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Last updated on September 6th, 2023
Written by Ken Zhou
The Fulfillment by Amazon (FBA) service was launched in 2006 to streamline processes for both Amazon sellers and customers. Today, learning how to sell on Amazon FBA made sellers’ processes convenient and seamless while customers receive faster, more reliable shipping and delivery.
This article will give you an in-depth explanation of Amazon FBA and how you can use it to improve operations to increase sales and enhance brand awareness on Amazon.
Amazon FBA became the go-to solution for sellers who don't have their own logistics team, delivery trucks, and warehouses to store their products. The eCommerce shipping and logistics will take care of your deliveries, but it comes with a price. For a better understanding, here's the process:
More than half of third-party sellers use Amazon FBA. It shows how valuable and useful this service is. Below are the reasons why you should become an Amazon FBA seller:
You can access Amazon's high-end fulfillment centers, truck trailers, air freight, bicycle couriers, merchant vessels, and air drones. The Amazon workforce has years and years of experience and expertise you can take advantage of.
According to Statista, Prime subscribers spend an average of $1400 yearly compared to non-Prime members who only shell out $600 yearly. So, if you want to sell your products to this group of generous people, joining Amazon FBA gets you instant passes to be instantly qualified for Prime shipping.
The Buy Box is the most coveted space on the product detail page. It is the section where customers can quickly add items to their shopping carts. You can win the Buy Box if you're Prime-eligible because Amazon gives priority to them.
UPS, USPS, FedEx, and DHL Express are Amazon-partnered carriers. These shipping companies often grant Amazon discounted shipping rates. If you're an FBA seller, no need to negotiate to save on shipping fees because Amazon does it for you. Plus, your cargo is taken care of by reputable courier firms.
Amazon has several programs under FBA that you can "add on" to your current business strategy and help scale your business quickly, as follows:
Amazon doesn't charge anything when they ship the order to customers, but you must be aware of the following Amazon FBA fees so you can manage your expenditures wisely:
There are two types of seller plans you can choose from:
Both plans allow you to have access to Amazon FBA.
Amazon gets a commission for each item sold in their marketplace. It could be a flat fee of 15% or less. Referral fees are paid after the sale is made. Here is the current referral fee table:
Categories | Amazon deducts the greater of the applicable referral fee percentage or applicable per-item minimum referral fee. |
| Amazon Device Accessories | 45% |
| Baby Products | 3.5% for items price < $500 6.0% for items price between $500-$10008.0% for items price > $1000 |
| Books | 3.0% for items price < $300 4.5% for items price between $300 - $500 9.0% for items price between $500 - $100012.5% for items price > $1000 |
| Camera and Camcorder | 5% |
| Mobile Phones | 5% |
| Consumer Electronics | Televisions, Laptops and PCs - 6.0%Landline phones - 7.0% |
| Electronic Accessories | 17% |
| Furniture (Indoor and Outdoor) | 15.5% for items price < $15,00010% for items price > $15,000 |
| Home | Wallpapers - 11% Kitchen and Bath - 8.0% Security - 6% Waste and Recycling - 6% Other Categories -17% |
| Music | 6.5% |
| Musical Instruments | Keyboards - 5%Guitars - 8% Others - 7.5% |
| Office Products | 8.0% for items price < $1000 9.0% for item price >$1000 |
| Sporting and Gym Equipment | Sports Equipment - 6.0% for items price < $500- 8.0% for items price > $500 Gym Equipment - 9.0% for items price < $1000- 10% for items price > $500 |
| Toys and Games | Toys - 11% Video Games and Consoles - 9% Online Game Services - 2% |
Categories requiring approval
| Automotive | Vehicles - 2% Tires and Rims - 5% Parts - 11% Cleaning Kits - 9% Accessories - 16% |
| Beauty Products | Fragrance - 14% Body - 7.0% Makeup - 6.0%Luxury Beauty Products - 5% |
| Clothing | Accessories - 14% Shirts, Jackets, Shorts - 19% Baby Apparel - 14% |
| Jewelry | 22.5% for items price < $1000 24% for items price > $1000 |
| Grocery and Gourmet | 4.5% for items price < $500 5.5% for items price $500 - $1000 8.0% for items price > $1000 |
| Personal Health Care | 11% |
| Luggage and Bags | Handbags - 8.5% Suitcase - 5.5% Other Categories - 5.5% |
| Footwear | Shoes - 16% Kids Footwear - 15% Sandals and Floaters - 10.5% |
| Watches | 13.5% |
Amazon FBA fees consist of four different fees rolled into one, including the storage, packing, and handling of your inventory. The category, weight, and size of the item are also considered in the computation.
| Standard size items | Max dimensions | Item weight | Fulfillment fee (in USD) |
Small standard | 15" x 12" x 0.75" | 4oz or less | $3.22 |
| 4oz to 8oz | $3.40 | ||
| 8oz to 12oz | $3.58 | ||
| 12oz to 16oz | $3.77 | ||
Large standard | 18” x 14” x 8” | 4oz or less | $3.86 |
| 4oz to 8oz | $4.08 | ||
| 8oz to 12oz | $4.24 | ||
| 12oz to 16oz | $4.75 | ||
| 1lb to 1.5lb | $5.40 | ||
| 1.5lb to 2lb | $5.69 | ||
| 2lb to 2.5lb | $6.10 | ||
| 2.5lb to 3lb | $6.49 | ||
| 3lb to 20lb | $7.17 + $0.16/half-lb above first 3 lb |
| Oversized items | Max dimensions | Item Weight | Fulfillment fee (in USD) |
| Small oversize | 60" x 30" | 70 lb or less | $9.73 + $0.42/lb above first lb |
| Medium oversize | 108” (longest side) | 150 lb or less | $19.05 + $0.42/lb above first lb |
| Large oversize | 108” (longest side) | 150 lb or less | $89.98 + $0.83/lb above first 90 lbs |
| Special oversize | >108” (longest side) | Over 150 lb | $158.49 + $0.83/lb above first 90 lbs |
There are two types of storage fees:
Amazon charges you for any space your inventory takes up in their fulfillment centers before the sale.
| Storage Month | Standard Size | Oversize |
| January - September | $0.87 per cubic foot | $0.56 per cubic foot |
| October - December | $2.40 per cubic foot | $1.40 per cubic foot |
The aged inventory surcharge for Amazon is divided into two:
| 271 to 365 days in storage | $1.50 per cubic foot |
| More than 365 days in storage | $6.90 per cubic foot or $0.15 per unit (fees apply whichever is greater) |
Avoid long-term storage fee by requesting a removal order:
| Size Tier | Shipping Weight | Removal Fee (in USD) |
Standard size | 0 to 0.5 lb | $0.97 |
| 0.5+ to 1.0 lb | $1.46 | |
| 1.0+ to 2.0 lb | $2.20 | |
| More than 2 lb | $2.83 + $1.06/lb above 2 lb | |
Oversize and special handling | 0 to 1.0 lb | $3.12 |
| 1+ to 2.0 lb | $4.07 | |
| 2.0+ to 4.0 lb | $5.56 | |
| 4.0+ to 10.0 lb | $9.43 | |
| More than 10.0 lb | $13.05 + $1.06/lb above 10 lb |
Amazon offers free returns for customers that the seller will shoulder. It is equivalent to the total fulfillment fee for a given product.
You may incur these fees when your inventory has no proper labeling or preparation. Amazon charges you a per-item fee for FBA label service, FBA prep service, manual processing service, and FBA repackaging service.
Here's the part you've been waiting for. The step-by-step guide on how to become an Amazon FBA seller:
FBA has different requirements and restrictions than non-FBA products. If you fail to comply, it will result in any of the following:
You can prevent this by avoiding the following niche or categories:
Here’s how to find one:
The right supplier must have the following characteristics:
After you tick all the boxes, here are different ways to find a supplier:
A well-researched and developed brand is a valuable marketing weapon for your business.
If your goal is to expand into other niches, think of a unique and memorable company name, which will be your seller name. You must also assign a brand name for each product you're offering.
Create a brand logo and design for your company and products. You can outsource this task if you're not artistic or have zero knowledge about graphics design. Don’t use graphics or pictures from stock photo websites because you might encounter a seller with the same design as yours.
Before you start selling, have the following first:
Then choose the right Amazon seller plan: the Individual plan or the Professional plan.
The product title should be descriptive enough for shoppers to understand. Upload high-resolution product images shot from different angles to give your customers visual clarity.
State the benefits of your product in bullets. Remember that you must pass the standards of your prospective buyers and Amazon's algorithm, the A10. Be thorough in performing search engine optimization to target the right keywords or search phrases.
Amazon is very meticulous when it comes to inventory preparation and packaging. They have rules on how you must prep up your products to ship them to Amazon's warehouses. Case-packed products must not exceed 50 lbs or exceed 25 inches in length on any side. For more information on Amazon FBA packaging, visit Amazon Seller Central.
Time to create your first shipment! Follow the steps below:
We've devised an easy-to-follow five-step guide to launch your product.
Here are the mistakes to avoid as an Amazon FBA seller:
Always have a plan B. Plan B is to switch to the Fulfillment by Merchant (FBM) setup whenever needed. FBM is when you handle the order fulfillment operations by yourself.
Amazon is one of the most competitive marketplaces on Earth. Do everything to protect your brand and reputation. Enroll in Amazon Brand Registry and have your products trademarked.
You won't be penalized if you run out of stock. But your seller performance metrics and ranking will be affected. Amazon also automatically removes a listing that has zero inventory. Regularly check your stock levels on a weekly or bi-weekly basis. Replenish right away to keep selling and earning.
Amazon rules and regulations are overwhelming to read. No wonder sellers skip this part. But failing to do so would put your selling privileges at risk. So read everything from front to back. Stick to the rules to avoid getting banned.
Nope. Yes, you can earn money as an FBA seller, but it will not be an overnight success. Hard work and dedication are the keys to being a successful Amazon seller. There is no such thing as shortcuts and quick hacks. You need to roll up your sleeves and get to work.
The FBA service assures customers of free and quick shipping. At the same time, Amazon Prime allows you to offer your products to customers. Enroll in Amazon FBA today to start selling and grow your online shopping business in no time.
If you want some help to jumpstart your Amazon FBA business, our experienced consultants in Seller Interactive are willing to help you. Call 1-800-820-3746 today.
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