non-standard-size apparel rates

Standard-size dangerous goods rates

Table 7. Fulfillment fees for dangerous goods

Non-standard-size dangerous goods rates

Non-standard-size dangerous goods rates

Low-Price FBA

Items priced below $10 are subject to Low-Price FBA rates, which are $0.77 lower than the standard FBA rates. The delivery speed for these products is the same as that of standard FBA.

Low-Price FBA rates

LOW PRICE Table 1. FBA fulfillment fees (excluding apparel)

LOW PRICE Table 2. FBA fulfillment fees for apparel

LOW PRICE Table 3. Fulfillment fee changes for dangerous goods

FBA inbound placement service fees

Amazon charges the FBA inbound placement service fee for distributing inventory to designated fulfillment centers that are closer to customers. This fee was introduced by Amazon on March 1, 2024. You have two options to choose from when it comes to this fee.

FBA inbound placement service fees

Types of FBA inbound placement service fees

Types of FBA inbound placement service fees

• Minimal shipment splits: you send inventory to one fulfillment center, and Amazon distributes it for you for a fee;
• Partial (Amazon-optimized) shipment splits: you send your inventory to multiple Amazon fulfillment centers yourself for no fee.

FBA inbound placement service rates

FBA inbound placement fees standard-size products

FBA inbound placement fees non-standard-size products

Low-inventory-level fees

The Low-inventory-level fee applies to products that are frequently undersupplied to Amazon's customers, and their inventory levels are consistently lower than the demand. Amazon introduced this fee on April 1, 2024. 

If the inventory level of a product falls below 28 days, relative to its historical demand, a low-inventory-level fee will be charged.

Low-inventory-level fee rates

Returns processing fees

If the return rate for a product exceeds a certain threshold in its category, a Returns processing fee will be charged. The return rate is calculated as a percentage of returns over a specific month and the following two calendar months, compared to the monthly shipped units. This fee applies to all categories, except Apparel and Shoes, where a returns processing fee is charged for each customer-returned unit.

Amazon will introduce this fee on June 1, 2024.

Returns processing fee rates

Returns processing fee rates

Inbound defect fees

Amazon charges inbound defect fees if the shipments you send to their fulfillment centers do not comply with the FBA shipment requirements or differ from your shipping plan. These fees are charged for redirecting, receiving, and processing your shipment.

Inbound defect fee rates

Inbound defect fee rates

Amazon FBA Storage Fees

Amazon charges FBA storage fees to store your inventory in their warehouses. These fees are calculated based on the daily average volume of the space that your inventory occupies in the fulfillment centers. The rate of storage fees is determined by the product type, size tier, and time of year. 

Amazon FBA Storage Fees

Typically, the majority of storage fees are charged to your Amazon seller account monthly, usually between the 7th and 15th day of the month, in the month following when the fees were incurred.

Types of FBA storage-related fees 

• Amazon FBA monthly storage fees;
• Amazon Aged inventory surcharge;
• Inventory storage overage fees;
• FBA product removal and disposal fees.

Monthly inventory FBA storage fees

The FBA storage fees charged every month depend on the amount of space that your products occupy in Amazon's warehouse, which is calculated as the average daily volume in cubic feet. The fee for storage includes a basic storage fee and a storage utilization surcharge.

Basic storage fees

The fee for FBA storage depends on the size of your products and the time of the year. The fees differ between January-September (off-peak fees) and October-December (peak fees). Furthermore, the storage fees for dangerous goods are higher compared to other products.

Basic storage fee rates

Basic storage fees before April 1, 2024

Basic storage fees after April 1, 2024

Basic storage fees for dangerous products

Storage utilization surcharge

The Storage Utilization Surcharge fee applies to sellers on professional accounts who have a significant amount of standard-sized inventory occupying space during peak times. 

The following sellers are subject to this fee

• Sellers on Professional account;
• Sellers who have shipped their first inventory to Amazon's fulfillment center 365 days ago;
• Sellers with an average daily inventory volume for the product size tier of more than 25 cubic feet;
• Sellers with a storage utilization ratio above 26 weeks (22 weeks from April 1, 2024).

Storage utilization surcharge rates

Storage utilization surcharge before April 1, 2024

Off-peak storage utilization surcharge after April, 2024

Peak storage utilization surcharge after April, 2024

Amazon Aged inventory surcharge

If your inventory remains in Amazon's fulfillment centers for more than 180 days, you will be charged a long-term storage fee, also known as the Aged Inventory Surcharge. This fee applies to inventory that has been stored for more than six months (i.e., 181 days or more). 

The fee is based on a snapshot of your inventory taken on the 15th day of each month and is charged in addition to your regular monthly inventory storage fee. The Aged Inventory Surcharge is charged between the 18th and the 22nd day of each month.

Aged inventory surcharge rates

Aged inventory surcharge after February 15, 2024

Inventory storage overage fees

When your inventory surpasses your storage limits in a given month, you will be charged an Inventory Storage Overage fee, in addition to your monthly inventory storage fees and long-term storage fees, if applicable. 

The overage fee is determined by the number of days your inventory storage limits are exceeded and is charged after the end of the month in which the fees occurred.

Inventory storage overage fee rates

The overage fee is charged monthly at a rate of $10 per cubic foot. This fee is calculated based on the average daily volume of the space your inventory occupies in the Amazon fulfillment centers, which exceeds your storage limits.

FBA product removal and disposal fees

If you want to avoid long-term storage fees for your inventory in Amazon's fulfillment center, you can opt to ship it back or have Amazon dispose of the products. To do this, you need to place a removal or disposal order with Amazon. 

The fees for removal or disposal are charged per item that is removed. These fees are calculated when you place the removal or disposal order and are charged when the shipment goes out from Amazon.

FBA removal and disposal fee rates

FBA removal and disposal fees after February 5, 2024

Related: Amazon FBA Storage Fees Explained

FBA shipping to Amazon fees

FBA sellers must deliver their inventory to Amazon’s fulfillment centers. Amazon FBA doesn't include the cost of shipping your inventory to their warehouses. You are responsible for getting your products to Amazon.

Factors influencing shipping to Amazon fees

• Shipping carrier

The carriers you choose (USPS, UPS, FedEx, etc.) will have their own rates.

• Product size and weight

Larger and heavier items will cost more to ship.

• Shipping distance

The distance from your location to the fulfillment center will impact the price.

Related: How to Send Products to Amazon FBA

FBM Seller Fees

In addition to selling on Amazon fees (selling plan and referral fees), FBM sellers have to cover fulfillment and shipping costs. Unlike FBA sellers, they have to pick, pack, and ship your products by themselves and handle customer service.

Amazon FBM

FBM sellers don’t pay these fees to Amazon, they pay them to third-party service providers.

FBM fulfillment fees

If you are an FBM seller with several products and a few orders in a month, you can do the majority of the fulfillment job on your own. However, if you have many orders, you can opt to use third-party logistics (3PL) services to do fulfillment for you.

If you choose to use 3PL services, they will take care of the fulfillment side of your business, allowing you to focus on other tasks. 

Below is what 3PL services typically include for Amazon sellers.

3PL services

3PL Services

Warehousing

3PL providers store your inventory in their warehouses, eliminating the need for you to manage your own storage space.

Inventory management

3PL tracks your stock levels, manages incoming and outgoing shipments, and can even provide inventory forecasting to help you optimize stock.

Picking and packing

When a customer orders your product on Amazon, the 3PL will pick up the item from storage, pack it securely, and prepare it for shipment.

Shipping and fulfillment

They handle the entire shipping process, including selecting carriers, negotiating rates (which can be cheaper than individual seller rates), and sending the order to the customer.

Returns processing

3PLs can streamline the returns process by receiving returned items, inspecting them, and either sending them back to you or processing a refund on your behalf.

3PL service rates

3PL service rates depend on the provider and your inventory volumes. Typically, 3PL services will cost you between $.75 to $1.50 per square foot, the average being around $1.15 per square foot.

How does seller-fulfilled shipping work on Amazon?

When you fulfill FBM orders yourself, Amazon charges shipping rates based on the product category and shipping service selected by the customer, which you receive as shipping credit. 

Amazon lets you set custom shipping rates for your products. 

Amazon shipping rate options

Amazon shipping rate options

• Per item/weight

You can set a flat fee and a charge per item or pound.

• Price bands

You can set shipping rates based on total order price ranges.

• Weight tiers (for freight)

Approved sellers can set shipping rates based on the weight ranges of the order.

FBM shipping rates

The rates differ for professional and individual sellers.

Professional sellers

Sellers with the Professional plan get the option to set their shipping rates (except for books, music, video, and DVD products). 

Individual sellers

Sellers with the Individual plan have to use Amazon’s set shipping rates for all products. The price ranges from $3.99 - $46.50, depending on the category, type of shipping, and product weight.

Related: Amazon 3PL - Complete Guide for Sellers

How to Calculate Amazon FBA Fees?

Amazon charges FBA sellers many different fees. It is vital to accurately account for all of them because they affect your product profitability, profit margin, and Return on Investment (ROI).

FBA and sellers pay various fees to Amazon and other providers. It is crucial to accurately account for them as they can impact your product profitability, profit margin, and Return on Investment (ROI). 

To aid in this process, Amazon sellers utilize different Amazon fee calculators. One of the most effective calculators is the FBM&FBA calculator from Seller Assistant. This tool helps you to quickly calculate all FBA fees and expenses on the Amazon product page.

Seller Assistant is a powerful platform for product sourcing that assists in identifying products for sale on Amazon. The FBM&FBA calculator from Seller Assistant displays all Amazon fees for FBA and FBM sellers separately. It shows Amazon referral fees, FBA fees, and storage costs.

Seller Assistant calculates all Amazon fees

You can also include product preparation and shipping expenses in your calculation. Furthermore, 3PL, shipping, and preparation costs can be configured in the settings.

3PL, shipping, and preparation costs can be configured in the settings

Related: Amazon FBA Calculator: Free vs. Paid

FAQ

Does Amazon charge fees for FBM?

Yes, there are fees associated with selling on Amazon regardless of FBM, but FBM itself doesn't have a separate fee on Amazon. You'll pay standard fees like referral fees and selling plan fees.

What percentage is Amazon FBA fees?

Amazon FBA fees depend on product size and weight, but there's also a referral fee typically around 15% of the selling price. This fee can be lower or higher depending on the product category.

Is it better to do FBA or FBM?

FBA is generally better for high-volume sellers or those who want Amazon to handle fulfillment. FBM is better for low-volume sellers with control over costs and fulfillment but requires more work on your end.

How much does Amazon take off a FBM sale?

Amazon itself doesn't take a direct cut from your FBM sale. You'll pay standard seller fees like referral fees (around 15%) and a potential monthly subscription fee, but fulfillment costs like shipping are on you.

Conclusion

As an Amazon FBA seller, you are subject to various fees with intricate structures. Along with selling plan fees and referral fees that apply to all Amazon sellers, FBA and FBM sellers pay many different fees either to Amazon or to other service providers.

In 2024, Amazon introduced new FBA fees that have altered the existing fees and introduced several new ones. To ensure that you maintain healthy profit margins and ROI, it is crucial to accurately calculate all costs, including storage fees.

Seller Assistant will help you with that. It combines Side Panel View, FBM&FBA Profit Calculator, Quick View, ASIN Grabber, UPC/EAN to ASIN converter, Stock Checker, IP Alert, Restrictions Checker, in one tool.

Originally published at https://www.sellerassistant.app/blog/amazon-fba-and-fbm-fees