A Guide To Amazon FBA Fees for sellers 2020

Amazon FBA Fees apply if you sell on Amazon. One of the biggest challenges of being a seller is finding out how much profit you are making after Amazon FBA Fees Deducted. Growing revenue is enticing, sure, but it doesn’t pay the bills in the end. In the real world, your returns on investment and your net profits are all that determine your success in business. 

All this sounds good, but they are quite difficult to calculate. There are shipping fees, selling fees and referral fees, returns, taxes, FBA fees, advertising fees, etc. We can’t calculate them to perfection here, but we can certainly try and understand one of the most difficult ones: FBA fees and Amazon fees. One of the easiest ways to calculate these costs for a particular product is with the help of an Amazon FBA calculator.

What Is Amazon FBA?

FBA Stands for Fulfilled By Amazon. Fulfillment By Amazon (FBA) is a service started by Amazon that provides storage, packaging, and shipping to sellers.

Using FBA, you can send products to Amazon’s warehouses and they handle all the responsibilities regarding storage, shipping to customers, distribution, customer service, and returns. For this service, Amazon charges a fee, called FBA fee. This varies depending upon the size and the weight of the product.

Benefits of Using FBA as Fulfillment Type

Most of the Amazon sellers opt to use FBA because of the perks and simplicity it offers. When you choose FBA, your products get the ‘Prime’ badge. This helps with conversion and how and where your products show up in searches.

Almost half of the households in India have Amazon Prime membership, mostly because they want to get their orders delivered fast. Some buyers even check the box to only look for products with Prime bade. Additionally, FBA sellers have the benefit of gaining the buy box

Put simply, Amazon Buy Box is an algorithm, which determines the ‘default’ seller for a product with several sellers. This depends on both seller feedback, return rate, performance, shipping metrics, Prime status, and price. So, for sellers looking for an easy benefit in the Buy Box, sending their products to Amazon’s warehouses could be a great option. 

For all the benefits of FBA, there are a few drawbacks: they charge sellers fees depending upon the weight and the size of the product. And Amazon FBA fees can become quite expensive sometimes as the size or the weight of the product increases. 

How well do you know your Amazon Profits?

Selling physical products on Amazon makes it very hard for you to figure out how much profit you are making. This is quite important to know before you launch a physical product on Amazon and also after.

You need to do some product research while launching your product and calculate to estimate your product’s true value by taking into account the initial investment costs, estimated sales, and FBA costs. 

Once you have your products listed on Amazon, you need to keep track of your fees to ensure you are running your business well. Several Amazon sellers are known to have lost money because of not doing this

How to understand your Costs?

One of the first things you need to understand is your costs, before deciding to list your product on the Amazon marketplace. You can break your costs into three important aspects:

  • Variable costs: FBA fees, storage fees, returns, etc.
  • Upfront costs: Samples, cost of goods, shipping, photography
  • Marketing costs: Promotions pay per click, etc.

What are the FBA Fees for Indian sellers?

Referral Fees

Amazon has several kinds of fees. They charge a fee for selling your products on their marketplace, which is called referral fees. Usually, referral fees are ranging from 5%-15% of the sales price, although this has a few exceptions depending upon the category and the final price. Additional fees exist for the products you choose for Amazon to fulfill. 

Closing Fees

Amazon charges a closing fee for every order you get. These fees are mentioned below.

Item PriceFee
₹ 0 – 250₹ 25
₹ 251 – 500₹ 20
₹ 501 – 1000₹ 12
₹ 1000+₹ 26

Fulfillment Fees

Fulfillment Fees depend on the weight and dimension of your product and shipping distance.

Amazon Fulfillment fees are :

  • Pick & Pack Fee (per unit)
  • Storage fee
  • Shipping fee

Below are the cost-related to Fulfillment Fees :

Pick & Pack Fee₹ 10
Storage fee(per cubic foot/month)₹ 20
Shipping feeAs per below Shiping Table

Shipping Fees for Amazon FBA:

First 500 gms₹28 (Local)₹36 (Regional)₹56 (National) 
Each additional 500 gms up to 1kg₹16(Local)₹21 (Regional)₹25 (National)
Each additional kg₹10 (Local)₹15 (Regional)₹20 (National)

FBA Removal Fees

FBA Removal Fees applies if you wish to remove or withdraw your products from the Amazon Fulfillment Center then the following fee rates will be applicable.

Removal Fees based on the item type:

Small Size₹5 (Self-pickup)₹5 (Standard Shipping)₹15 (Expedited Shipping)
Standard Size₹10 (Self-pickup)₹10 (Standard Shipping)₹30 (Expedited Shipping)
Oversize₹25(Self-pickup)₹25 (Standard Shipping)₹50 (Expedited Shipping)
Oversize – Heavy & Bulky₹25 (Self-pickup)

A note for For sellers regarding Removal Fees:

  • FBA Removal fee is charged per unit
  • Expedited and Standard Shipping Removals are not available for Oversize Heavy and Bulky units.
  • Amazon offers zero Removal Fee for the first three months (from the first shipment to FC date) for all new sellers joining FBA (sellers joining FBA on or after May 1st, 2016). This offer will be applicable only for Pickup and Standard Removal orders. This offer is not applicable for Expedited Removal orders.
  • All fees above are displayed excluding taxes. We will apply 18% Goods and Services Tax (GST)

Calculating Your Total FBA Fees

You can calculate total FBA fees charges by Amazon by Adding Referral Fee + Closing Fee + Fulfillment Fee + Tax (18%)

Total FBA Fee = Referral Fee + Closing Fee + Fulfillment Fee + Tax (18%)

Other Costs to Sell on Amazon

There are other small costs to sell on Amazon, which sometimes go unnoticed. Think about returns, shipping items back to you, disposal costs, business costs, such as insurance, payroll, travel, and taxes. Some of these fluctuate from time to time and some of them remain the same. So how do you keep track of these and make sure you know what your outgoings and profits are exactly? The answer: Amazon FBA Calculator.

Amazon FBA Calculator

Amazon has an easy FBA calculator, which is a very useful tool for any FBA seller. This lets you figure out how much you will have to pay in fees to use the Fulfillment by Amazon for any given item. You can find the FBA calculator at Amazon India FBA Calculator.

Here’s how it works:

Amazon FBA fees include costs for different kinds of fulfillment services, including:

  • Order handling
  • Pick & pack
  • Outbound shipping
  • Weight handling
  • 30-day storage
  • Inbound shipping

In order to find out how much an item of yours might cost in FBA fees, go to the FBA calculator in your marketplace and search for a similar product and select it. 

So in order to find out how much an item you are interested in might cost, head to the FBA calculator in your marketplace, search for a similar product, and select it:

Amazon FBA Calculator
Amazon FBA Calculator

In the calculator, look on the right-hand side of the column and enter your product price, the cost to ship it to Amazon warehouse, and the final cost of the item per unit

FBA-fees-calculator
FBA-fees-calculator

Finally, when you click ‘Calculate’, the FBA calculator will give you a proper breakdown of your Amazon Fulfillment costs, which includes FBA fees and selling fees. The calculator will also show you your Net Margin and Net Profit.

Calculating your Profit
Calculating your Profit

It goes without saying that you can enter some rough estimates regarding the manufacturing cost of the products and the shipping cost.

How to Reduce FBA Fees?

All this talk about fees and expenses could be quite disconcerting. There are a few ways to reduce the FBA fees and still keep your profits.

1. Understand the cutoff points between size tiers.

Be aware of where a rise in FBA fees occurs. This can save you hundreds and thousands of rupees a month. The difference between an oversized and a regular product can make a huge difference

2. Use programs such as Seller Fulfilled Prime if you are more of an established seller.

This helps you sell heavier and larger products than you had known before and it could help your business expand quickly. Lighter and smaller products are usually the first ones sold by Amazon and big and larger products have the potential to have a high-profit margin and ROI (but come with a higher investment).

This means extra research on your products and extreme caution, but it will surely take your business to the next level.

Conclusion

Now that you are aware of FBA fees and how to calculate it using FBA calculator for-profits, pay close attention to these fees. Keep researching your products before, during, and after launching them on Amazon. Making profit by selling on Amazon is not that tough, after all.

Frequently Asked Questions (FAQ):

How much is Amazon FBA fees?

Amazon FBA Fees are consists of Referral Fee , Fulfillment fee and closing fee.
Total FBA Fee = Referral Fee + Closing Fee + Fulfillment Fee + Tax (18%)

Is selling on Amazon FBA Profitable?

Despite the many fees Amazon charges for storage, order handling, picking and packing, weight handling, and commission, sellers of FBA say it is still worth itSelling via FBA makes you a far more desirable seller, which can have a significant impact on your store’s success

How much do FBA sellers make?

It depends on which product you sell and demand of the in market. Most Amazon sellers at salesla make at least 7,0000 per month in sales, and some super-sellers make upwards of 60 lacs each month in sales .

What is FBA Disposal Fees

disposal fees Applies to FBA when an item is removed from inventory forever.

What is the TAX rate of FBA ?

Amazon applies 18% Goods and Services Tax (GST) to its FBA fees for all Indian Sellers.

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