3 Tips for Reducing Amazon FBA Fees
Fulfillment By Amazon (FBA) offers numerous benefits for sellers, such as Prime eligibility and order fulfillment, but it can be costly. Understanding Amazon’s FBA fees and how they can impact your profitability is essential to protecting your revenue.
In this article, we explain what you should know about FBA fees and what you can do to avoid unnecessary charges. Keep reading to learn more.
What are FBA Fees?
Monthly inventory storage fees are charged for the space your inventory uses in Amazon’s fulfillment centers. Product size and the season impact these fees, with higher charges during the peak holiday months. Your products may be subject to a storage utilization surcharge in addition to the base monthly storage fee. Items categorized as dangerous goods have different storage rates.
FBA fulfillment fees are also charged per unit for fulfilled orders. These fees vary depending on your item’s category, size, and weight.
Other fees apply if you have too little or too much inventory. The low-inventory-level fee is charged for standard-sized products with consistently low inventory levels relative to customer demand. Amazon uses the Minimum Inventory Level metric to assess your product’s historical days of supply and only charges the fee when the historical days of supply are below 28 days for long-term (past 90 days) and short-term (past 30 days). The aged inventory surcharge applies to units stored in fulfillment centers for over 181 days.
Amazon introduced a returns processing fee in 2024 for products with a high return rate by category (except for apparel and shoes). If your product has a high return rate compared to your category-specific threshold, the fee will be charged based on the product’s size tier and shipping weight.
The FBA inbound placement service fee is determined by factors such as your product quantity, existing inventory levels across the Amazon fulfillment network, and customer demand. Choose from minimal shipment splits and partial or Amazon-optimized shipment splits when creating your FBA shipping plan.
Inbound defect fees, removal order fees, and others may apply. Being aware of the fees that could impact your products is critical when determining optimal pricing. Check out this free guide to get an overview of these fees with links to the rates on Seller Central.
3 Tips for Reducing FBA Fees
You can’t avoid FBA fees, but having the right inventory processes, product packaging, and tools can help reduce them. Here are three ways to reduce your Amazon FBA fees:
1) Improve Inventory Management
Effective FBA inventory management is the best way to prevent avoidable fees such as the low-inventory-level fee, aged inventory surcharge, and overage fees. Try to keep between 28-180 days of inventory at Amazon fulfillment centers to meet customer demand without racking up additional fees. You may need to refresh your listing content or consider offering additional promotions to move slow inventory.
2) Decrease Packaging
One of the most effective ways to reduce FBA fees is to decrease the size of your product packaging. Consider enrolling in the Ships in Product Packaging (SIPP) program or work with your manufacturer to find ways to reduce the size and weight of your product. Of course, it’s important to protect the customer experience (and your seller reputation!) by ensuring that your product will arrive undamaged.
3) Automate Fee Management
Finding the right tools to support your Amazon business allows you to automate processes and save time. eComEngine software simplifies FBA fee management by enabling smart FBA inventory planning and restocking. Comprehensive reports put the spotlight on aging inventory and SKUs impacted by the low-inventory-level fee. Low inventory and FBA out-of-stock alerts empower you to act fast to protect your Amazon ranking and prevent additional fees.
eComEngine has the tools you need to avoid unnecessary FBA fees. SellerPulse includes FBA inventory planning reports, inventory alerts, and fee insights for easier FBA fee management. You can use it as a standalone Amazon reporting tool or combine it with RestockPro for powerful FBA inventory management, including restocking suggestions, purchase orders, supplier management, and more. eComEngine has the tools you need to avoid unnecessary FBA fees.
Becky Trowbridge is the Senior Marketing Manager at eComEngine. Her mission is to empower Amazon sellers with the information they need to be successful in a competitive market.