Photo by Christian Wiediger on UnsplashAre you struggling to remain on top of your Amazon FBA expenses? You are not alone. Many professional merchants have difficulties calculating their profit margins because of the platform’s complex fee structures.
Amazon FBA calculator can allow you to determine exactly what you need to pay based on the products sold, your selected fulfillment method and associated expenses, and even the dimensions of the items you sell.
Below, we are going to break down each AMZ FBA cost to help you understand where every dollar of your money is going. We will also give you tips on estimating your costs and expected profits.
What Are Amazon FBA Fees?
Now when all are hyped about Amazon FBA, let’s look at the commission that sellers can expect. Remember, we are covering a list of Amazon FBA commissions—not all of the expenses. You will still have general AMZ costs (per item, referral, closing commissions, etc.), manufacturing, website hosting costs, and more.
Here are the main Amazon FBA fees:
1. FBA fulfillment cost
It is also known as the pick-and-pack commission. The marketplace charges a per-item cost to locate, label, and deliver items to clients. The price is determined by the product’s category, dimensions, and size. Check out the platform’s rate cards to learn what fulfillment fee you will be charged per item.
2. FBA storage cost
The marketplace charges inventory storage commission per month based on the dimensions of your items. These costs differ depending on your merchandise category and the period of the year. However, you do not have to guess the number. AMZ offers rate cards to help sellers determine their FBA storage fees any month of the year.
3. FBA long-term storage cost
Unfortunately, AMZ FBA is not somewhere sellers can just accumulate their extra inventory—especially if it is not selling promptly. Amazon sets a long-term storage cost for any unit left in the warehouse for more than a year.
4. FBA disposal order cost
You may wish to discard old goods that are not moving and accumulate storage commissions. The marketplace will dispose of the products for you, but it will cost some fee. Pricing varies depending on the dimensions and shipping weight of the merchandise.
5. FBA removal Order cost
Disposal and removal are not the same things. Submit a removal order if you would like AMZ to return your stock to you—submit a disposal order if you would like the marketplace to go ahead and trash it.
6. FBA unplanned service cost
The platform has strict regulations for prepping and labeling your goods before delivering them to fulfillment centers. Get it wrong, and you will need to pay a per-unit fee for them to fix it. Such mistakes can also generate some delays.
7. FBA returns processing cost
Amazon conveniently manages all returns and exchanges for goods. However, with the FBA solution, most categories of products offer free return shipping. Although it might encourage more clients to try your goods, it may jack up your return rate—and returns are not free for you.
Amazon FBA Fee Calculator
Do you not want to get out your phone and crunch the numbers yourself? Don’t fret. You are an entrepreneur—you do not need to be a mathematician as well.
Check out the plug-and-play AMZ FBA fee calculator to let the system do the crunching for you. It is Amazon’s tool, so you can be confident it will be just about spot on.
How to Use Amazon’s FBA Fee Calculator
Using the estimator is pretty straightforward. First, find the item you wish to sell on the platform. Then, if you cannot find the goods (or they don’t exist yet), fill in the estimates for the packaging dimensions and weight.
Next, enter the self-fulfillment info, such as the product’s price, typical shipping expenses, storage payments, and cost of items sold. Once you are finished, click the “Calculate” button.
The Amazon fee calculator will bring the estimated expenses and ROI for fulfillment by you and the FBA solution. You will see the head-to-head margins and net profit for the two options.
However, do not let this final number become the deciding factor. Remember the precious time you might save that the tool does not represent.
For instance, selling through FBA may yield a little fewer bucks in profit per order, but it might save you numerous hours of work. That is the time you could spend managing your company and planning for the future.
Control FBA Expenses to Stay Profitable
Whether a newbie or a seasoned merchant, gaining a more in-depth understanding of AMZ costs can help you save your profit margins and make more informed pricing decisions.
Use the tool to determine your item’s profit potential prior to pulling the trigger. Making such profit calculations will also help you determine whether or not it is a good idea to sell it via FBA – or at all.