October 10th, 2024
Amazon FBA Fees: A Breakdown for US and Canadian Sellers
For Amazon sellers using Fulfillment by Amazon (FBA), understanding the associated fees is crucial for maintaining profitability. These fees can significantly impact the bottom line, especially for sellers in the U.S. and Canada, where costs differ across borders.
This article offers a fba fees breakdown and highlights differences between U.S. and Canadian FBA fees, providing Amazon guidelines to help sellers understand their expenses and take informed decisions.
Read on to learn more.
1. Understanding Amazon FBA Fees
Amazon FBA fees are generally categorized into:
- Referral fees
- Fulfillment fees / Peak Fulfillment fees
- Storage costs
- Inbound Placement Fee
- Returns
- Additional charges
Each of these fee categories directly impacts your profitability, and while they share similarities between the U.S. and Canada, there are key differences to be aware of.
2. Referral Fees
Amazon charges a referral fee for every product sold, which is a percentage of the item’s price. Referral fees generally range between 8% and 15% across both U.S. and Canadian markets, depending on product categories and with minimum amounts to pay.
Categories like consumer electronics incur an 8% referral fee, while Beauty, Health and Personal Care may go from 8% to 15% depending on the products sales price. This is consistent across both countries.
You can see the complete table of all product categories for the U.S. here and for Canada here.
3. Fulfillment Fees
Fulfillment fees cover the costs for picking, packing, and shipping orders from Amazon fulfillment centers. These fees depend on the product’s weight and dimensions.
U.S. Fulfillment Fees:
In the U.S., fulfillment fees for standard-size products start at $3.22 per unit for items weighing under 1 lb. For extra-large items, the fees begin at $26.33 + $0.38/lb interval above first lb, depending on the size tier.
Canadian Fulfillment Fees:
For Canadian sellers, standard-size products start at CAD $5.92 per unit, while large oversize items begin at CAD $82.2.
FBA fulfillment fees Comparison: U.S. vs. Canada (excluding apparel)
Here you can find the full FBA fulfillment costs list for US and for Canada.
For products priced under USD $10 or CAD $11, they will automatically receive Low-Price FBA rates with the same delivery speeds as standard FBA.
Low-Price FBA rates are USD $0.77 less than standard FBA rates in the US and CAD $0.55 less in Canada. All Low-Price FBA rates are available with free shipping for Prime customers and standard shipping for non-Prime customers.
For the complete fee table, you can check this link for US and this link for Canada.
Peak fulfillment fee
This fee applies during the high-demand period each year. The next period is from October 15, 2024, through January 14, 2025. On January 15, 2025, fulfilment fees revert back to the non-peak period rates.
For U.S. sellers, this fee typically ranges from $0.20 to $3.60 per unit depending on the product size and category.
In Canada, the peak fees are similar but may show some variations based on exchange rates.
Here you can find the full FBA Peak fulfillment costs list for US and for Canada.
For example, if you sell an item that weights 350 g, you would be charged CAD $6.73 in non-peak season, and CAD $7.13 in peak season.
That same item sold in US, would have a USD $4.55 fee in a non-peak season, or USD $4.84 in peak season.
Digital services fee
Since October 1, 2024, Amazon has also introduced a digital services fee for digital services taxes (DST) that are implemented by the governments of Canada, the UK, France, Italy and Spain.
While the typical DST rate is 3% in Canada, DST charges vary based on the location of your business, the location of the buyer and other factors.
If you’re established in:
- The UK: A digital services fee of 2% will apply on Selling on Amazon & FBA fees for sales in the following stores: UK, France, Italy, Spain, Canada, United States, Germany, Belgium, Sweden, Netherlands, Poland, and Mexico.
- France: A digital services fee of 3% will apply on Selling on Amazon & FBA fees for sales in the following stores: UK, France, Italy, Spain, Canada, United States, Germany, Belgium, Sweden, Netherlands, Poland, and Mexico.
- Italy, Spain, or Canada: A digital services fee of 3% will apply on Selling on Amazon fees for sales in the following stores: UK, France, Italy, Spain, Canada, United States, Germany, Belgium, Sweden, Netherlands, Poland, and Mexico.
- Any other country: A digital services fee of 2% will apply on Selling on Amazon & FBA fees for sales in the UK and France stores, and a digital services Fee of 2% on Selling on Amazon fees for sales in the Italy, Spain, and Canada stores.
If you’re established in the US (“Any other country” in the table above) and you sell in the CA store (amazon.ca), a digital services fee of 2% will apply on Selling on Amazon fees:
Item price $15
Referral fee $2.25
FBA fulfillment fee $3.30
Digital services fee
2% of referral fee ($2.25) $0.05
Digital Services Fee $0,05
For more detailed information about the Digital Services Fee, you can visit Seller Central.
4. Storage costs and aged inventory surcharge
Storage costs are charged monthly and vary depending on the time of year and product size. During peak seasons (October to December), fees increase due to higher demand for storage space.
U.S. Storage Fees:
In the U.S., standard-size items incur a minimum storage fee of USD $0.78 per cubic foot from January to September and USD $2.40 during the peak season. Oversize items cost from USD $0.56 per cubic foot for most of the year and from USD $1.40 during the holidays.
Canadian Storage Fees:
From January to September, sellers are charged around CAD $36 per cubic meter (CAD $1.02 per cubic foot) for standard-size items and CAD $25 for oversize items. During the holiday season, fees rise from CAD $64 per cubic meter for standard items and from CAD $41 for oversize.
For comprehensive details on the Monthly inventory storage fees, please visit Amazon Seller Central US or Canada.
Aged inventory surcharge
In Canada: Aged inventory surcharge is charged on inventory units stored in Amazon fulfilment network for 271 days and above. The aged inventory surcharge is assessed using an inventory snapshot on the 15th of each month.
In United-States: they take inventory units stored for 181 days and above, but they also differentiate the fee depending on the number of days. From USD $0.50 per cubic foot to USD $6.90 per cubic foot or $0,15 per unit, whichever is greater (see table below).
For Canada:
For US:
For more information, visit this link for Canada and this one for US.
Inventory storage overage fees
If your inventory in Amazon’s fulfillment centers (not including open shipments) exceeds your capacity limit, you will be charged an inventory storage overage fee in addition to monthly inventory storage fees and, if applicable, an aged inventory surcharge.
The overage fee is based on how many days your capacity limits are exceeded, and is calculated using the highest limit, either estimated or confirmed, that we’ve provided for the given period.
This charge will occur even if your capacity usage is subsequently reduced to a level below your capacity limits for that period.
In US: It will be charged monthly at $10 per cubic foot based on the daily average volume (measured in cubic feet) for any space your inventory occupies in fulfillment centers beyond your capacity limits. For more information, go to FBA capacity limits.
In CA: It will be charged monthly at CAD 460 per cubic metre based on the daily average volume (measured in cubic metres) for any space that your inventory occupies in fulfilment centres beyond your capacity limits.
Low-inventory-level fee
Effective since April 1, 2024, a low-inventory-level fee is applied to standard-size products with consistently low inventory relative to customer demand. When sellers carry low inventory relative to unit sales, it inhibits Amazon’s ability to distribute products across their network, degrading delivery speed and increasing shipping costs.
A low-inventory-level fee will only apply if a product’s inventory level relative to historical demand (known as “historical days of supply”) is below 28 days. Amazon will only charge a low-inventory-level fee when both the long-term historical days of supply (last 90 days) and short-term historical days of supply (last 30 days) are below 28 days (4 weeks).
United-States:
Canada:
For more detailed information, you can visit US Seller Central or CA Seller Central.
5. Inbound Placement fee
The FBA inbound placement service fee for standard and large bulky sized products reflects the cost of distributing inventory to fulfillment centers close to customers. The fee is effective since March 1, 2024 only for the US.
When creating a shipping plan, you can choose from the following inventory placement options:
- Minimal shipment splits: Send inventory to a single or minimal locations for a fee, with Amazon deciding how to distribute it across their network. Fees may vary by location.
- Partial or Amazon-optimized shipment splits: Send inventory to multiple locations for a reduced or no fee, depending on the number of shipments. For no fees, shipments must include at least five identical cartons or pallets per item, with consistent quantities and item mix. For sending to two or three locations, a reduced fee applies.
The availability of inbound placement options depends on factors like product types, quantities in your shipping plan, existing inventory levels, and customer demand location. Fee estimates for each option are shown when creating a shipping plan. The FBA inbound placement service fee will be charged 45 days after your shipment is received, based on the location and quantities received.
When you create your shipping plans, you’ll see a fee estimate for each available inbound placement option. The fee may be adjusted periodically within Amazon size and weight ranges, and will vary based on: item size, weight, number of locations tier, Inbound location.
To see the table that best outlines the per-unit FBA inbound placement service fees, you can check this link.
6. Returns
A return is an item a customer sends back to a fulfilment center. Amazon evaluates the condition of each returned item. If they determine that the item is sellable, they return it to your inventory. If they determine that it is unsellable (defective or damaged, for example), they assess who caused the damage (Amazon or the customer). Then they decide if you are eligible for a reimbursement.
A returned item is classified as unsellable for the following reasons:
- The item is not in the same condition as previously listed.
- It is defective, damaged, opened, lacking required labelling, prohibited or otherwise unsuitable.
- This includes items that may pose a health or safety risk to our associates, or to the next customer who buys it. This may include, but is not restricted to, consumables, personal care products and products with expiry dates.
For items in your inventory categorized as Defective or Customer Damaged, you must submit a removal order within 30 days after the returned item arrives at the fulfilment centrer. You can also request that we return or dispose of this unsellable inventory automatically.
Brands incur the following return-related fees:
- Returns Processing Fee: For certain categories like apparel, shoes, and jewelry, Amazon charges a return processing fee. The fee covers the handling of customer returns.
In Canada, fees will apply depending on size tiers. In US, it depends on: product size tier, shipping weight, return rate, return rate threshold.
For CA, you can check the full rate list here and for US, here.
- Refund Administration Fee: If you refund a customer order for which you have already received payment, Amazon will refund you the amount of the referral fee you paid for the items, minus the applicable refund administration fee. Both in CA and US, for most products it’s lesser of $5 or 20% of referral fees (except book, music, video and DVD products).
Amazon will credit the seller the amount of the order-related fees originally charged for the item refunded, minus the refund administration fee. For more information, you can check it here.
- Disposal/Return-to-Seller Fee: If a returned item is not sellable and the seller requests Amazon to dispose of it or return it, a disposal or return fee applies. The amount varies based on the size and weight of the item. Full table here.
- Restocking Fee (in specific cases): For items returned in certain conditions (e.g., opened or damaged packaging), Amazon may charge a restocking fee. Here you have the guidelines.
Last thing to consider, is that there is a list of items that can’t be returned. You can see the full list in this link.
7. Additional charges
In addition to fulfillment and storage, sellers may encounter the following:
- Return-to-Seller Fee: These fees range from USD $1.04 to USD $14.32 + $1.06/lb above 2 lb per unit in the U.S. and CAD $0.36 to CAD $5.70 + CAD $0.97/kg above first 5kg per unit in Canada, depending on item size. US link and CA link.
- Unplanned Service Fees: These fees apply when items arrive at fulfillment centers without proper labeling or packaging, starting at $0.55 / CAD $0.60 per unit.
FBA Disposal Fees: For unsellable inventory in the US, disposal fees can range from $0.97 to $2.09 per unit. More info here.
In Canada, disposal fees can range from CAD $0.30 to CAD $3.53 + CAD $0.59/kg above first 5 kg per unit. More info here.
- Manual processing fees: If you choose not to provide box content information, Amazon will manually process your boxes at the fulfilment center and a fee will apply. Shipments that are manually processed may be received more slowly than shipments with box content information. The FBA manual processing fee in Canada is CAD $0.11 per unit for shipments received at Amazon.ca fulfilment centers. In Us, you might me charged USD $0.15 per unit or USD $0.30 per unit in peak season. Here you’ll find more details.
- Package prep fees: Amazon has some packaging requirements that sellers need to apply. If you don’t follow those guidelines, some fees will be applied for: bubble wrap, bagging, opaque bagging or labeling, depending on the product. You can see the detailed table here.
- Inbound defect fee (only in US): you may be charged inbound defect fees for the additional cost required to re-direct, receive, and process your shipment. This fee might be from USD $0.02 to USD $0.04 per unit. Here you can find more details.
Conclusion
As we have explored throughout this article, we’ve shown that all Amazon sellers must pay to sell on Amazon platform. In the FBA program, Amazon collects a portion of each sale through various fees, which vary depending on the product category and product size, and typically range from 25% to 55% of the product’s retail price.
It’s also important to factor in the cost of advertising and promotions, which we haven’t covered in this article but is crucial from day one for any product.
Two extra recommendations to help you on this initial analysis:
- Stay up to date: FBA fees are subject to change, so it’s essential to stay informed. Regularly check Amazon seller central for updates to fee structures and evaluate how changes affect your business.
- Use Amazon revenue calculator: it is a preview tool that allows you to compare revenue estimates for products based on the fulfilment channel used. Easily see which fees apply to each fulfilment option and enter sales volume estimates to calculate total proceeds, as well as per-unit sold estimates.
It might seem overwhelming to fully grasp the breakdown of each FBA fee, but it’s the only way to determine if a product has potential for Amazon FBA. If you don’t closely monitor how much you’re paying Amazon, you might discover that your profits are lower than anticipated—or even that you’re barely breaking even. That’s why it’s crucial to calculate your total FBA costs, so you know exactly what you’re spending on Amazon FBA and whether it’s truly worth it.
