How to read the Amazon FBA pricing? Check how to use it to calculate logistics costs.

The Amazon platform offers 3 options for selling products. The classic model is Fulfillment by Merchant (FBM), where you, as the seller, handle the shipping of orders, and your logistics costs depend on your agreements with couriers. The second is the Vendor program, which is available only to selected manufacturers by Amazon, where you only pay for delivering larger batches of goods to this e-commerce giant's warehouses. The third is Fulfillment by Amazon (FBA), where the company's employees take over some of your logistics tasks, for which specific fees are charged. How much do they amount to? In this article, we will advise where to look for information about shipping and storage costs in Amazon FBA and we will discuss the commission pricing in an accessible way. We will also show you how to easily reduce logistics expenses and save time related to shipments.

What is the Amazon FBA pricing?

All basic shipping and storage costs by Amazon can be found in the price list. This is a document containing a detailed breakdown of all fees associated with executing shipments under FBA. Separate tables for products:

Classified under the Small & Light Program

Standard

Oversized

contain comprehensive information regarding local and cross-border shipping costs. The general rule is that if you store goods, for example, in Germany, then shipping to customers living in that country will be lower than shipping from the German logistics centre to France. Below, you can compare the local price list for Amazon FBA shipments with shipping costs between individual countries (Fig. 1, 2).

Fig. 1 Local price list for standard size FBA shipments

Fig. 2 Cross-border price list for standard size FBA shipments

How to calculate FBA fees?

The total amount you need to pay to the Amazon platform for shipments sent under FBA depends on which services you use. The portal charges fees for:

Fulfillment - a uniform rate per unit based on the weight and dimensions of the product

Storage - charged for each cubic metre or cubic foot used in a given month

Additional services - if you use disposal, item labeling by Amazon employees, returns, packing in bags or bubble wrap, the platform will add specific fees for this.

The largest portion is always the fulfillment fee. Storage costs will be low if your products have standard sizes. For example: if 100 pieces fit in a cubic metre, you will pay only 0.03 cents per month for storing 1 package. Many additional services you can perform on your own and thus eliminate these fees. You can find the summary of FBA costs here https://sell.amazon.pl/oplaty.

How to calculate the FBA handling cost for the German market from a warehouse in Poland?

If you want to focus on the German marketplace but find it more convenient to store goods in Poland, you need to calculate what costs are associated with that. The main factors to consider are:

The fulfillment of shipments with specific parameters - check the fee for products with specific sizes and weights. This information can be found in the price list on the cross-border shipping page.

The use of storage space - determine how many cubic metres you need to maintain stock levels safely.

Returns - be sure to think about what you will do with packages returned by customers. Local returns are much cheaper than cross-border ones, so perhaps it’s worth renting additional warehouse space in Germany?

Labeling - if you label the goods yourself, you will avoid additional costs.

The platform allows sellers to estimate revenue from orders fulfilled in Amazon FBA. In the simple calculator, you just need to find an existing offer or provide the parameters of your own product to obtain information about the costs and monthly income from sales under this model.

Fig. 3 Amazon FBA Calculator

Source: https://sellercentral.amazon.pl/fba/profitabilitycalculator/index

What else can be found in the FBA pricing?

Amazon is currently the largest marketplace in the world, yet it continues to expand the range of services offered and takes over more segments of the e-commerce market. The FBA pricing also includes information about multichannel fulfillment. What does this mean? By having an active seller account on this platform, you can sell goods on other global sales platforms by storing them in the logistics centres of the American giant. This solution has many advantages, as it allows you to:

Reduce shipping costs to multiple warehouses

Control inventory and payments in one place

Manage production more efficiently.

Similar to the classic FBA model, the portal charges fees for fulfillment, storage space, and additional payments such as for handling returns.

Are these all the costs associated with the FBA model?

Now that you know where to look for information on shipping costs under FBA and have access to the calculator, you can freely optimise product prices to achieve the desired profit. In addition to the fees described above, you should also consider the wholesale cost of delivering goods to Amazon warehouses. Although you must use recommended suppliers, shipping within a single country will be much cheaper than cross-border transport, for example, when sending products from your headquarters in Poland to warehouses in Germany. Remember that for every product sold on the platform, a sales commission, known as a referral fee, will also be charged.

Happy Selling

Amata Chudek

Head of Content