Amazon’s fulfillment system is merchants’ favorite alternative for fulfilling orders. Not only does the Amazon FBA cost cheaper compared to other shipping methods, but it also provides streamlined operations—thanks to Amazon’s vast logistics network.
Amazon FBA comes with a variety of fees that some sellers find confusing, however. If you are one of these folks, read on. In this article, ARD will breakdown the three common logistics fees that come with FBA.
Let’s begin.
What Is Amazon FBA?
Fulfillment by Amazon (FBA) is a service that allows sellers and vendors to take advantage of Amazon’s vast logistics network. The program enables participants to outsource their order fulfillment process to Amazon. Thus, eliminates the need for sellers to constantly pack and ship products themselves.
Here’s how FBA works:
First, sellers send their products to Amazon’s fulfillment centers for storage. Then, when a customer places an order, Amazon handles the packing and shipping process.
Amazon FBA Cost & Other Fees
FBA participants are charged with a variety of fees that vary and depend on several factors. The most common fees, however, are fulfillment fees and storage inventory fees.
Here’s how the two fees differ.
FBA Fulfillment Fee
FBA Fulfillment fee covers expenses for picking and packing orders, customer service, shipping, handling, as well as returns. The cost varies depending on several aspects. Generally, Amazon uses dimensional weight to calculate shipping costs, which considers the size and weight of the items being shipped.
Amazon also categorizes a product’s size into two types: standard size and oversized.
Product Size and Weight
Here’s a quick guide between the difference of standard size and oversized and how much products’ cost depending on both factors.
Standard Size
Products that weigh less than 20 pounds or measure smaller than 18x14x8 inches are considered standard size. The fees, on one hand, vary based on the item’s weight.
Items under one pound cost between $3.22 to $4.75 while those over two pounds can cost over $6.10. For shipments over three pounds, an extra $0.16 per half-pound is charged.
Oversize
Oversized products pertain to items that exceed the specified weight or size limit given for standard size. The fees start at $9.73 for small oversize products—or those that are over 70 pounds or dimensions greater than 60 inches on the longest side.
An additional $0.42 is charged for every extra pound.
