Amazon has become the world’s most powerful e-commerce platform, giving sellers unmatched access to a global customer base. One of Amazon’s most attractive offerings is its Fulfillment by Amazon (FBA) service. However, to truly take advantage of FBA, understanding its fee structure is crucial. This comprehensive 3000-word article is crafted for Coastal Distribution Group clients, wholesale distributors, and private label sellers to navigate Amazon FBA fees with clarity and confidence.

What Is Amazon FBA?

Fulfillment by Amazon (FBA) is a service that allows sellers only selling on amazon, to store products of seller in Amazon’s fulfillment centers. Amazon takes care of packing of products, shipping, customer service, and returns of products on behalf of the seller.

Benefits of Using FBA

• Prime eligibility (increased visibility and trust)
• Hands-off logistics
• 24/7 customer support
• Enhanced delivery speed

For clients of Coastal Distribution Group, combining 3PL warehousing with Amazon FBA offers a hybrid fulfillment strategy that maximizes efficiency and profitability.

Overview of Amazon FBA Fees

Amazon FBA fees for sellers are categorized into several types:

1. Fulfillment Fees
2. Storage Fees
3. Referral Fees
4. Optional Service Fees
5. Returns Processing Fees
6. Removal & Disposal Fees
7. Unplanned Service Fees

Each fee affects your bottom line differently and should be considered when pricing your products.

Fulfillment Services Fees

These are charged per unit sold and include picking of sold products, packing, shipping of sold products, customer service on behalf of seller, and returns.

Example – Standard Size Items (as of 2024):

• Small standard w.r.t size (6 oz or less): $3.22
• Large standard w.r.t size (6 to 12 oz): $3.42
• 1 to 2 lb: $4.03

Oversize Items:

• Small oversize w.r.t size: $9.73 + $0.38/lb over 2 lb
• Large oversize: $75.78 + $0.79/lb over 90 lb

Coastal Distribution Group helps reduce these fees by prepping and labeling inventory to avoid unplanned service charges.

Monthly Storage Fees

Amazon charges storage fees for products in its warehouse:

Standard Size Items:

• January–September: $0.87 per cubic foot
• October–December: $2.40 per cubic foot

Oversize Items:

• January–September: $0.56 per cubic foot
• October–December: $1.40 per cubic foot

For high-volume sellers, Coastal Distribution Group offers bulk storage solutions and forward stocking to lower these costs.

Long-Term Storage Fees

Items stored for over 365 days incur additional charges:

• $6.90 per cubic foot OR
• $0.15 per unit (whichever is greater)

Pro Tip: Use inventory forecasting tools and work with Coastal Distribution Group to avoid unnecessary long-term storage penalties.

Referral Fees

Amazon takes a commission may be different for each category on every sale, known as the referral fee.

Ranges for Sales commission from 6% to 45%, depending on the category.

Examples:

• Beauty: 8%
• Electronics: 8%
• Grocery: 15%
• Clothing: 17%

Referral fees are unavoidable, but with better pricing, packaging, and targeting (as offered by Coastal Distribution), you can increase your net profit margins.

Returns Processing Fees

If Amazon provides free return shipping to customers, sellers pay a return fee equal to the original fulfillment fee.

This mostly applies to:

• Apparel
• Shoes
• Watches

Example:
If your fulfillment fee is $3.48 first time hosting product, you will be charged $3.48 again for a return.

Removal & Disposal Fees

To remove unsold or excess inventory, Amazon charges:

• Standard size: $0.97 per unit (removal), $0.85 (disposal)
• Oversize: $2.00+ per unit

Pro Tip: Store slow-moving items in Coastal Distribution Group’s warehouse and send to FBA only when sales velocity increases.

Unplanned Service Fees

When inventory arrives at Amazon unprepared (e.g., missing labels), fees apply:

• Labeling: $0.55 per unit
• Bagging, bubble wrap, taping: $0.50–$1.00 per unit

Avoid these by letting Coastal Distribution Group handle all FBA prep and compliance.

FBA Small and Light Program

Ideal for products under 3 lb and priced under $10.

Fulfillment fees:

• Items up to 3 oz: $2.47
• Items 3 to 6 oz: $2.63
• Items 6 to 12 oz: $2.84

Sellers can significantly reduce costs through this program. Coastal Distribution Group can help identify qualifying SKUs.

Dangerous Goods and Hazmat Fees

FBA charges higher fees for hazardous materials:

• Flammable, pressurized, or chemical-based products

Additional storage & shipping restrictions apply.
Work with Coastal Distribution to ensure compliant packaging and documentation.

New Seller Fee Incentives

Amazon periodically offers:

• Free storage for first 90 days
• Discounted fulfillment
• Waived removal fees

Ask Coastal Distribution Group how to take advantage of current programs for new sellers.

FBA Fee Calculator and Real-Time Estimates

Use Amazon’s Revenue Calculator or partner tools to estimate your FBA fees based on:

• Dimensions
• Weight
• Category
• Shipping method

Coastal Distribution clients can access custom dashboards to track profit margins across multiple fulfillment centers.

How Coastal Distribution Group Minimizes FBA Costs

1. Inventory Staging: Store bulk inventory at Coastal’s Texas warehouse and forward only what’s needed to Amazon.
2. FBA Prep Services: Labeling, poly bagging, bundling
3. Demand Forecasting: Smart replenishment planning
4. Returns Handling: Receive, inspect, and restock
5. Multi-Channel Fulfillment: Ship to Shopify, Walmart, or TikTok from Coastal to reduce over-dependence on FBA

Conclusion

Understanding Amazon FBA fees is crucial for eCommerce success. For Coastal Distribution Group clients, these costs are manageable through strategic inventory planning, hybrid fulfillment models, and expert FBA prep services.

To scale efficiently while minimizing fees, trust Coastal Distribution Group as your warehousing and logistics partner.