Q&A Session – FBA Fees Explained: What is the Referral Fee and What are FBA Fees EP22

GUI: Today is all about FBA fees.

Q1: I’m going through a few products and I’m considering one in particular but I’m confused about the FBA fees. Can you please go over the fees that Amazon charges?

MANNY: There’s two main fees to consider: the referral fee and the FBA fee. The referral fee is a fee Amazon charges you no matter what, as long as you are using FBA, they’re going to charge you 15% of whatever your product is selling for. It varies on just a few categories like video game consoles and industrial and scientific products but typically it’s 15%. Personal computers is 6% I think but just check your listing and make sure. If you’re selling a product for $30, 15% is $4.15 so that’s going to be your referral fee. The FBA fees are a little more tricky. It’s not based on the product price but on the product itself, the dimension and weight and Amazon handling that product for you. There’s an order and handling fee and that’s a dollar, then they have a pick and pack fee which is $1.06, (the fees change on a regular basis), the weight handling is roughly $1 so you’re looking at $3 but that changes based off of weights and dimensions and how big things are. Try to keep your products under a pound or two and fitting in the size of a shoe box and you’ll be in the weight that amazon allows before they charge excess fees because of overweight or exceeding dimensions.

GUI: If you can visualize the size of a shoe box, you’ll be fine.

MANNY: the weight can go up to 20 pounds so you can order a 15-pound product but the package can go to 20 pounds. If your product is 15 pounds and you order it from China bringing them in to the States, you’re going to get killed with shipping costs. Amazon gives you $1.24 for up to two pounds and thereafter $.41 for every pounds thereafter. The large standard dimensions are 18 X 14 X 8 inches.

Q2: I’m confused – are fulfillment fees based on the cost of the product?

MANNY: The referral fee is based on the cost and the FBA on the dimensions and weight. Whatever your price, it doesn’t affect the cost of the FBA fees.

Q3: I have a product that I sell for $29 and I want to reduce the price down to $19 to drive up sales for a short time. Are my FBA fees calculated on the original price of the product or the new sales price I will be lower to?

MANNY: The FBA fees are calculated on the product and not the price. You are referring to the referral fee and the referral fee does change. You’re only going to be paying on the sales portion of it. If you’re going from $29 to $19, your referral fee is going to be based off of that $19. Rounding it up to $20, your referral fee is going to be $3 vs if you were at $29 – $4.50. you’re saving $1.50.

0:39 Episode Introduction
2:10 “Can you please go over the fees Amazon charges?”
3:03 What is the referral fee Amazon charges?
3:50 What are the FBA fees Amazon charges?
8:07 “Are FBA fees based on the cost of the product?”
8:40 “Are FBA fees calculated off original price or sales price?”

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