FBA Calculator – Hidden Fees All Amazon Sellers Should Know About (Updated For 2020)
The value of Amazon FBA has gone up dramatically in 2020. Please overview this up to date Amazon FBA Calculator to see how this can have an effect on your margins.
Have you ever puzzled how Amazon retailers promoting $2 objects can presumably make a revenue? The fact is that they aren’t.
In truth, most sellers fail to calculate all the charges related to promoting on Amazon and find yourself shedding cash consequently.
To make issues worse, Amazon doesn’t precisely make it straightforward so that you can tabulate your entire prices related to promoting on their platform and there are various hidden prices that Amazon doesn’t inform you about.
Because I’ve been promoting on Amazon for a few years now, I wrote this put up that will help you perceive your entire prices together with all surprising charges.
I’ll additionally present you use Amazon’s payment calculator and enumerate your entire Amazon FBA prices.
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How Much Does It Cost To Sell On Amazon?
Amazon expenses a number of charges for the privilege of promoting on their platform and if you first join as a model new vendor, you could select between 2 plans, Professional or Individual.
An particular person vendor account doesn’t carry a recurring month-to-month payment. However, you could pay a $.99 closing payment for each merchandise you promote on their market along with a referral payment of Eight-45% (The actual payment relies on your product class).
Knowledgeable vendor account prices $39.99 per 30 days however you don’t must pay the $.99 per merchandise payment like a person vendor. As a outcome, if you happen to promote greater than 40 objects per 30 days, it’s all the time cheaper to get an expert vendor account.
Professional sellers additionally must pay a referral payment that ranges from Eight% to 45%. Most product classes, nevertheless, will value you 15%.
How Much Are Amazon Referral Fees?
Amazon’s referral charges are based mostly on the product class you promote into and a few classes additionally carry a per-merchandise minimal referral payment.
For instance if you happen to promote jewellery, the referral payment is 20% for the portion of the full gross sales value as much as $250 after which 5% after that. There’s additionally a minimal referral payment of $.30.
When you promote on Amazon, you’ll all the time get charged at the least the minimal per-merchandise referral payment.
But in observe, the share referral payment (which ranges from Eight% to 45%) will virtually all the time be larger than the minimal per-merchandise payment until you promote extraordinarily low cost objects.
Because most product classes carry a 15% payment, many new Amazon sellers incorrectly assume a 15% payment by default.
Make certain you verify the referral payment desk beneath as a result of some classes have charges as excessive as 45%!
Here is a chart supplied by Amazon that will help you decide referral charges on your particular product and class.
(Note: I’ve solely listed classes that don’t fall underneath the usual 15%)
Depending on what you promote, sure product varieties might carry variable referral charges as nicely.
For instance books, music, movies, DVDs, video video games and software program have charges that fluctuate based mostly on class, delivery vacation spot and the kind of delivery service.
Amazon Referral Fee Updates For 2020
For probably the most half, Amazon normally will increase their referral charges from yr to yr. But for 2020, they’ve really decreased them for sure choose classes.
If your merchandise fall underneath these classes, then think about your self fortunate!
Note: All of those payment adjustments start on February 18, 2020
- Shoes, Handbags & Sunglasses – The referral payment proportion is lowering from 18% to 15% when the full gross sales value is above $75.00.
- Outdoor Furniture – The referral payment proportion is lowering from from 15% to 10% on any portion of the full gross sales value above $200.00.
- Personal Care Appliances – Personal care home equipment are getting collapsed into the Health & Personal Care class which reduces the referral payment from 15% to eight% for objects with a value of $10.00 or decrease. Items priced above $10.00 will stay 15%.
Meanwhile, the next classes have gone up in value
- Activewear – All activewear clothes will now be charged the Clothing & Accessories class referral payment proportion of 17% as a substitute of 15%.
- Ring Accessories – Ring equipment at the moment are thought of Amazon Device Accessories which have a referral payment proportion of 45%.
How To Save On Amazon Referral Fees
The referral payment that you simply pay Amazon is kind of set in stone and you’ll be able to’t do very a lot to scale back it.
However, I’ve heard some Amazon gurus on the market who suggest purposely miscategorizing your objects in classes with decrease referral charges to save cash.
Please don’t do that!
If you categorize your merchandise improperly, it’s possible you’ll by no means ever rank in Amazon search.
For instance, if you happen to attempt to promote designer headphones within the jewellery class, then you’ll by no means ever rank for headphones as a result of Amazon doesn’t anticipate to see “headphones” within the jewellery class.
How To Use Amazon’s Fee Calculator For Amazon FBA
If you promote on Amazon, it’s in your greatest pursuits to promote on Amazon FBA. Not solely will your conversion price be 3X larger than service provider fulfilled listings however your product could have far higher visibility within the Amazon market.
However calculating the precise Amazon FBA payment will be extraordinarily complicated and new sellers typically drastically underestimate the true value of Amazon success.
To assist make the maths simpler, Amazon offers a helpful FBA calculator which will be discovered right here
To use the calculator, you could first do a search on Amazon and discover an merchandise that carefully resembles what you are attempting to promote.
Amazon will then use the dimensions and weight of this merchandise to assist calculate your success prices.
Here’s the calculator in motion utilizing a garlic press for example.
Once you’ve chosen an identical merchandise, enter in your promoting value and product prices and hit calculate.
Amazon’s calculator will then output the approximate value of Amazon success utilizing FBA.
While this calculator is easy and simple to make use of, it’s under no circumstances 100% correct. In truth, Amazon full on discloses that the calculator is there for approximation functions solely!
In actuality, there are a variety of things that you could think about which might be NOT factored into this calculator.
How Much Does Amazon FBA Really Cost?
The place most new sellers screw up is that they don’t bear in mind the dimensions of the merchandise or the additional bulk that Amazon provides when packing the product.
First off, Amazon all the time provides a packing weight of at the least .25 lbs relying on the dimensions of your product (Amazon will add as much as a 1 lb extra in case your product is massive and falls underneath the outsized class).
As a outcome, in case your product weighs .76 lbs, Amazon will all the time spherical as much as over 1 lbs of their delivery calculations which is able to enhance your prices.
You additionally must bear in mind the dimensional dimension of your product as nicely. For instance, Amazon expenses much more cash for outsized items and it’s important to take this into consideration in your calculations.
Below is a desk of Amazon’s outsized merchandise success expenses on your overview.
Unfortunately, all FBA success charges are going up considerably in 2020!
|Before February 18, 2020||February 18, 2020, and after|
|Size tier||Shipping weight||Packaging weight||Fulfillment payment per unit1||Fulfillment payment per unit1|
|Small commonplace||10 ouncesor much less||four oz||$2.41||$2.50|
|10 to 16 oz||$2.48||$2.63|
|Large commonplace||10 ouncesor much less||four oz||$three.19||$three.31|
|10 to 16 oz||$three.28||$three.48|
|1 to 2 lb||four oz||$four.76||$four.90|
|2 to three lb||four oz||$5.26||$5.42|
|three lb to 21 lb||four oz||$5.26 + $zero.38/lb above first three lb||$5.42 + $zero.38/lb above first three lb|
|Small oversize||71 lb or much less||1 lb||$Eight.26 + $zero.38/lb above first 2 lb||$Eight.26 + $zero.38/lb above first 2 lb|
|Medium oversize||151 lb or much less||1 lb||$9.79 + $zero.39/lb above first 2 lb||$11.37 + $zero.39/lb above first 2 lb|
|Large oversize||151 lb or much less||1 lb||$75.78 + $zero.79/lb above first 90 lb||$75.78 + $zero.79/lb above first 90 lb|
|Special oversize||N/A||1 lb||$137.32 + $zero.91/lb above first 90 lb||$137.32 + $zero.91/lb above first 90 lb|
Here’s the brand new FBA success payment desk for clothes. As you’ll be able to see, the charges have gone up virtually 10%!
|Before February 18, 2020||February 18, 2020, and after|
|Size tier||Shipping weight||Packaging weight||Fulfillment payment per unit||Fulfillment payment per unit|
|Small commonplace||10 ouncesor much less||four oz||$2.81||$2.92|
|10 to 16 oz||$2.88||$three.11|
|Large commonplace||10 ouncesor much less||four oz||$three.59||$three.70|
|10 to 16 oz||$three.68||$three.81|
|1 to 2 lb||four oz||$5.16||$5.35|
|2 to three lb||four oz||$5.66||$5.95|
|three lb to 21 lb||four oz||$5.66 + $zero.38/lb above first three lb||$5.95 + $zero.38/lb above first three lb|
In most circumstances, the further dimensional success charges are NOT lined in Amazon’s payment calculator so it’s important to cross verify your package deal dimensions with the desk above to get an correct value evaluation.
How To Save On Amazon FBA Fees
The greatest strategy to save in your Amazon FBA charges is to plan forward and be paranoid about all the pieces.
As you might be growing your merchandise on the market, just be sure you design your package deal dimension to fall nicely beneath the outsized merchandise class to keep away from paying the additional charges.
You additionally must bear in mind dimensional weight when designing your packaging as nicely.
What is dimensional weight?
Dimensional weight is a system that UPS, FedEx and different main delivery carriers use to gauge delivery prices. Typically dimensional weight is calculated as Weight x Length x Height /139 (The quantity within the denominator is negotiable).
Shipping carriers (and Amazon) will examine the burden of your package deal to your dimensional weight calculation and cost you the upper of the 2 prices.
If you aren’t paying consideration, you’ll be able to simply screw this up and I’ve had colleagues pay ridiculously excessive delivery prices as a result of a 1 lb merchandise was housed in an irregularly formed field.
Once you’ve deliberate forward along with your packaging, you continue to must be paranoid.
Make certain that you simply ship your product to your self for inspection earlier than doing a bulk cargo to Amazon’s warehouse simply to make it possible for the scale of your product and weight match what you anticipate.
Then, when you make your first cargo to Amazon, make it possible for the scale that Amazon measures match up along with your measurements.
Amazon typically screws this up and until you might be paying shut consideration to your Amazon invoice, it’s possible you’ll not uncover that you simply’ve been incorrectly paying outsized FBA charges till just a few months have handed.
In the occasion that you simply discover a discrepancy, be sure you contact Amazon assist instantly and have them re-measure your objects BEFORE you begin promoting them.
How Much Are Amazon’s Storage Fees?
In addition to Amazon’s success charges, you additionally must pay Amazon for the privilege of storing your items of their warehouse.
And in terms of charges, Amazon has drastically elevated their storage prices each single yr.
What’s complicated about Amazon storage charges is that they modify relying on the time of the yr and it’s tough to time your stock storage wants.
For instance, over the vacation season from October to December, Amazon’s storage charges can enhance by as much as 3X. Here’s a desk of storage charges on your overview.
The dimension of your merchandise have a dramatic impact on Amazon’s storage charges. In normal, outsized objects will value you a considerably larger quantity for Amazon to retailer of their warehouse.
How To Save On Amazon Storage Fees
Because Amazon has a monopoly on Amazon FBA, there’s not a lot you are able to do to save lots of on storage prices and so they have you ever over a barrel since you just about have to make use of their warehouse to get the “Prime” label.
Note: You can nonetheless get the Amazon Prime label on your product via a program referred to as Seller Fulfilled Prime, however you have to be extraordinarily cautious as a result of there’s a excessive threat of account suspension if you happen to don’t ship your items on time.
The greatest strategy to save in your storage prices is to precisely predict your stock ranges and just be sure you aren’t storing an excessive amount of product at any given time, particularly in the course of the holidays.
You additionally must bear in mind Amazon’s long run storage charges as nicely.
If you retailer stock at Amazon for longer than 6 months, you’ll get penalized an egregious amount of cash.
Long time period storage penalties are calculated by the cubic foot and are outlined within the desk beneath.
Overall, it’s in your greatest pursuits to retailer not more than 6 months price of stock and use LTL delivery to Amazon’s warehouse to save cash.
Costs Of Selling On Amazon That Most People Do Not Consider
Most of the prices mentioned above are pretty simple and most sellers are in a position to account for these prices of their calculations.
However, the next prices described beneath are surprising charges that most individuals actually don’t take into consideration till they really expertise promoting on Amazon.
Cost #1: Shipping Goods To Amazon’s Warehouse
Whereas most individuals account for Amazon’s success charges, only a few new sellers think about the prices of delivery items to Amazon’s warehouse.
Getting your items to Amazon can really be fairly costly!
What makes issues worse is that Amazon typically forces you to ship your items to a number of warehouses throughout the nation.
For instance, if you create a cargo on Seller Central, Amazon might ask you to ship your items to California, New York and Texas!
To fight these prices, you need to keep away from delivery items by way of UPS or different courier providers as a result of it’s tremendous costly.
Instead, you need to ship full containers and LCL freight immediately into Amazon or use LTL if you happen to can.
There is one fast tip that I’d prefer to share that may prevent on prices when Amazon asks you to ship to a number of warehouses.
Instead of splitting up your cargo for every warehouse, merely ship your entire stock to a single warehouse to start with. Then, when you get your subsequent cargo in, ship it to the following warehouse and so forth.
In normal, Amazon doesn’t care if you ship to all of their warehouses so long as your product ultimately reaches each.
Cost #2: Returns And Damaged Goods
Because Amazon makes it really easy for a buyer to make a return, you’ll expertise a a lot larger return price promoting on Amazon versus your individual on-line retailer.
For instance, our Amazon return price is well 3X that of our ecommerce retailer.
Also, sure product classes on Amazon have a a lot larger return price than others. If you promote clothes, it is best to anticipate over 20% of your gross sales to be refunded.
What sucks is that it doesn’t matter what, you continue to must eat the Amazon FBA and referral payment for the sale!
In addition, you might not be capable to re-promote the returned objects as “new” if the shopper opens or tampers with the product earlier than returning it.
One yr, an Amazon buyer bought many dozen napkins from us, used them for a celebration after which returned the dirty napkins for a full refund.
Well guess what? We needed to eat the Amazon referral payment, the Amazon FBA payment and the price of items since they might not be resold!
As outcome, if you happen to promote a extremely returned product like clothes on Amazon, you could bear in mind the return price in your calculations!
As merchandise are returned, it is best to monitor every SKU’s return price and in addition the writeoffs associated to stock and Amazon charges.
Cost #three: Advertising And Amazon PPC Ads
Once you record your objects on Amazon, they aren’t going to promote on their very own. You must promote utilizing Amazon PPC!
Editor’s Note: Make certain you try my information on How To Run Amazon PPC Sponsored Product Ads – A Step By Step Guide
When you first launch your product, your promoting prices might nicely exceed your entire revenues!
In the lifetime of your Amazon product, you may be constantly spending cash on Amazon PPC, Facebook advertisements, Google advertisements and different promotional mechanisms.
As you might be calculating your Amazon charges, it is best to allocate at the least 20% in direction of promoting your merchandise on the market.
Here are another posts that I’ve written on promoting
Cost #four: Overhead For Running Your Business
When you run any enterprise, there’s going to be some quantity of overhead. The excellent news is that operating an ecommerce enterprise carries a lot decrease oblique prices than a brick and mortar retailer.
The most typical overhead related to an Amazon enterprise are as follows.
- Photography – You might want to take prime quality images of your merchandise which can require the providers of a photographer
- Sellers Permit – Because you will want to pay gross sales tax, you will want to pay for a Sellers Permit in each state the place Amazon has a warehouse.
- Product Liability Insurance – While Amazon technically requires product legal responsibility insurance coverage to promote of their market, they aren’t implementing this simply but. But it’s in your greatest pursuits to get insurance coverage to guard your self in case you get sued.
- Business Structure – To restrict your legal responsibility, it is best to type an LLC or company.
- Trademarks – Once you begin promoting on Amazon, it would be best to register your model which would require a trademark.
- Intermediate Warehouse Costs – Even although you may be utilizing Amazon FBA for success, it’s possible you’ll need to have your items despatched to a processing middle to label or to carry out high quality management on your items earlier than they’re despatched to Amazon.
To deal with the above prices into your calculations, it is best to add up your entire overhead prices for the previous 12 months and divide that sum by the variety of items you offered throughout the identical interval.
Then issue this quantity into your general prices of promoting on Amazon.
Cost #5: Amazon Will Screw Up And Cost You Money
The largest draw back to promoting on Amazon is that they screw up VERY typically and until you might be paying consideration, you’ll lose cash.
Below are some prices that 99% of name new sellers by no means think about once they begin promoting on Amazon.
Note: I classify these “hidden expenses” underneath the price of doing enterprise on Amazon.
Because it’s so straightforward for a buyer to make a return on Amazon, you’ll obtain a bunch of them throughout your lifetime as an Amazon vendor.
The downside is that when a buyer returns considered one of your merchandise to Amazon, Amazon instantly refunds the shopper however typically they neglect to pay you again!
Unfortunately, this occurs on a regular basis and you actually must maintain monitor of your funds or use a third occasion service to find when this occurs and recuperate your cash.
The different factor that sucks about promoting on Amazon FBA is that now and again Amazon mysteriously loses your cargo.
Sometimes, components of your cargo get broken on the best way to Amazon’s success middle.
Sometimes, Amazon outright loses your merchandise!
Even although Amazon will reimburse you for misplaced product, it’s important to be the one to level out a misplaced cargo as a result of Amazon received’t inform you by default.
One time, Amazon misplaced a number of containers of our items and we had been reimbursed for the stock. However three months later, they lastly discovered our items after which promptly deducted the reimbursement quantity from our account.
Meanwhile, we misplaced three months price of gross sales and had nothing to indicate for it!
Overall, it’s important to watch Amazon like a hawk and also you all the time must verify and double verify that the amount acquired at Amazon matches the amount that was despatched.
Is Amazon FBA A Ripoff?
With all the Amazon charges that I described above, you might be in all probability questioning whether or not it’s nonetheless price it to promote on Amazon utilizing FBA.
Most individuals blindly promote on Amazon FBA and assume that storing your merchandise in Amazon’s warehouse is a big cut price.
But sadly, that’s not the case.
Many years in the past, Amazon was less expensive however immediately, they’ve elevated their storage charges so considerably that it now exceeds that of a 3PL.
For instance, Whiplash Merch expenses solely a $.45 per cubic foot storage payment in comparison with Amazon’s $.68 per cubic foot (and $2.40 from Oct-Dec). The prices don’t rise over the vacations both.
As you utilize the Amazon payment calculator, be sure you examine the numbers to a conventional 3PL to see if it is smart to maintain your stock there and ship your items to Amazon in smaller batches.
Do You Know Your True Profit?
As you’ll be able to inform from this put up, there are many elements concerned in calculating your true Amazon charges.
And one of the vital duties to get proper is to work out your true profitability in any case bills.
Make certain you do your evaluation BEFORE you begin sourcing merchandise to promote and BEFORE you begin promoting on Amazon.
Remember, most Amazon sellers are shedding cash as a result of they don’t bear in mind the hidden prices.
Overall, the commonest methods to save cash on Amazon charges are to do your homework upfront and attempt to forestall your self from storing an excessive amount of product in Amazon’s warehouse at any time.
Frequently Asked Questions About Amazon Fees
How Much Are Amazon Fees?
It relies on which promoting plan you select. Serious sellers pay $39.99/month as an expert vendor. For a typical sale, Amazon will take a 15% minimize of your income. If you might be utilizing FBA, Amazon will typically take one other 10-15% relying on the dimensions and weight of your merchandise. All advised, Amazon roughly takes a 3rd of your gross sales in charges.
How Much Is Amazon FBA Per Month?
For a private vendor account, there isn’t a month-to-month payment. However, you’ll pay a $1.00 flat payment on all Amazon FBA merchandise which might be offered. Otherwise, an expert vendor account prices $39.99. If you promote greater than 40 objects per 30 days, an expert vendor account is price it.
What Is Amazon’s Commission?
The fee varies broadly by class. But typically, anticipate to pay 15%
Is It Cheaper To Sell On Amazon Or Ebay?
Ebay expenses a 10% fee whereas Amazon expenses 15%. However, if you happen to bear in mind Paypal charges that are 2.9%, it finally ends up being pretty shut. All advised promoting on Ebay is cheaper.
How Do I Reduce Amazon Fees?
The largest value of Amazon FBA is storage and the price of getting product to Amazon’s warehouse. Ideally, it is best to ship your items direct to Amazon out of your provider and take a look at to not maintain an excessive amount of stock available.
How Much Does It Cost To Start Amazon FBA?
There are not any minimums to promote on Amazon. As a outcome, you can begin promoting with only a few items of product. With a private vendor account, there are not any month-to-month charges both.
How Much Are Amazon Storage Fees?
From January to September, the charges are $.75 per cubic foot. But this will increase to $2.40 per cubic foot from October to December. For outsized objects, it prices $.48 per cubic foot and will increase to $1.20 from October to December.
Is It Profitable To Sell On Amazon
The reply is sure if you happen to can keep a gross margin of over 50%