2023 Fulfillment by Amazon (FBA) Review: Costs & Features

As a registered Amazon seller, you can send your inventory to an Amazon fulfillment center on a shipping pallet or through a freight forwarding company directly from your supplier. Alternatively, a service like ShipBob can prep and send your inbound FBA shipments for you. Once received, the merchandise can be further distributed across FBA’s warehouse network to optimize logistics.

You need to pay an inventory storage fee to store your products in an Amazon fulfillment center. These fees depend on the size of your items and the time they’re stored. Amazon FBA storage fees start at 56 cents/cubic foot during off-peak season.

Once a customer places an order on Amazon or another sales channel, FBA picks, packs, and ships the merchandise. Fulfillment fees apply, starting at $3.22/unit for small items (weighing 6 ounces or less) and going up to $200+ per unit for special, oversized products (like hot tubs and deep freezers). The charge includes labor, shipping costs, and packing materials.

Custom/branded outer packing is not an option. Products in certain categories, namely clothing and accessories, are subject to greater fulfillment fees.

If post-sale servicing is needed (such as customer assistance, order returns, or refunds), Amazon handles the interaction. The company’s team of representatives is available to customers 24/7 through multiple communication channels. Returns are handled, discarded, and/or restocked to your specifications, and the platform manages refund payments.

Selling on Amazon comes at a cost, regardless of how you fulfill your orders. A professional seller account is $39.99 monthly, or individual sellers can pay 99 cents per item sold.

You’ll cover the cost of shipping your merchandise to FBA, which varies depending on the shipment’s origin and attributes. Amazon has negotiated shipping discounts through its partnered carriers.

The costs to pick an order from FBA’s storage location(s), pack it, ship it, and handle customer service and returns start at $3.22 per unit and go up to $200+ for special, oversized items. The total of this charge considers many factors, including:

• Size
• Weight
• Quantity
• Category
• Sales channel
• Shipping speed (for multichannel orders)

FBA’s base fulfillment fees for non-apparel items are outlined below:

Multichannel sellers should note that FBA charges greater fulfillment fees to fulfill non-Amazon orders (we’ll go into those exact costs later on.) It also tacks on a greater cost for items in certain categories, such as apparel and dangerous goods, regardless of sales channel.

FBA charges a removal fee if you want to pull inventory from Amazon and/or dispose of unsold stock. The cost of this service is determined by weight and size tier and ranges from 97 cents to $13.05+.

It’s worth noting that many sellers have had issues with delayed stock removal, meaning their inventory has stayed in FBA’s warehouses for weeks or even months after they paid for and requested its removal. This problem incurs unexpected storage costs and reduced revenue for affected merchants.

Amazon has strict barcode label specifications for all stock received by FBA. You may be assessed a labeling fee of 55 cents per unit if items are not labeled properly.

FBA has stringent product packaging and prep guidelines. To avoid handling them yourself, you can opt to have Amazon pack and prep your products upon inbound receiving for a fee.

If you don’t opt into FBA’s prep service in advance, you’ll incur an unplanned prep fee for sending improperly prepared products. These charges vary by product and service type and range from $1.40–$2.55 per unit.

The cost of a potential return is included in the fulfillment fee for most items, but goods in certain categories (such as apparel and accessories) don’t qualify for this service. FBA bills a return processing fee for those particular products equal to the original fulfillment fee. If the returned products need repackaging for resale, Amazon charges an additional repackaging fee.

The cost of storing your products at an FBA warehouse varies by season, increasing up to 200% during the October to December timeframe. The assessed cost also depends on the size of the product and whether it falls into the “dangerous goods” category.

Products that fall into FBA’s “dangerous goods” category—which includes items such as laptops, smartphones, household cleaners, spray paints, and cosmetics—incur higher storage costs. Read about FBA’s Dangerous Goods Program to learn more.

FBA Storage Fees by Season

As shown in the table above, Amazon FBA fees increase dramatically during the holiday season. This is something to watch if you use FBA, and it’s a significant reason that volume sellers rarely use FBA as their sole storage option.

Instead, power sellers often store the bulk of their inventory in cheap storage units or a company warehouse. Then, they periodically ship just enough stock to FBA to cover forecast sales.

Long-term Storage Fees

For inventory held at an FBA warehouse longer than 270 days, sellers incur long-term storage fees. Between 271 and 365 days of storage, an additional $1.50 per cubic foot may be added to your fees. Beyond 365 days of storage, an additional 15 cents per unit may be tacked on, or your costs will increase to $6.90 per cubic foot (whichever is greater.)

Though Amazon doesn’t provide these, downloadable tools such as Sellics, InventoryLab, and Jungle Scout exist to make selling with FBA easier (and more profitable). These apps boost your marketing, inventory management, and reporting capabilities by integrating with your Amazon account. Third-party tools like these can incur up to $100+ per month, so it’s important to factor them in when calculating your outlay.

If you use sales channels other than Amazon (such as your own Shopify store and/or other online marketplaces like eBay) you can use FBA to fill those orders, too. Amazon calls this service Multi-Channel Fulfillment, or MCF.

For multichannel FBA users, inventory storage fees remain the same, but MCF fulfillment fees are higher. MCF orders don’t incur an added Amazon seller fee.

The MCF fee accounts for the entire process of picking items from inventory, packing, and shipping. But, Amazon does not handle post-sales servicing for MCF orders. Thus, you’ll need to field all multichannel customer inquiries, returns, and refunds yourself (or hire employees to do so).

With most MCF orders, you can select between three shipping methods: Standard, Expedited Two-Day, and Priority One-Day. This is helpful if you offer a range of shipping options on your own ecommerce store or website. Also note that if an MCF order contains multiple units, the cost per unit decreases.

If you compare Amazon’s MCF fees to the shipping rates you’d pay to fulfill orders yourself, you’ll likely find MCF is a pretty good deal. While this is the case, multichannel sellers who don’t focus mainly on Amazon sales are better off partnering with a cheaper 3PL, such as ShipBob.

Amazon has 110 FBA warehouses strategically located across the continental US (see the full list of warehouse locations below)—plus 75 additional fulfillment centers worldwide.

This allows sellers to split inventory across multiple warehouses, keeping products in close proximity to multiple customer bases. FBA’s large warehouse network also simplifies inbound shipping and importing by enabling merchants to use warehouses close to their suppliers or ports of destination.

To compare with competing fulfillment companies, ShipMonk has a total of 10 warehouse locations, and Red Stag has just two. It’s rare to find a small business-friendly 3PL with infrastructure as vast as FBA.

Amazon’s Seller Support team serves FBA users in addition to all other Amazon sellers. While FBA ratings on sites like Trustpilot and G2 are scarce, there’s an abundance of discussion about the service elsewhere—such as forums like Reddit, Quora, and Amazon’s own Seller Forums.

While Amazon customer service is highly responsive and effective for shoppers, Seller Support is notoriously unreliable—reportedly leaving users waiting multiple weeks or even months for issue resolution. It’s also reported that most Seller Support is outsourced to third-party representatives with insufficient training.

If you search for Seller Support contact info online, you’ll come across a phone number that’s actually reserved for Amazon customers. The only way to contact Seller Support is by filling out a ticket and requesting a call or email.

It’s not uncommon for fulfillment companies to structure their support this way; when response time is fast, a lack of on-demand customer service is typically a non-issue. But, FBA’s response time is reportedly very slow, and some users state that it requires multiple follow-up requests in order to speak with someone.

In addition to Seller Support, a seller community forum and online knowledge base are available for users to troubleshoot on their own.

FBA’s proprietary turnkey integrations are pretty limited, but thanks to its open APIs and enormous popularity, thousands of FBA integrations are readily available through third-party developers.

Plus, FBA directly integrates with certain ecommerce integration service providers, such as WebBee. This makes it possible to integrate with any of your necessary tools or platforms quickly and easily—though it may come at an additional cost.

Other companies, such as Zapier, have created numerous plug-and-play integrations to connect FBA and Amazon Seller Central to a host of other apps and programs you may use.

Suppose you’re unable to find your desired integration pre-made. In that case, FBA’s developer-friendly APIs make it easy to create a custom-made connection. However, unlike other fulfillment partners such as ShipBob and Red Stag, FBA does not offer integration development as a value-add service.

Here’s a list of FBA’s current proprietary direct integrations:

• Ecommerce platforms and marketplaces: WooCommerce, VTEX, 3dcart, Shopify, WebBee, and Bytestand
• Freight and shipping solutions: AfterShip
• Operations, inventory, and order management: ChannelAdvisor, Listing Mirror, Orderhive, Zentail, Skubana, Sellbrite, and Sellercloud

One of the most popular features of FBA is the free two-day Prime shipping for Amazon Prime subscribers. Some products are eligible for free shipping, even if a buyer isn’t a Prime member. However, it might take a little longer for the package to arrive for non-members.

FBA product listings prominently feature the Amazon Prime logo, signaling to Prime members they can purchase your product with free Prime two-day shipping or other Prime offers. Prime boasts nearly 200 million subscribers who look for the Prime logo while shopping—so FBA products attract far more buyers than non-Prime products.

Amazon offers free shipping on orders over $25 to all buyers, Prime or not. The caveat is that these must be eligible products, and that list of eligible products includes FBA items. The same applies to Amazon coupon deals or buyer events like Prime Day and Cyber Days; FBA products qualify for these offers, too.

In addition to the standard order fulfillment processes, FBA performs all customer service-related tasks for your Amazon orders. The company’s well-established CS team is available 24/7 by phone, email, or live chat on the app or website and has a reputation for providing highly accommodating support.

The cost of outsourcing this level of service elsewhere would be astronomical. For each hired representative, call center outsourcing in the US can cost anywhere from $25 to $65 per hour. To have just one employee on call for these hours would cost thousands of dollars each month—and potentially hundreds of thousands each year. In that regard, FBA is incredibly cost-effective.

FBA listings get a significant edge over non-FBA items in Amazon’s search engine algorithm. This leads to higher rankings for FBA products in Amazon’s product search results, leading to more sales.

Another advantage is prioritization in Amazon’s Buy Box, which is the “Add to Cart” button on most product listings. When viewing a product sold by multiple sellers, hitting this button will add one chosen listing to the customer’s cart.

The platform selects which listing gets to “own the Buy Box” using an algorithm that considers price, shipping speed, seller metrics, and fulfillment method. The most heavily weighted factor in determining Buy Box ownership? Use of FBA.

The Buy Box (A) is the spot every Amazon seller wants their listing to occupy. The top listing is what automatically sells when the “Add to Cart” button is clicked. FBA Prime-eligible products take preference if there’s a price tie and can even win the Buy Box over lower-priced non-FBA products (B).

FBA’s Small and Light program reduces fulfillment costs on certain items, which allows for better profit margins. According to Amazon’s product identification data, eligible products must weigh 3 pounds or less, cost $12 or less, and sell quickly.

Certain items that require special handling—such as dangerous goods, temperature-sensitive goods, or restricted goods—don’t qualify for the Small and Light program.

Here are FBA’s Small and Light fulfillment fees:

Although these products are still subject to standard storage and seller fees, enrolling in FBA’s Small and Light program can increase your store’s profitability and create more opportunity to test products in new markets.

The Subscribe & Save feature on Amazon gives customers a discount and free shipping when they sign up for a product subscription—a recurring, automated purchase. This gives customers a convenient, regular delivery at their chosen interval and helps sellers obtain repeat customers. It’s one of the best ways to have consistent revenue with Amazon.

The Subscribe & Save buying option can be offered to customers on your FBA listings as a conveniently scheduled purchase.

It doesn’t cost sellers to offer the Subscribe & Save feature. However, merchants must meet minimum requirements (such as a feedback rating of 4.7 or higher) and maintain good standing with the platform. The feature is only available to sellers using FBA for three months or more.