Amazon FBA Return Fee, What is it, and How much?

Amazon FBA Return Fee

What is Amazon FBA Return Fee?

The Amazon FBA Return Fee covers receiving, storing, processing, and shipping the returned items. This fee is mandatory for all sellers who use FBA for their orders. Amazon takes the product refund, and the FBA returns fee from the seller’s account when a customer initiates a return. Amazon then evaluates the returned items for their condition.

The amount of the return fee varies depending on factors like the

  • Product’s category
  • Size
  • Weight

Knowing how much the fee is can help you better manage your business and prepare for potential returns. When a customer returns a product, Amazon evaluates its condition, and the next steps are determined based on whether the item is in a sellable or unsellable condition. If the item is deemed sellable, it is returned to your FBA inventory, and a return fee is charged.

Sellers can use Amazon’s FBA fee calculator. By entering the specific details of their products, such as the price, shipping costs, storage fees, and cost of goods sold, sellers can compare the costs of self-fulfillment and Amazon FBA, including the potential returns processing fees.

How Much is the Amazon FBA Return Fee?

When dealing with Amazon FBA returns, knowing the fees involved is essential. The main cost you’ll encounter is the returns processing fee. Amazon charges this fee to process, inspect, and restock the returned items, ensuring they meet the necessary standards before being shipped to customers again.

Size categoryShipping weightReturns fee
Small standard4 oz or less$2.12
4+ to 8 oz$2.16
8+ to 12 oz$2.23
12+ to 16 oz$2.32
Large standard4 oz or less$2.40
4+ to 8 oz$2.44
8+ to 12 oz$2.53
12+ to 16 oz$2.61
16+ oz to 1.5 lb$2.71
1.5+ to 2 lb$2.81
2+ to 2.5 lb$2.95
2.5+ to 3 lb$3.13
3+ lb to 20 lb$3.41 + $0.20/lb above first 3 lb
OversizeSmall$4.19 + $0.20/lb above first 2 lb
Medium$10.57 + $0.25/lb above first 2 lb
Large$43.70 + $0.25/lb above first 90 lb
Special$75.08 + $0.25/lb above first 90 lb

The returns processing fee varies depending on the product category. For example, in the Apparel and Shoes categories, Amazon recently reduced the fee rates by an average of $0.20 per return. Other product categories such as Watches, Jewelry, Luggage, Handbags, and sunglasses do not charge returns processing fees for items returned.

In addition to the returns processing fee, as an FBA seller, you’ll also need to account for reimbursement policies. Amazon typically credits your account for all or part of the Selling on Amazon referral fee and, where applicable, the variable closing fee for a returned item. This means that when you receive a returned item, you may be reimbursed a portion of the fees you initially paid on the sale.

Keep in mind that storage fees may also apply to returned items. For instance, non-peak storage fees increased by $0.04 per cubic foot for standard-size items and $0.03 per cubic foot for oversized items. These fees for storing your products in Amazon’s warehouses can increase over time.

Amazon’s FBA Return Policy and Customer Service

Amazon’s FBA (Fulfillment by Amazon) has a set of guidelines that assist sellers in managing returns. The return process occurs in a few steps. First, customers initiate the return, and Amazon handles it based on their policy. The customer may receive a refund based on the return reason, and then Amazon assesses the item’s condition.

Sellers benefit from the return process as Amazon ensures customer satisfaction. Exceptional customer service is provided to buyers, including returns for eligible items in specific categories within 30 days. Items in the Baby category experience an extension, allowing customers to return products in new, unopened condition for up to 90 days. For those returns, Amazon covers shipping costs, saving sellers valuable resources.

The Amazon FBA return fee plays a vital role in this process. It’s the fee charged to sellers once the customer receives a refund for their returned product. A critical aspect is that the item’s condition affects the fee. If Amazon deems the item returned in sellable condition, it gets added to the FBA inventory. Otherwise, if not sellable, Amazon may dispose of or return the item to the seller.

Amazon FBA return fees typically range from $2.12 to $3.41 (+ $0.20/lb above the first 3 lb) in standard size category. Sometimes, sellers could be reimbursed for the return fees if the return is unauthorized or falls under specific protections.

Breakdown of Amazon FBA Fees

Referral Fees

Amazon charges a referral fee based on the item’s price percentage. This fee varies depending on the category and, in some cases, the item’s price. The percentage ranges between 8% and 45%, with an average of around 15% for most products.

Fulfillment Fees

Amazon FBA Fees

Fulfillment fees are calculated based on the item’s size, weight, and category. This is also known as the pick-and-pack fee, which covers finding, labeling, and shipping the items to customers. For standard-size items weighing 4 lb or less, the fee ranges from $3.22 to $7.17. For larger or heavier items, the fee will be higher.

Storage Fees

Amazon charges storage fees for inventory stored at their fulfillment centers. These fees are based on the storage space measured in cubic feet. Monthly storage fees vary depending on the time of year but generally range from $0.87 to $2.40 per cubic foot for standard-sized items and $0.56 to $1.40 for oversized items.

Removal Order Fees

If you decide to remove your inventory from Amazon’s fulfillment center, you’ll incur a removal order fee. The cost depends on the item’s size, weight, and the removal method (return or disposal). Return fees range from $0.97 to $2.83 (+ $1.06/lb above 2 lb) per standard-sized item. Oversize and special handling items range between $3.12 to $13.05 (+ $1.06/lb above 10 lb).

Labeling Fees

If your items require labeling, but you don’t provide labels, Amazon may do so for a fee. The current fee for labeling is $0.55 per item. This cost also applies to cover non-compliant barcodes. Learn more about labeling requirements.

Closing Fees

Media items like books, DVDs, and video games are subject to a closing fee of $1.80 per unit and a referral fee. This cost helps cover the shipping and customer service for the item.

Returns Processing Fees

The FBA returns processing fee applies when customers return products in the Apparel and Shoes categories. Amazon does not charge a processing fee for returned items in watches, jewelry, luggage, handbags, and sunglasses categories.

Amazon FBA Shipping and Product Size

When you use Amazon FBA (Fulfillment by Amazon), it’s crucial to understand the shipping and product size requirements. This ensures that your products are handled properly during storage, packaging, and transit and affects the fees you incur. Here, we’ll look at some key factors, including how to calculate shipping weight and the significance of product size.

Firstly, familiarize yourself with Amazon’s product size categories, as your item’s dimensions will ultimately influence your fulfillment costs. There are two primary categories: standard-size and oversized items. Standard-size products are those whose longest side is less than 18 inches, the shortest side is less than 14 inches, and the median side is less than 8 inches. Oversized items, conversely, exceed at least one of these dimensions.

Calculating your product’s shipping weight is also essential to using FBA. To do this, consider the weight of both your product and its packaging. The shipping weight is either the unit or the dimensional weight (whichever is greater). Amazon uses the following formula to calculate the dimensional weight: length x width x height (in inches) divided by 166.

Consider a few practical examples. A small book weighs 0.5 lbs, and its dimensions are 7 x 5 x 0.75 inches. It would be categorized as a standard-size item. Meanwhile, a decorative lamp weighing 2.75 lbs with dimensions of 14 x 14 x 20 inches would be considered oversized.

Being mindful of Amazon FBA’s shipping and product size requirements is vital, as it directly affects your fees incurred, warehouse storage, and packaging. By accurately calculating shipping weight and classifying your products, you can better manage your inventory and gain control over your FBA costs.

Exploring the Advanced Features of the FBA Calculator

Amazon’s Fulfillment by Amazon (FBA) service offers convenience for sellers, but it’s crucial to understand the associated fees. Navigating these fees becomes easier with the help of FBA fee calculators and reports.

Using FBA Fee Calculators

FBA fee calculators help you determine the exact fees you’ll incur when using Amazon’s fulfillment service. To use these calculators, input the necessary information for your product, such as dimensions, weight, and category. The calculator will then generate an overview of the fees you can expect to pay. It will include fulfillment fees, storage fees, and referral fees.

One popular calculator is the MarketGap Amazon/FBA fee and profit calculator. This tool clearly shows your fees and costs while using Amazon FBA. While browsing through Amazon, you can also use the Chrome FBA Calculator from MarketGap to see every product’s FBA fees and monthly sales.

Understanding Reports in Amazon Seller Central

Seller Central provides various reports that help you stay on top of FBA fees. To access FBA reports, log in to your Amazon Seller Central account and navigate to the ‘Reports’ menu. Here, you’ll find three key reports:

  1. Monthly Inventory Storage Fees: This report details the fees you’ve been charged for storing your products in Amazon fulfillment centers. Make sure to review it regularly to avoid unexpected fees.
  2. Aged inventory surcharge: Inventory stored for over 180 days may incur additional fees. Stay informed by reviewing this report monthly.
  3. FBA Fee Preview: This report estimates the future fees you’ll be charged for different FBA services. Review it to understand your expected expenses better.

Navigating Amazon’s FBA fee structure can be complex. Still, using calculators and reports provided within Amazon Seller Central, you can confidently manage your fees and make informed decisions about using the FBA service.

Selling Categories and Amazon FBA

When listing products on Amazon using their Fulfillment by Amazon (FBA) service, you need to know the fees associated with returns, as they can impact your bottom line. Your expenses will vary depending on the type of product you sell and its specific category. Some popular categories include apparel, shoes, watches, jewelry, pets, and business products.

Amazon takes the money for the product refund and the FBA return fee from your account when a product is returned. The returned item then goes through an evaluation process to assess its condition before deciding to restock it in your FBA inventory if it’s deemed sellable. But keep in mind that the FBA fee is not refundable.

FBA fees differ based on several factors, including the item’s size, weight, and product category. Familiarizing yourself with Amazon’s rate cards is crucial to determining each product category’s fees.

Additionally, storage fees can impact your business, as these charges also depend on the product’s dimensions. In 2023, non-peak storage fees for standard-size items will increase by $0.04 per cubic foot, while oversized items will increase by $0.03 per cubic foot. On April 15th, 2023, an aged inventory surcharge will be applied to items in Amazon warehouses for 180 days or more, excluding categories like watches, apparel, shoes, and jewelry.

Adjusting your strategies to cope with return fees and changes will make your business more resilient. Analyzing the fees for your specific categories and planning accordingly can help you stay ahead of the competition and maintain profitability.

Amazon FBA New Selection and Small and Light Program

Amazon FBA, or Fulfillment by Amazon, is a service that helps sellers outsource order fulfillment to Amazon’s global network of fulfillment centers, offering benefits like free two-day shipping for Prime customers. This service includes various programs, such as the FBA New Selection and Small and Light Programs, designed to help you manage your inventory, save on fees, and expand your customer base.

The FBA New Selection Program offers benefits like free sponsored ads, promotional clicks, shipping, storage, removals, and returns on eligible new products. Launched on April 1, 2021, it aims to support new sellers and newly launched products in FBA warehouses. To qualify, your products must meet the program’s eligibility criteria.

On the other hand, the FBA Small and Light Program focuses on reducing fulfillment costs for items with a certain weight and price threshold. This allows you to pass the savings on to your customers, making your products more appealing. By enrolling in this program, you’ll receive benefits like free shipping for Prime customers, helping boost your sales potential. The eligibility price for this program has increased from $10 to $12, expanding the range of items you can include.

When it comes to packaging and inventory management, both programs have their unique requirements. In the Small and Light Program, ensure your items meet the size and weight limitations. In contrast, the New Selection Program requires you to pay attention to the product’s eligibility for a new product or a new seller.

In conclusion, taking advantage of Amazon FBA programs like the New Selection and Small and Light Program can benefit your online store. By carefully analyzing your inventory and aligning it with the right program, you can optimize your Amazon FBA experience and enhance your profitability.

The Profitability of Amazon FBA

As an Amazon FBA seller, understanding your return fees is critical to managing your business. By being aware of these fees, you can effectively forecast your cash flow and maintain profitability. Amazon FBA fees are generally non-refundable and are charged when a unit is sold. However, FBA businesses often enjoy higher profits due to streamlined inventory management, cost reductions, and increased sales volume.

Amazon FBA is primarily an investment that revolves around your sellable products and the business model’s efficiency. As you grow your FBA business, you will notice a direct correlation between successful inventory management and your sales volume. A well-managed inventory helps avoid excess storage costs and could contribute to reducing losses.

An essential aspect of maintaining profitability in your FBA business is understanding Amazon’s selling fees. These include referral fees, typically 15% of the item’s selling price. Additionally, you must account for fulfillment fees, which cover the cost of Amazon handling order fulfillment and shipping.

Understanding and tracking your product sales and fees precisely can help you achieve the desired profitability with Amazon FBA. Maintaining a comprehensive record of your fees, margins, and sales volume will allow you to minimize costs, increase revenue, and optimize your overall success.

Remember, the key to a successful FBA venture lies in your ability to remain attentive to your business’s performance metrics and adjust accordingly. By staying diligent in managing your inventory and accounting for Amazon FBA fees, you can continue to grow a highly profitable business.

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