Amazon FBA Fees 2024 and the Challenges Involved: Understanding the True Cost of Selling on Amazon

Is selling on Amazon FBA still worth it in 2024 despite the Amazon FBA fees? Find out in this guide.

Amazon FBA offers perks like Prime access, streamlined shipping, and hassle-free returns, making it an attractive option for sellers. However, these conveniences come with a variety of fees that can significantly impact your profit margins if not carefully managed.

Beyond the obvious costs, sellers also face challenges related to hidden and unexpected fees, such as long-term storage and unplanned service fees. This article will explore Amazon FBA fees in detail and the financial obstacles they create for sellers.

Additionally, we’ll discuss strategies for reducing these fees and maximizing profitability. Let’s dive in and discover if Amazon FBA remains a profitable option in 2024 despite the associated costs.

What is Amazon FBA?

Amazon FBA (Fulfillment by Amazon) is a service that allows sellers to outsource their storage, shipping, and customer service operations to Amazon. With FBA, sellers send their inventory to Amazon fulfillment centers, where Amazon handles storing the products, packing orders, and shipping them to customers.

When an order is placed, Amazon picks, packs, and ships the item directly to the customer. They also manage customer inquiries, returns, and refunds, making the process hassle-free for sellers. This service allows sellers to focus on growing their business while Amazon handles logistics.

Amazon FBA Fees Breakdown (2024)

Amazon FBA fees refer to the various charges that Amazon imposes on sellers who use its Fulfillment by Amazon service. These fees cover everything so knowing about them is essential for any seller because they can directly impact the profit margins and overall strategy of an Amazon FBA business.

Below are the fees associated with selling on Amazon:

FBA Fulfillment Fees

Fulfillment fees are the charges Amazon imposes per unit for picking, packing, and shipping items on behalf of sellers. These fees are calculated based on the size, weight, and category of the product.

In 2024, Amazon introduced new size tiers and rate adjustments to better reflect the varying costs of fulfillment, making it essential for sellers to stay updated on these changes as they can significantly affect profitability.

Size Tier Shipping Weight Fulfillment Fee (Feb 5 - Apr 14, 2024) Fulfillment Fee (Apr 15, 2024)

Small Standard
(4 oz)

4 oz or less

$3.22

$3.06

Small Standard
(4 oz)

12+ to 16 oz

$4.75

$4.55

Large Bulky
(50 lbs)

0 to 50 lbs

$9.73 + $0.42/lb above first lb

$9.61 + $0.38/lb above first lb

Extra-Large
(70 lbs)

50+ to 70 lbs

$40.12 + $0.75/lb above 51 lbs

$40.12 + $0.75/lb above 51 lbs

Unplanned Service Fees

Unplanned service fees occur when a shipment does not meet Amazon FBA prep, labeling, or packaging requirements. Amazon has kept these fees largely unchanged in 2024, but it’s essential to avoid these fees by ensuring compliance with FBA’s packaging guidelines.

Problem Fee per Unit (Standard) Fee per Unit (Elevated) Fee per Unit (Critical)

Label Missing

$0.20

$0.40

$0.40

Unplanned Prep
(Taping)

$0.20

$0.40

$0.40

Unplanned Prep
(Bagging)

$0.70

$1.40

$1.40

Unplanned Prep
(Bubble Wrap)

$1.00

$2.00

$2.00

Monthly Inventory Storage Fees

Amazon charges monthly storage fees based on the volume of your inventory stored in fulfillment centers. The fees during the holiday season (October to December) saw a slight increase in 2024.

Storage Period Standard-Size Items Oversize Items

January – September

$0.87 per cubic foot

$0.56 per cubic foot

October – December

$2.40 per cubic foot

$1.40 per cubic foot

Long-Term Storage Fees

Long-term storage fees apply to items stored for over 365 days. Though unchanged in 2024, these fees can accumulate quickly, especially for slow-moving inventory.

Storage Duration Fee per Cubic Foot

Over 365 Days

$6.90 per cubic foot

Inventory Storage Overage Fees

Amazon introduced Inventory storage overage fees in 2023, and the structure continued through 2024. These fees are charged when a seller’s inventory exceeds the storage capacity limits Amazon assigns to their account.

Even if the seller reduces the excess FBA inventory later, they will still be charged for the days during which their inventory was above the limit. These fees are calculated based on the volume of overstock and can add up quickly, making it crucial for sellers to monitor their inventory levels closely.

Overage Metric Fee Calculation Example Value

Overage Volume

Volume exceeding capacity limit

100 cubic feet

Daily Overage Rate

$10 / cubic foot per month

$0.33 per day

Charged Fee Amount

Overage Volume x Daily Overage Rate

$33.00

Low-Price FBA Fees

Low-Price FBA offers reduced fulfillment fees for products priced under $10. This special rate remains in place for 2024, helping sellers lower costs for lower-ticket items.

Size Tier Shipping Weight Fulfillment Fee (Feb 5 - Apr 14, 2024) Fulfillment Fee (Apr 15, 2024)

Small Standard
(2 oz)

2 oz or less

$2.45

$2.29

Large Standard
(12 oz)

12+ to 16 oz

$3.98

$3.78

Low Inventory Level Fees

Amazon charges a low inventory level fee when your stock falls below 28 days of supply, encouraging sellers to maintain sufficient inventory levels.

Inventory Level Fee per Unit (2024)

Below 28 days

$0.36 – $1.00

Referral Fees

Referral fees are a percentage of each sale and vary by product category. This fee is automatically deducted from the sale price.

Product Category Referral Fee (2024)

Electronics

8%

Apparel

17%

Jewelry

20%

Media Products

15%

Other Categories

6% – 45%

Fulfillment Fees for Dangerous Goods

Items classified as dangerous goods require special handling, leading to higher fulfillment fees. These items include batteries, flammable goods, and aerosols.

Size Tier Shipping Weight Fulfillment Fee (Feb 5 - Apr 14, 2024) Fulfillment Fee (Apr 15, 2024)

Small Standard

2 oz or less

$3.42

$3.26

Large Standard

12+ to 16 oz

$4.57

$4.37

Large Bulky

0 to 50 lbs

$9.71 + $0.42/lb above first lb

$9.56 + $0.38/lb above first lb

Extra-Large

50+ to 70 lbs

$42.56 + $0.75/lb above 51 lbs

$42.56 + $0.75/lb above 51 lbs

Returns Processing Fees

Amazon applies a returns processing fee for certain categories, and this includes fees for apparel and footwear, which are among the most impacted. Sellers selling products in these categories must factor in these costs when using FBA, as higher return rates can significantly affect profitability.

In 2024, these fees increased slightly, further emphasizing the need for sellers to manage returns efficiently to minimize potential losses.

Category Return Fee (2024)

Apparel

+$0.10

Footwear

+$0.15

Removal or Disposal Fees

Removal and disposal fees are charged when sellers request Amazon to either return unsold inventory from their fulfillment centers or dispose of it. These fees are typically used when products are no longer sellable or need to be removed to avoid long-term storage costs.

As of February 5, 2024, these fees have been updated, slightly increasing the cost per unit for both standard-size and bulky items, making it essential for sellers to manage inventory more efficiently.

Size Tier Shipping Weight Removal or Disposal Fee (Feb 5 - Apr 14, 2024) Removal or Disposal Fee (Apr 15, 2024)

Standard-size

0 to 0.5 lb

$0.97

$1.04

Standard-size

0.5+ to 1.0 lb

$1.46

$1.53

Standard-size

1.0+ to 2.0 lb

$2.20

$2.27

Large Bulky/ Extra-Large

0 to 1.0 lb

$3.12

$3.12

Large Bulky/ Extra-Large

4.0+ to 10.0 lb

$9.43

$10.04

Large Bulky/ Extra-Large

More than 10 lb

$13.05 + $1.06/lb above 10 lb

$14.32 + $1.06/lb above 10 lb

Liquidation Fees

Liquidation fees are charged when sellers choose to liquidate unsold or excess inventory through Amazon’s liquidation program. This process allows sellers to recover a portion of their investment by selling items at a reduced price.

The fee consists of two parts: a liquidation referral fee, which is a percentage of the recovery value, and a processing fee based on the item’s size and weight. In 2024, these fees have remained unchanged, continuing to offer an alternative for sellers looking to avoid higher removal or disposal fees.

Size Tier Shipping Weight Liquidation Processing Fee per Unit

Standard-size

0 to 0.5 lb

$0.25

Standard-size

1.0+ to 2.0 lb

$0.35

Large Bulky/ Extra-Large

0 to 1.0 lb

$0.60

Large Bulky/ Extra-Large

10.0+ lb

$1.90 + $0.20 per lb above 10 lb

Challenges Sellers Face with Amazon FBA Fees

Sellers continue to grapple with increasing Amazon FBA seller fees, creating significant challenges in managing their Amazon businesses on the platform. Rising FBA fees, along with new charges like low inventory fees, are putting a strain on profitability.

These fees have sellers constantly adjusting their strategies to stay competitive while facing a barrage of challenges. Let’s dive into the key difficulties that sellers are currently facing with Amazon FBA fees.

1. Unforeseen and Hidden Costs

Unexpected fees like prep services, labeling, and fulfillment center transfers can quickly erode margins. Sellers are often blindsided by these costs, making it difficult to predict expenses accurately.

2. Eroding Profit Margins

Rising fulfillment and low inventory fees are steadily eating into profit margins. Some sellers face thousands in fees annually, forcing them to raise prices or reconsider certain products.

3. Low Inventory Fees

Low inventory fees are applied when stock falls below 28 days of supply, creating challenges for seasonal and end-of-life products. Sellers may be penalized for circumstances beyond their control, such as supply chain delays.

4. Balancing Inventory and Storage Costs

Sellers must strike a delicate balance between overstocking, which leads to high storage fees, and understocking, which incurs low inventory fees. Delays outside their control, like shipping issues, exacerbate this problem.

5. Managing Returns and Their Costs

Returns processing fees and the lack of reimbursement for customer-damaged items further reduce profitability. Sellers bear the cost of unsellable returns, adding to their financial burden.

6. Competing with Non-FBA Sellers

Non-FBA sellers avoid various fees, allowing them to offer lower prices. FBA sellers struggle to remain competitive while covering rising fulfillment and storage costs.

7. Lack of Transparency and Support

Amazon’s fee structure lacks transparency, and Seller Support often provides unclear or unhelpful answers. This makes it difficult for sellers to navigate and manage their costs effectively.

How to Reduce Amazon FBA Costs

Reducing Amazon selling costs has become a critical priority for sellers as fees continue to rise. With increases across fulfillment, storage, and returns, sellers must adopt smarter strategies to protect their profit margins.

Here are practical ways to minimize FBA charges, with insights from our detailed research and seller experiences:

1. Optimize Packaging and Product Size

Amazon’s FBA fees are based on an item’s weight and size. Reducing the packaging size can significantly lower fulfillment fees. Optimize your product packaging to minimize both weight and dimensions, ensuring you’re not paying more than necessary.

2. Bundle Complimentary Products

Bundling similar or complementary items can allow you to pay fulfillment fees for one unit instead of multiple products. Bundled products can also improve visibility on Amazon and drive sales through promotions, making this strategy beneficial for both reducing fees and boosting sales.

3. Remove Underperforming Products

Aged inventory can lead to hefty long-term storage fees. Regularly assess your inventory and remove or discount slow-moving items. This will help you avoid high storage costs and free up space for faster-selling products.

4. Utilize Amazon Outlet

Selling overstocked or slow-moving products on Amazon Outlet can help clear out inventory while avoiding storage fees. Amazon Outlet offers customers discounts, helping you move products faster without taking a major hit to your margins.

5. Automate Inventory Management

Automating your inventory management can prevent overstocking or understocking, both of which can lead to unnecessary fees. Tools that monitor inventory levels and sales velocity help you maintain optimal stock levels and avoid long-term storage or stockout penalties.

Automation ensures you stay efficient and saves time while reducing human errors. Our Amazon agency recommends using Veeqo for this and below is a video guide showing why:

6. Use the FBA Export Program

Expand your market internationally by enrolling in the FBA Export Program. Amazon will handle international shipping at no additional cost, allowing you to reach global customers without incurring high shipping expenses. This can increase your sales potential while keeping your costs low.

7. Create a Shipping Plan

By carefully planning where your inventory is shipped, you can avoid unnecessary fees associated with multiple fulfillment centers. A well-crafted shipping plan will ensure your products are stored in the most optimal locations, reducing transfer costs and improving fulfillment efficiency.

8. Monitor IPI Storage

Maintaining a high Inventory Performance Index (IPI) score helps you avoid long-term storage fees. By monitoring and improving your IPI, you’ll ensure your products are sold quickly, reducing the chance of being charged for excess inventory that’s stored too long.

9. Use Clearance Sales

To quickly sell off aged inventory and avoid long-term storage fees, run clearance sales. Offering discounts for slow-moving products can help free up storage space and reduce the financial impact of holding onto unsellable stock.

10. Use Amazon’s Advertising Tools

Boost your sales velocity through Amazon PPC ad campaigns (e.g., Sponsored Products, Sponsored Brands). Effective advertising can prevent inventory from lingering in fulfillment centers, reducing long-term storage costs. It also helps increase your product’s visibility and improves your overall ranking on the Amazon marketplace.

Frequently Asked Questions About Amazon FBA Fees

What are the different types of Amazon FBA fees?

Amazon FBA fees fall into several key categories:

  • Fulfillment Fees:
    Also known as "pick and pack" fees, these cover the cost of picking, packing, and shipping your products to customers. These fees vary based on the size, weight, and category of the item.

  • FBA Storage Fees:
    Monthly fees are charged based on the space your inventory occupies in Amazon’s fulfillment centers. This includes standard storage fees and aged inventory surcharges for items that remain in storage for too long.

  • Removal and Disposal Fees:
    These fees apply when you request to have your unsold inventory removed from Amazon’s fulfillment centers or disposed of.

  • Referral Fees:
    A percentage fee that Amazon takes on each sale, based on the total selling price of the product. The percentage varies by product category.

  • Return Processing Fees:
    Charged when a customer returns a product, typically equal to the fulfillment fee of the item.

  • Labeling and Prep Fees:
    These fees are incurred when Amazon has to label or prep your products to meet their fulfillment requirements.

How can I reduce FBA fees on Amazon?

There are several strategies to help reduce Amazon fees:

  • Optimize Product Dimensions and Weight:
    FBA fees are heavily influenced by the size and weight of your products. Ensuring your packaging is as compact as possible can reduce fulfillment fees.
  • Monitor and Manage Inventory:
    Avoid long-term storage fees by removing or discounting aged inventory. Regularly schedule inventory cleanups to ensure slow-moving stock is sold or removed before surcharges apply.
  • Bundle Products: By bundling multiple items into a single package, you can reduce the number of individual fulfillment fees.
  • Use Amazon's FBA Calculator:
    Before listing a product, use the FBA calculator to estimate fees and ensure your product has a healthy profit margin.
  • Automate Inventory Management:
    Leverage inventory management tools to ensure you have just the right amount of stock to avoid storage surcharges or out-of-stock situations.

Are there hidden costs in Amazon FBA?

While Amazon FBA fees are largely transparent, sellers can sometimes overlook or be surprised by additional costs, such as:

  • Long-Term Storage Fees:
    If inventory stays at a fulfillment center for more than 181 days, long-term storage fees are applied, which can significantly impact your profitability.
  • Removal and Disposal Fees:
    These fees are incurred when you request that Amazon remove or dispose of your unsold products, especially when you're trying to avoid long-term storage fees.
  • Return Processing Fees:
    For every product returned by a customer, Amazon charges a fee to process the return, which can add up quickly for products in categories with high return rates.
  • Prep and Labeling Fees:
    If your products don’t meet Amazon’s labeling or packaging requirements, you will be charged for prep or labeling services.
  • Inventory Placement Fees:
    If you prefer Amazon to send your inventory to a single fulfillment center rather than distributing it across multiple centers, you will be charged for this service.

What is an Amazon FBA fee calculator?

An Amazon FBA fee calculator is an essential tool that helps sellers estimate the fees they will incur when using Fulfillment by Amazon. This tool calculates various FBA costs, including fulfillment, storage, and referral fees, helping sellers understand their potential profit margins.

To reduce FBA costs, sellers can use the official Amazon FBA Revenue Calculator, which is available through Amazon Seller Central. This tool also allows sellers to compare costs between FBA and FBM.

Amazon Sellers Navigating Amazon Fees in 2024

Amazon FBA in 2024 remains a valuable tool for growing your business, but understanding the fees explained throughout this article is crucial for maintaining profitability. As an Amazon FBA seller, you must stay informed about the rising costs associated with storage, fulfillment, and returns.

By optimizing product packaging, managing inventory effectively, and leveraging Amazon’s tools, you can reduce these fees and boost profitability while benefiting from FBA’s advantages.

Are you having trouble with your Amazon FBA business? Contact our Amazon agency today!

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Kevin Sanderson, Digital Acquisition Manager - My Amazon Guy

Kevin Sanderson, Marketing and Partnerships Manager

Hi I’m Kevin, Marketing and Partnerships Manager at My Amazon Guy. We are passionate about helping entrepreneurs grow their online businesses and thrive on Amazon. Whether you’re looking to launch a new product or scale your existing business, we’re here to provide guidance and support every step of the way.

Reach us at +1 470-623-1951 Monday to Friday, from 9:00am to 5:00pm EST.