Fulfillment By Amazon fees and how you can compute it

by Arshiya Dey and Varsha Menon on 21/09/2016
As online business owners, you put in a lot of effort in giving your customers an excellent experience. To help you do that more efficiently and allow you to concentrate on your business growth, we have services like Fulfillment by Amazon (FBA).

As covered in our previous post, if you sign up for FBA, you will be able to offer 1 or 2 day delivery, which could increase your customer base. In addition, there could also be an increased exposure of your products on the Amazon.in platform. To learn more about the benefits of FBA, you can click here.

In this post, we will help you understand the nominal fees involved to avail the FBA service and how you can compute it yourself. You can also watch this video and follow the instructions given below for easy calculation of the FBA fees.

Understanding FBA Fees

The FBA fees include the following services and unless stated otherwise these services won’t be charged separately:

Storage of your products at Amazon’s Fulfilment Centers (FCs)
Picking and packing of your products when a customer places an order
Shipping of your order to the customer
Customer service and returns supported by Amazon for products sold on Amazon.in

There are no additional setup charges or subscription fees when you add Fulfilment by Amazon to your seller account. FBA Fees are charged based on two primary aspects, the item’s dimension and weight; whichever is greater will be levied as fees.

All items stored at the FBA fulfillment centers are classified as Small size, Standard size or Oversize based on the unit dimensions shown below:
Items weighing more than 30kgs are classified as Oversize Heavy and Bulky.

NOTE: These rates of fees mentioned below may be outdated. Please check the pricing page for the latest rates
The Pick and Pack Fee is calculated on a per unit basis as per the below mentioned rates:
Small Size - Rs. 10
Standard Size - Rs. 15
Oversize - Rs. 25

The Weight Handling Shipping Fee is calculated per shipment and is based on the outbound shipping weight using the following formula:
Outbound Shipping weight = Shipment weight + Packaging Weight

The Weight Handling Shipping Fees for each Small item weighing 500 gms up to the 2 kgs is Rs. 30. Further, for each additional 500 gms, it is charged at Rs. 15. For Standard, Oversize and Oversize Heavy and Bulky items weighing more than 2kgs, we use Dimensional weight if it is greater than the Unit/Item weight.

Dimensional weight = (longest side * median side * shortest side)/5000

Packaging material used for each item is categorized as per the weight in the following manner:
Small Size - 80 gms
Standard Size - 100 gms
Oversize - 500 gms

Let’s take an example.
Order X has the following attributes:
Item Value: Rs 3000
Longest Side: 20 cm
Median Side: 15 cm
Shortest Side: 8 cm
Item Weight: 3000 gms

This falls in the standard size item category.

Item weight is 3000gms.
Dimensional weight = (20*15*8)/5000 = 0.48kgs
Since the dimensional weight is lower than the item weight, we will consider the item weight. Amazon uses a 100 gm packaging material. Hence, the Outbound shipping weight will be 3000+100 = 3100gms

The Delivery Service fee (per unit) = 1% of the item value

The Storage Fee calculated per cubic foot/month for all item types is Rs. 14.20.

Now, let us look at the fees.
The pick and pack fee will be INR 15
The weight handling shipping fee will be INR 165
The FBA Delivery service fee (1% of item value) will be INR 30
Total of this is INR 195. Service Tax of 14.5% = INR 28.27 is levied on this amount.

Hence, the total FBA Fees is INR 223.27 for Order X.

Fee preview helps you estimate fees for products in your FBA Inventory. To access this, go to Manage FBA Inventory under the Inventory tab at Seller Central and look at the Fee Preview column for your product. You will get an FBA fee estimate for that product.

Click here to learn how to change your fulfilment method to FBA and reap the benefits today!

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