Understanding Amazon FBA storage fees is essential for every seller who uses the Fulfillment by Amazon (FBA) service to store and ship their products. Familiarizing yourself with the different types of Amazon FBA fees, like referral and fulfillment fees, and utilizing FBA fee calculators and tools can help you optimize your pricing and inventory management strategies.
- Understanding Amazon FBA storage fees is crucial for sellers to make better pricing and inventory decisions.
- Storage fees include monthly and aged inventory surcharge (previously known as the long-term storage fee) charges, which depend on the type of product, size, and time stored in Amazon’s fulfillment centers.
- Sellers can reduce storage fees and maximize profits by optimizing inventory management and utilizing fee calculators and tools.
Understanding Storage Fees
Amazon FBA storage fees are important for sellers when using Amazon Fulfillment’s service. In 2023, these fees can impact your business’s profitability, so you must know the charges associated with storing your inventory in Amazon fulfillment centers.
Amazon calculates its FBA storage fees based on the size and weight of your products and the time of year. The pricing structure is divided into two main categories: standard-sized items and oversized items. Monthly storage fees for standard-sized items from January to September are $0.87 per cubic foot; from October to December, they increase to $2.4 per cubic foot. For oversized items, the fees are lower, at $0.56 per cubic foot from January to September and $1.4 per cubic foot from October to December.
Be aware that the storage fees for dangerous goods are more expensive.:
Aged inventory surcharge storage fees are another consideration for your inventory within Amazon fulfillment centers. For items stored after 181 days, Amazon charges $0.69 per cubic foot starting from April 15, 2023, except for individual sellers, new sellers, and sellers with less than or equal to 25 cubic feet of daily volume.
To further understand your potential storage fees, Amazon provides an FBA revenue calculator to help you estimate your costs. You can input your product’s weight, dimensions, and category to obtain a detailed breakdown of the fees.
Here’s a quick summary of the key information regarding storage fees:
- Monthly storage fees change depending on the size of the products and the time of year.
- Standard-sized items have higher storage fees than oversized items.
- Aged inventory surcharge applies to items stored after 26 weeks.
- Amazon provides a calculator to help estimate your storage fees.
Different FBA programs, such as Amazon’s Small and Light program, can also impact storage fees, specifically designed for smaller, low-priced products. This program offers reduced fees in some areas, making it more appealing for specific product categories.
By understanding Amazon FBA storage fees, you can better plan your inventory management and budget accordingly to optimize your business’s financial performance. Remember that these fees can change over time, so always stay up-to-date on Amazon’s pricing policies.
FBA Storage Fee Calculation
To calculate the dimensional weight, you need to measure your product’s dimensions (length, width, and height) and multiply them. Then, divide the product by 139 for standard-sized items and assumes a minimum width and height of 2 inches for oversize items. The result is the dimensional weight of your product, and it should be given in pounds.
The unit weight of your product is simply its actual weight in pounds. Make sure to weigh your product, including any packaging, to determine the accurate unit weight.
Amazon FBA categorizes items into two main sizes: small standard and large standard. These sizes are determined based on the product’s dimensions and weight. To classify your product, please refer to the table below:
|Standard Tiers||Weight||Maximum Dimensions|
|Small standard||Up to 16 oz||15″ x 12″ x 0.75″|
|Large standard||Up to 20 lb||18″ x 14″ x 8″|
|Oversized Tiers||Weight||Maximum Dimensions|
|Small oversize||70 lb or less||60″ x 30″|
|Medium oversize||150 lb or less||108” (longest side)|
|Large oversize||150 lb or less||108” (longest side)|
|Special oversize||Over 150 lb||>108” (longest side)|
Products that exceed the maximum dimensions or weight of the large standard size are considered oversize. Oversize items have different storage fees and requirements than standard-sized items.
Now that you understand how to calculate dimensional and unit weights and identify the product size, you can determine your Amazon FBA storage fees. These fees are based on your product’s storage space in Amazon’s fulfillment centers. Storage fees vary depending on the item size and the time of year.
Amazon has two storage fee periods: January to September and October to December. The table below shows the storage fees for each period and size tier:
|Size Tier||Jan – Sep (per cubic foot)||Oct – Dec (per cubic foot)|
Remember that these FBA storage fees apply to items stored in Amazon’s fulfillment centers, and additional fees might apply, such as pick-and-pack or aged inventory surcharge fees.
Storage Fee Categories
Amazon FBA storage fees are divided into two main categories: standard size and oversize. Standard-size items weigh less than 20 pounds and have a combined length, width, and height of fewer than 18 inches x 14 inches x 8 inches. Among standard-size items, there are two further classifications: small standard-size and large standard-size.
- Small Standard-Size: Items with a length, width, and height not exceeding 15″ x 12″ x 0.75″.
- Large Standard-Size: Items with dimensions less than 18” x 14” x 8”.
These items are typically less expensive to store in Amazon fulfillment centers, as they occupy less space. Storage fees for standard-size items vary based on the time of year and the amount of occupied storage.
Oversize items are those that exceed the dimensions or weight requirements for standard-size classification. They can be further divided into three subcategories:
- Small Oversize: Items with dimensions less than 60″ x 30″.
- Medium oversize: Items with the longest side fewer than 108″ and length + girth less than 130 inches.
- Large Oversize: Items with the longest side fewer than 108″ and length + girth less than 165 inches.
- Special Oversize: Items exceeding 108 inches or weighing more than 150 pounds and length + girth over 165 inches.
Oversize items typically incur higher storage fees, as they require more storage space. Like standard-size items, fees vary based on the time of year and the amount of occupied storage.
Knowing the storage fee categories and their respective costs can help you plan and optimize your product offerings cost-effectively. If you mainly deal with standard-size items, your storage fees will be lower, maximizing your profit margins. However, this is not to discourage you from selling oversize items, as they can also bring significant returns, but be aware of the potential impact on your inventory storage fees.
Monthly and aged inventory surcharge Fees
When you use Amazon FBA, it’s essential to understand the storage fees associated with your products. There are two types of fees you’ll encounter: monthly storage fees and aged inventory surcharge fees (earlier known as long-term storage fees).
Monthly storage fees are charged for your products’ space in Amazon’s fulfillment center warehouses. These fees depend on the product’s size and weight and the time of the year. Generally, storage fees increase during the peak holiday season from October to December.
Aged inventory surcharge fees apply to units stored in an Amazon fulfillment center for more than 26 weeks (181 days). These fees are in addition to the monthly inventory storage fees, and you’ll need to be aware of them to manage your aged inventory effectively.
To help you understand the breakdown of storage fees, here’s a table outlining the charges:
Amazon performs inventory clean-ups on the 15th of each month. Any inventory in the fulfillment center for more than 26 weeks is charged this fee starting from $0.69 per cubic foot. Remove items before the next inventory cleanup date to avoid aged inventory surcharge fees.
When calculating your storage fees, bear in mind that certain factors may affect the cost:
- Logistics: The location of the fulfillment center and how well it is managed can impact storage fees.
- Categories: Different product categories may have varying storage fees based on specific requirements.
- Surcharge: Some items, such as oversized or dangerous goods, may incur additional fees.
- Returns: If you experience a high number of returns, you may see an increase in storage fees.
- Aging inventory: Monitor your aging inventory to avoid pricey fees.
- Aged inventory surcharge: You may incur additional charges if your inventory ages over a specific threshold.
In summary, understanding your storage fees is crucial when using Amazon FBA. By keeping track of your inventory and monitoring fees, you can optimize your fulfillment strategy and manage your costs effectively.
Factors Affecting Storage Fees
When understanding Amazon FBA storage fees, several factors play a significant role in determining the costs. This section explores these factors and how they affect your storage fees.
Weight: One of the primary factors affecting storage fees is the weight of your inventory. Amazon calculates storage fees based on the total weight of your products in their fulfillment centers. The heavier your products, the higher the fees you’ll pay for storage. Remember that this is not only the actual physical weight of the items but may also include the packaging materials used to protect and ship them.
Dimensional Weight: Another crucial element is the dimensional weight of your products, which considers both the size and weight of your items. It’s calculated by multiplying the package’s length, width, and height and then dividing by a standard divisor. Dimensional weight can sometimes significantly impact storage fees more than the actual weight, especially for large, bulky items that take up more space in the warehouse.
Channels: Storage fees can also vary based on the channels you choose to sell your products through. For example, selling a product through Amazon’s FBA program may result in different storage fees than using their Merchant Fulfilled Network. Be sure to consider the cost implications of each channel before making your decision, as it can directly impact your overall storage expenses.
Unit Weight: Lastly, the unit weight of your products adds to the storage fees calculation for FBA inventory. This considers the total weight of an individual unit, including the packaging and any necessary materials for the shipping process. Remember that items with higher unit weights may incur higher storage fees due to their bulkiness or the need for specialized handling and packaging.
By taking the time to understand how each of these factors plays a role in calculating Amazon FBA storage fees, you can better anticipate your expenses and optimize your inventory management strategy accordingly. Utilize this knowledge to make effective choices when selecting products to sell, preparing your items for shipment, and determining the best sales channels for your business.
Types of Amazon FBA Fees
When selling on Amazon using Fulfillment by Amazon (FBA), it’s important to understand the various fees associated with the service. In this section, you’ll learn about the different fees you’ll experience as an Amazon FBA seller.
Referral Fees: Amazon charges referral fees for each item sold through its platform. These fees are a percentage of the item’s price and vary depending on the product category. Some categories have a minimum referral fee, and referral fees can range from 6% to 45%.
Fulfillment Fees: Amazon FBA picks, packs, and ships your orders to your customers. In return, they charge fulfillment fees that cover the cost of these services. Fulfillment fees are based on the size and weight of the shipped products. There are separate fees for standard-size and oversized items.
Monthly Storage Fees: As an FBA seller, you’ll store your inventory in Amazon’s fulfillment centers. They charge monthly storage fees for holding your products. These fees are calculated per cubic foot of storage space and vary depending on the time of year. Non-peak storage rates are lower, while peak storage rates apply during the busy holiday season.
Example of Storage Fees:
- Standard-size items: $0.87 per cubic foot (January – September), higher during peak season
- Oversized items: $0.56 per cubic foot (January – September), higher during peak season
Aged inventory surcharge Fees: Amazon charges a fee for items stored in their fulfillment centers for an extended period. The aged inventory surcharge applies to items in the warehouse for 181 days or more, with some product categories being exempt (such as clothing, shoes, bags, jewelry, and watches). This fee is designed to encourage efficient inventory management and discourage excessive storage of slow-moving items.
Awareness of these various FBA fees will help you better understand the costs of selling on Amazon and allow you to optimize your business strategies accordingly.
FBA Fee Calculators and Tools
When dealing with Amazon FBA fees, having the right tools and calculators at your disposal is essential. These resources can help you better understand the cost structure and ensure you’re setting competitive and profitable product prices.
One useful tool to consider is the FBA Calculator Explained. This calculator provides a clear breakdown of the various fees associated with selling through Amazon FBA, such as fulfillment, storage, and referral fees.
Another excellent resource is the Amazon storage fees calculator, which the MarketGap Fee Estimator program provides. This calculator estimates monthly storage fees and displays the cost directly on the Amazon product page, making it easier for you to calculate expenses while researching products.
Here’s a brief overview of the main Amazon FBA fees that you should be familiar with:
- Fulfillment fees: Amazon charges a per-unit fee for picking, packing, and shipping items to customers. This fee depends on the product’s size, weight, and category. You can refer to Amazon’s rate cards to find specific product costs.
- Storage fees: Amazon charges storage fees for storing your inventory in their fulfillment centers. These fees are calculated based on your products’ cubic footage in Amazon warehouses. Storage fees may vary depending on the time of year (i.e., higher during peak seasons).
- Referral fees: Amazon levies a referral fee on each product sale, a percentage of the sale price (usually between 8% and 15% depending on the category).
In addition to these fees, sellers should note additional FBA charges, such as the FBA aged inventory surcharge fee for items stored between 26-39 weeks. As of April 15, 2023, this fee is $0.69 per cubic foot for standard items.
Utilizing these calculators and tools, you can better grasp your Amazon FBA fees, helping you optimize your pricing strategy and maximize profitability. Remember to frequently re-evaluate your fees to stay competitive in the ever-changing Amazon marketplace.
Reducing Storage Fees and Maximizing Profits
To reduce storage fees and maximize your profits using Amazon FBA, follow this guide considering disposal fees, commission, and marketing.
1. Efficient Inventory Management
Managing your inventory effectively is crucial for avoiding high storage fees. Keep track of your product stock levels, and replenish them only when necessary. This way, you’ll minimize the inventory in Amazon warehouses and reduce the chances of incurring Amazon storage fees.
2. Monitor Your Products’ Performance
Stay informed about your product’s performance in the market. By monitoring their sales and adjusting prices accordingly, you can improve inventory turnover rates and prevent paying unnecessary storage fees for slow-selling items.
3. Consider Disposal Fees
If certain items are not selling or have been in the warehouse for a long time, consider removing them from your inventory. Amazon disposal fees might be lower than the aged inventory surcharge fees you’d incur if your products don’t sell.
4. Optimize Sales and Marketing Efforts
Improve your sales and marketing strategies to boost the visibility and demand for your products, resulting in higher sales and lower inventory levels. A solid marketing plan includes keyword research, optimizing product listings, and running advertising campaigns.
|Types of Amazon FBA Fees||Description|
|Referral fees||A percentage of the sale price taken by Amazon|
|Fulfillment fees||Shipping and handling fees|
|Storage fees||Monthly fees based on the storage space used by your inventory|
To maximize profits, here are some tips to consider:
- Improve product listings with high-quality images and captivating descriptions
- Regularly update your inventory information
- Use Amazon advertising to target relevant customers
- Analyze customers’ feedback and reviews to adjust your strategy accordingly
As an Amazon FBA seller, being strategic with inventory management, understanding storage fees, and maximizing your marketing efforts will help you optimize your business operations and increase profits.
Handling Returns and Customer Service
With Amazon FBA, your returns processing and customer service are handled for you. By providing a seamless customer experience, you can focus on managing your e-commerce business more effectively.
When a customer returns an item, several factors determine if it’s unsellable. A product may be deemed unsellable due to customer damage or not meeting Amazon’s condition guidelines. For example, a product listed as new that’s returned used is now unsellable. Monitoring your returned items and adjusting your inventory as needed is crucial.
Amazon FBA storage fees are an essential aspect of your overall e-commerce costs. Here’s a breakdown of some of the crucial FBA fees you need to be aware of:
- Non-peak storage fees: $0.87 per cubic foot for standard-size items and $0.56 per cubic foot for oversized items. Non-peak storage fees apply from January to September.
- Peak storage fees: An increase in storage fees from October to December to account for the higher demand during the holiday season. ($2.4 for standard and 1.4 for oversized items)
- Aged inventory surcharge: This fee applies to items in Amazon warehouses for 26 weeks or more, excluding new sellers, individual sellers, and sellers with less than or equal to 25 cubic feet daily volume (according to Amazon).
Another benefit of FBA is the access to Amazon Prime customers, potentially leading to increased sales and a more extensive customer base. Prime customers often prefer purchasing products fulfilled by Amazon due to the fast shipping and excellent customer service they receive.
To ensure the best possible experience for your customers and your business, remember to closely monitor your return rates, inventory levels, and your Amazon fees. By staying on top of these factors, you can effectively manage your e-commerce business and stay competitive in the Amazon marketplace.
Denes, with 20 years experience in logistics, holds a Logistics Manager degree from Budapest’s Logistics Association and has penned a thesis on mobile devices. Venturing into e-commerce, Denes specializes in Fulfilled By Amazon and passionately educates others about Amazon selling techniques.