Amazon FBA Fees Explained

Today we’re gonna talk about Amazon FBA fees and I’m gonna break it down for you so this is really important because if you don’t know how much you’re paying on Amazon then you don’t really know what your true profit margins are and this is a crucial step to the product selection process so let’s jump into it with the first fee being the Amazon referral fee so the referral fee is basically like you know you’re selling on Amazon they’re providing you this platform to sell on where you have access to a ton of customers and so they want to get a cut of that and they’re gonna take 8 to 15 percent of your earnings so that is quite high and if you compare that to what you would be selling on your website or on Shopify or perhaps another platform it can be as high as 10% more by selling on Amazon now you might say well 10% that’s that’s a lot more but you know what a you have to look at the advantages of selling on Amazon and really the advantages outweigh that 10% so you’ve got access to a ton of

customers you’ve got access to prime shipping so by becoming a professional seller you can now ship with Amazon Prime which means two days shipping which is a huge advantage to a lot of customers and a lot of people shopping on Amazon they will look for sellers who are eligible for prime shipping because why would you want faster shipping so you got a lot of perks and it’s well worth 10% second fee is the Amazon FBA fees now this is composed of both variable and in variable fees the in variable fees are the order handling fee which is one dollar and the pick and pack fee which is a dollar and six cents so those are two invariable fees the variable fees are the weight handling fee so this is going to really depend on your product weight in product day dimensions when you’re sourcing a product what you can do is you can use the Amazon FBA fee calculator I highly recommend this tool I’ll link it here for you but I’ll also link it for you in the description this is is accurate as you’re gonna get before you’re actually selling the product itself and this is gonna help you calculate what your fees would look like so for example my product I sell at about 61 dollars on Amazon and my FBA

fees plasmon referral fees equal to about $15 so it’s $15 at Amazon takes out of my cell so the next we are gonna encounter are the storage fees so when you ship your app your inventory to the Amazon warehouse they’ve got a store your inventory until it sells so those in storage fees are gonna depend on the product dimensions and the product weight but after six months if your products haven’t sold you’re gonna start to encounter these long term storage fees long term storage fees are $11.25 per cubic foot and if you still don’t sell after one year Amazon doubles those fees to $22.50 so keep that in mind don’t over stock on Amazon I would suggest having two months supply of inventory and nothing more

one thing you could also do is if you see that you’re approaching that

six-month mark you can say okay maybe it’s time to do an inventory removal so this is something that you can do on your seller central account you

basically can ship all your inventory to your house or wherever you want and Amazon’s not gonna charge you the referral fee just like the shipping charge so that’s a good option if you see that you just have an overstock of inventory at the Amazon warehouse the next V is a closing fee the closing fee only applies to media products so probably most people aren’t going to encounter this fee now there is a fee that everybody pays as a professional seller and that’s $40 per month for the professional selling plan this is basically just a monthly charge it comes out of your earnings so it’s not like you get charged separately on your credit card usually if you make like a hundred dollars you’ll end up getting paid sixty dollars because the $40 fee will come out of that hundred dollars however if you haven’t made any sales then yeah they’re gonna charge your credit card the $40 now you can get a non professional selling pad on a personal selling planner you can still sell on Amazon which is good to start that way perhaps but if you’re selling more than 40 units a month it doesn’t make sense because Amazon’s gonna charge you $0.99 per unit on a personal selling plan so it only makes sense to be there if you’re selling like 10 20 30 units per month but if you’re really gonna be selling more than it just

makes sense to jump up to the

professional selling plan now last thing I want to know is that when you are having someone place to return on Amazon don’t worry because Amazon’s gonna give you back the referral fees so if someone returns an item you’re gonna get back the referral fee but you still have to pay a fee which is the shipping and handling so that’s the FB fees that’s gonna come out of your pocket because Amazon still had to ship the inventory to them it still had to find the

inventory in the warehouse pay people to do that so that’s something that

Amazon’s not going to pay out on their pocket so it’s got to come out of your pocket so just keep that in mind and also keep in mind that you know for some categories you have to be very careful with returns for example the clothing category all clothing must be new condition new condition means it’s brand new and packaging hasn’t been opened if someone buys something on Amazon it gets sent to their house they open it and they decide I don’t want it anymore even though they never wore it even though they never took it out of the packaging if it left the warehouse it’s not considered new anymore just like when you buy a new car from the lot if you just drive it off with a lot just for five minutes

it’s not new anymore so you have to remember that and once it gets sent back to Amazon Amazon that’s gonna say well we can’t sell this because it’s not a new condition so that could be potential inventory that’s lost and money that goes down the drain so just be aware of that so the last thing that you just want to consider is that when you ship your inventory to Amazon of course there are shipping fees and that’s just going to depend like if you’re shipping straight from China to Amazon that’s you know one fee all the way by boat or by air but if you’re shipping from China to your house in the States from your house in the States to Amazon those are two shipping fees so you’re paying from shipping from China to your house and then from your house to Amazon so your paint shipping twice and you want to make sure that you remember that because sometimes what we do is we just go into Amazon we just calculate the Amazon FBA fees and the Amazon referral fees but we forget about our shipping cost so if you’re paying $200 to ship from your house to the Amazon warehouse take note of that and include that into your calculations for your product fees because I don’t know why but people free about that they forget that they paid that and then they don’t realize it where all my profits going so keep that in mind and those are basically all the fees so hopefully this video was short and sweet for you guys if you have any questions about the Amazon FBA fees feel free to comment down below as usual if you want to learn how I source my products from Alibaba I have a free training video it’s 30 minutes long screen share where I’d share with you how I pick my suppliers how I find my suppliers just go to Lux health comm slash China and you’ll get the video sent to your email so I’ll see you in the next video and I’ll talk to you later bye

Leave a Reply

Your email address will not be published. Required fields are marked *