Key Takeaways
- Amazon takes 15% referral fee on most product categories
- FBA fulfillment fees range from $3.22 to $150+ based on size/weight
- Target a minimum 25-35% profit margin for sustainable FBA business
- Storage fees increase 4x during Q4 (October-December)
- Rule of 3: Product cost should be 1/3 of selling price or less
Understanding Amazon FBA Fees
Amazon FBA (Fulfillment by Amazon) charges sellers several types of fees in exchange for handling storage, picking, packing, shipping, and customer service. Understanding these fees is crucial for calculating your true profit margins and ensuring your products are viable for the FBA program.
1. Referral Fees
Amazon charges a referral fee on every sale, which is a percentage of the total sale price (including shipping charges). This fee varies by product category:
| Category | Referral Fee | Minimum Fee |
|---|---|---|
| Electronics | 8% | $0.30 |
| Computers | 6-15% | $0.30 |
| Home & Kitchen | 15% | $0.30 |
| Sports & Outdoors | 15% | $0.30 |
| Clothing & Accessories | 17% | $0.30 |
| Jewelry | 20% | $0.30 |
| Amazon Device Accessories | 45% | $0.30 |
2. FBA Fulfillment Fees
These are the fees Amazon charges to pick, pack, and ship your products. They depend on the product's size tier and shipping weight:
| Size Tier | Weight Range | Fulfillment Fee |
|---|---|---|
| Small Standard | Up to 16 oz | $3.22 - $3.40 |
| Large Standard | Up to 3 lbs | $4.75 - $6.10 |
| Small Oversize | Up to 70 lbs | $9.73 + $0.42/lb |
| Medium Oversize | Up to 150 lbs | $19.79 + $0.42/lb |
| Large Oversize | Up to 150 lbs | $89.98 + $0.83/lb |
| Special Oversize | Over 150 lbs | $158.49 + $0.83/lb |
3. Storage Fees
Amazon charges monthly inventory storage fees based on cubic feet of space your products occupy:
- January - September: $0.87 per cubic foot (standard) / $0.56 per cubic foot (oversize)
- October - December: $2.40 per cubic foot (standard) / $1.40 per cubic foot (oversize)
Pro Tip: Avoid Long-Term Storage Fees
Products stored over 365 days incur long-term storage fees of $6.90 per cubic foot or $0.15 per unit, whichever is greater. Keep inventory lean and turn products quickly to maximize profitability.
What Makes a Profitable FBA Product?
The most successful FBA sellers follow the Rule of 3: your product cost should be roughly 1/3 of the selling price, Amazon fees take 1/3, and you keep 1/3 as profit.
Ideal Product Criteria:
- Selling price: $15 - $50 (sweet spot for impulse purchases)
- Weight: Under 3 lbs (keeps fulfillment fees low)
- Size: Small to Large Standard (avoid oversize fees)
- Margin: 25% or higher after all fees
- ROI: 100% or higher preferred
Frequently Asked Questions
Most successful FBA sellers aim for a minimum 25-35% net profit margin after all Amazon fees, product costs, and shipping. This provides enough buffer for PPC advertising costs, returns, and market fluctuations.
ROI = (Net Profit / Total Investment) x 100. For example, if you invest $10 (product cost + shipping) and make $15 profit, your ROI is 150%. An ROI of 100% or higher is generally considered good for FBA.
You'll continue paying monthly storage fees, and after 365 days, long-term storage fees apply. You can request a removal order to have unsold inventory shipped back to you (for a fee) or disposed of. It's better to lower prices and sell through inventory than let it age.
No, FBA fees vary by marketplace. This calculator uses US Amazon fees. European marketplaces (UK, Germany, France, etc.) have different fee structures, generally based on local currency and regional fulfillment costs.
Strategies include: 1) Reducing packaging size to qualify for smaller size tiers, 2) Keeping inventory lean to minimize storage fees, 3) Removing slow-moving inventory before long-term storage fees kick in, 4) Negotiating better product costs with suppliers, 5) Using Amazon's partnered carrier program for cheaper inbound shipping.