Detailed explanation of Amazon FBA fees: how to calculate and optimize

Amazon FBA (Amazon Fulfillment Service) is a commonly used warehousing and logistics solution for cross-border e-commerce sellers. Its fee structure is complex and covers many aspects. This article aims to help sellers understand the composition and calculation of FBA fees, and provide corresponding cost management suggestions.

Main components of Amazon FBA fees

Amazon FBA fees mainly consist of the following parts:

• Storage charges: Calculated based on the time and space the product is stored in Amazon’s warehouses. Different seasons and warehouse locations will also affect specific costs.

• Order processing fee: Includes fees incurred in picking, packaging, and delivery. The specific amount is determined based on factors such as the complexity of the order, product size, weight, and delivery distance.

• Delivery fee: Refers to the logistics fee for sending the product from Amazon’s warehouse to the buyer, which varies according to the size, weight and destination distance of the product.

• Return Processing Fee: Amazon charges a fee for inspecting, repackaging, and restocking returned items.

• Long-term storage fee: If the product stays in Amazon’s warehouse for longer than the specified period (usually one year), you will need to pay additional fees.

Specific calculation method of FBA fees

Storage fees

Storage charges are billed monthly and are calculated based on the volume and weight of the product.

Order processing fee

The order processing fee is determined based on the difficulty of processing each order, which involves multiple processes such as packaging, picking, and delivery.

Delivery fees

Delivery charges are calculated based on the actual size, weight and shipping distance of the item.

Return processing fee

The return processing fee is charged based on the complexity of the operation required for the returned goods to enter the sales process again.

Long-term storage fees

Long-term storage fees are calculated based on the actual storage time of the product in Amazon’s warehouse.

In addition, FBA fees also include two important parts: execution fee and monthly storage fee. The specific values ​​of the execution fee and monthly storage fee depend on the packaging size and weight of the product. Amazon classifies products as standard or extra-large based on whether they meet certain criteria:

• A single packaging unit is considered standard size if it weighs 20 pounds or less and is 18 inches or less on its longest side, 14 inches or less on its middle side, or 8 inches or less on its shortest side; otherwise it is oversized .

• For items with super-standard sizes, “long side + base perimeter” refers to the base formed by taking the longest side as the height, the mid-long side and the shortest side.

• The product weight classification method applies to standard-size items (except non-media items that weigh more than 1 pound), and to large items in small, medium, and large sizes and standard-size non-media items that weigh more than 1 pound. For media products, the greater of the product weight or volumetric weight will be used as the basis for billing. The formula for calculating volumetric weight is: product volume (length × width × height, in inches) divided by 139.

Strategy for optimizing Amazon FBA fees

In order to better control costs, sellers can start from the following angles:

• Accurate inventory management: Plan inventory levels appropriately to avoid high storage costs caused by excess inventory.

• Accurate sales forecast: Make forecasts based on historical sales data and market trends to effectively manage orders and prevent inventory backlogs.

• Optimize product size and packaging: Ensure product size and weight information is accurate and keep packaging design as simple as possible to reduce handling and shipping costs.

• Regular clearance of slow-moving inventory: Deal with slow-moving or expired goods in a timely manner to reduce long-term storage costs.

• Regularly review expense details: Keep an eye on expense bills to ensure there are no unreasonable charges.

In summary, through the above measures, sellers can not only effectively manage Amazon FBA related expenses, but also improve their operational efficiency and service quality.