Calculate your Amazon FBA fees and net profit
Cost to acquire/manufacture the product
Estimated monthly storage cost per unit
Amazon FBA (Fulfillment by Amazon) charges sellers multiple fees for storing, picking, packing, and shipping products. The main costs include fulfillment fees based on product size and weight, referral fees as a percentage of the sale price, and monthly storage fees. Understanding these costs is essential for pricing products profitably and maintaining healthy margins on the Amazon marketplace.
FBA fulfillment fees are charged per unit and cover picking, packing, shipping, customer service, and returns. Fees vary by product size tier: Small Standard (under 12 oz) starts at $3.22, Large Standard (under 1 lb) starts at $3.86, and increases with weight. Large Bulky items have significantly higher fees starting around $9.73 and increasing based on dimensions and weight.
Amazon charges referral fees as a percentage of the total sale price (including item price and shipping). Most categories have a 15% referral fee, but rates vary: Electronics (8%), Automotive (12%), Clothing & Accessories (17%), and Jewelry (20%). Some categories have minimum referral fees, typically $0.30 per item.
Monthly storage fees are based on the volume your products occupy in Amazon fulfillment centers. Standard-size items cost $0.87 per cubic foot (January-September) and $2.40 per cubic foot (October-December). Oversized items cost $0.56 per cubic foot (January-September) and $1.27 per cubic foot (October-December). Long-term storage fees apply to items stored over 365 days.
Small Standard: Items up to 12 oz with dimensions under 15" x 12" x 0.75". Examples include small books, phone cases, and cosmetics. Lowest fulfillment fees make this tier ideal for lightweight products.
Large Standard: Items up to 20 lbs with dimensions under 18" x 14" x 8". Most common tier for everyday products like clothing, kitchen items, and electronics. Fees increase with weight brackets.
Large Bulky: Items over 20 lbs or exceeding Large Standard dimensions. Includes furniture, large appliances, and sporting equipment. Significantly higher fulfillment fees require careful pricing strategy.
Optimize Product Dimensions: Reducing package size even slightly can move your product to a lower size tier, significantly reducing fulfillment fees. Consider packaging efficiency when sourcing products.
Monitor Storage Costs: Keep inventory lean to minimize monthly storage fees. Use Amazon's inventory performance metrics to identify slow-moving products and adjust your strategy before long-term storage fees apply.
Choose Categories Wisely: Referral fees vary significantly by category. When possible, list products in categories with lower referral fees while maintaining accurate categorization.
Calculate Break-Even Pricing: Always know your break-even price before listing. Factor in product cost, shipping to Amazon, FBA fees, and desired profit margin to set competitive yet profitable prices.
Underestimating Total Costs: New sellers often forget to include all fees when calculating profitability. Always account for fulfillment fees, referral fees, storage fees, and inbound shipping costs.
Ignoring Size Tier Impact: Small changes in product dimensions or weight can dramatically affect fees. Verify your product's size tier classification and optimize packaging accordingly.
Overstocking Inventory: Excessive inventory leads to high monthly storage fees and potential long-term storage charges. Balance inventory levels with sales velocity to minimize storage costs.
Not Accounting for Returns: Amazon's customer-friendly return policy means sellers must factor in return rates when calculating true profitability. High return rates can significantly impact margins.
Fulfillment by Amazon (FBA) offers Prime eligibility, customer trust, and hands-off logistics, but comes with higher fees. Fulfillment by Merchant (FBM) gives you more control and lower fees but requires managing your own shipping and customer service. For lightweight, high-margin products, FBA often provides better ROI through increased sales velocity. For heavy, low-margin items, FBM may be more profitable despite lower sales volume.
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