Amazon FBA fees explained: what comes off each sale
The price a buyer pays on Amazon is not the money you receive. Between the two sit several fees and taxes, and leaving any of them out makes a product look more profitable than it is. Here is what comes off a typical FBA sale, in the order it happens.
VAT
Marketplace prices include VAT. If you are VAT-registered under the standard scheme, the VAT in the selling price is owed to the tax office, and you reclaim the VAT you paid on your stock. On the flat-rate scheme you pay a fixed percentage of the gross sale and reclaim nothing. If you are not registered, VAT does not appear in your sums at all. The difference between these three can turn a profitable product into a loss, so use the one you are actually on.
Referral fee
Amazon charges a percentage of the selling price, set by category, usually between 7% and 15%, with a minimum fee per item. It is charged on the VAT-inclusive price.
Fulfilment fee
For FBA, Amazon charges to pick, pack and ship each unit. The fee depends on the size tier and the weight of the package, so you need the packaged dimensions and weight to work it out. Without them, the honest answer is "unknown", not zero.
Storage and other costs
Monthly storage is charged by volume, and rises in the last quarter of the year. Add your own costs too: shipping stock to Amazon's warehouse, prep and labelling, and anything you pay per unit before it arrives.
What is left
Selling price, minus VAT due, minus referral, minus fulfilment, minus storage, minus your landed cost per unit, equals your profit per unit. Divide profit by your cost for your return on investment, and by the selling price for your margin.
Two habits that save money
- Re-check fees when Amazon publishes new fee schedules - they change every year.
- Judge a product at the Buy Box price it sells for now, not the list price, and decide your minimum return before you look at the answer.