FBA Fees Explained: How Amazon Sellers Can Cut Costs and Boost Profitability

TL;DR

• Amazon FBA fees include fulfillment, storage, removal, returns processing, and labeling charges, all impacting seller profitability.

• Oversized or slow-moving products often incur higher fees, reducing margins for many U.S. sellers.

• Regularly monitoring inventory and removing slow-moving stock helps avoid costly long-term storage fees.

• Managing labeling and prep in-house or with third parties can save money compared to Amazon’s service fees.

• Using Amazon’s Fee Preview and profit margin calculators enables smarter pricing and cost control decisions.

• Beyond fee cuts, boosting average order value, improving listings, and running targeted ads increase overall profitability.

Feeling like your FBA fees are eating into your profits? 

Many Amazon USA sellers find that even with strong sales, their bottom line doesn’t reflect the effort—often due to hidden or misunderstood FBA charges. Fulfillment by Amazon (FBA) offers powerful advantages: faster shipping, Prime eligibility, and simplified logistics. But along with that convenience comes a complex fee structure that can quietly add up—unless you actively manage it.

From per-unit handling and monthly storage fees to returns processing and labeling charges, every detail impacts your margins. So, if your products are oversized, slow-moving, or frequently returned, those costs climb even faster.

The good news? Amazon FBA fees in the USA aren’t fixed. With the right insights and strategies, you can manage them effectively and unlock better profitability.

This blog breaks down exactly what Amazon charges, why some sellers overpay, and practical steps you can take to reduce fees while growing your business. 

Let’s make your FBA setup work smarter, not costlier.

Understanding FBA Fees for Amazon Sellers

1. Fulfillment fees (per unit handling, picking, packing, shipping)

Understanding FBA fees is essential for any Amazon USA seller who wants to maintain healthy profit margins. One of the core components of FBA costs is the fulfillment fee, which covers the process of picking, packing, and shipping your products to customers. This fee is charged per unit and varies based on the item’s size and weight.

Amazon handles everything once your inventory is in their warehouse—from receiving the order to delivering it to the customer’s doorstep. While this is highly convenient, the costs can add up quickly, especially if you're not aware of how these fees are calculated.

In 2025, Amazon introduced more granular pricing tiers to reflect variations in packaging size, weight, and delivery speed. 

For example, a small, lightweight item like a phone charger will incur much lower fees than a large, bulky kitchen appliance. Even slight increases in package dimensions or weight can push your product into a higher fee bracket.

Many sellers overlook how small adjustments—like reducing product packaging or removing unnecessary inserts can keep them in a lower pricing tier. It’s also important to factor in peak-season surcharges, which apply during high-demand periods like Q4.

Tools:

In short, understanding how fulfillment fees work and how to optimize for them is key to protecting your margins and making the most of your FBA advantage.

By applying strategies to reduce FBA costs, such as adjusting packaging size, bundling products, or improving inventory turnover, you can ensure you’re not overpaying on fees and can boost overall profitability.

2. Storage fees

Storage fees are one of the most overlooked but impactful components of Amazon’s FBA fee structure. For Amazon USA sellers, understanding how these fees work and how to manage them can make a significant difference in overall profitability.

Amazon charges monthly storage fees based on the amount of space your inventory occupies in its fulfillment centers. These fees vary depending on the time of year: they’re higher from October through December due to increased holiday demand.  But the real challenge comes with long-term storage fees. This can quickly add up and cut deep into your margins.

These fees are designed to encourage sellers to manage inventory efficiently and avoid using Amazon as a long-term warehouse. Slow-moving products, seasonal items, or poor demand forecasting can lead to unnecessary costs.

To reduce storage fees, regularly review your inventory performance. Use Amazon’s inventory age and excess inventory reports to identify slow-moving SKUs. Consider running promotions or removing aged stock before the 365-day mark. 

You can also store some inventory off-Amazon and replenish FBA centers as needed. Smart FBA inventory management isn’t just about avoiding fees, it's about maintaining healthy cash flow and keeping your business lean and agile.

3. Removal and disposal fees

When managing inventory through Fulfillment by Amazon (FBA), removal and disposal fees are often overlooked but they can quietly cut into your profits if not properly monitored. For Amazon USA sellers, understanding how these fees work is key to keeping FBA costs in check and making smarter inventory decisions.

What are removal and disposal fees?

These are charges Amazon applies when you request unsold inventory to be returned to you (removal) or destroyed (disposal). As of 2025, these fees are calculated based on the product’s size and weight and are charged per unit. Rates can vary during peak seasons or if you exceed storage thresholds.

Why do they matter?

If you’re sitting on excess or unsellable inventory due to poor sales, returns, or seasonal demand shifts, those units still incur monthly storage fees. Over time, this adds up. Removing or disposing of them may seem like a cost-saving step, but if done inefficiently, it can result in unnecessary expenses.

When to act:

Review your inventory regularly using amazon’s inventory health report. Identify slow-moving SKUs, stranded inventory, or excess stock well before long-term storage fees kick in. Plan removals during non-peak periods when fees may be lower.

Smart strategy:

Combine regular inventory clean-up with better forecasting and listing optimization. This reduces the need for removals in the first place.

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In short, removal and disposal fees aren’t just operational—they’re strategic. Managing them well helps protect your margins and keeps your FBA account financially healthy.

4. Returns processing fees

Returns are a normal part of selling on Amazon, especially for categories like apparel, electronics, and home goods. But what many sellers don’t realize is how returns can quietly chip away at their profits through Amazon’s returns processing fees.

If you're enrolled in FBA, Amazon handles customer returns on your behalf. This includes receiving the returned item, inspecting it, and restocking it when possible. In return, Amazon charges you a return processing fee, which typically mirrors the original fulfillment fee charged when the item was first shipped. This fee applies to specific categories where returns are high, such as clothing and shoes.

For example, if you sell a pair of running shoes and pay a $5 fulfillment fee when it is shipped, you’ll likely be charged a similar amount again when the product is returned, even if the item is still sellable.

While this service saves time, it can become expensive if your return rate is high. Frequent returns often point to deeper issues, such as misleading product images, unclear sizing, or quality problems. To reduce these fees, focus on minimizing returns. 

You can improve your product detail pages, provide accurate sizing charts, use high-quality images, and ensure your product quality meets expectations for product ranking on Amazon. 

Fewer returns mean fewer processing fees and better margins for your business. So, understanding and managing this fee is essential for staying profitable on Amazon.com.

5. Labeling and prep service fees

When using Fulfillment by Amazon (FBA), sellers are responsible for making sure their products meet Amazon’s strict labeling and prep requirements. If not, Amazon will do it for you—for a fee. These labeling and prep service fees may seem minor at first, but they can add up quickly and significantly impact your margins, especially if you manage a large catalog or ship in high volume.

Labeling fees apply when products arrive at Amazon's fulfillment center without scannable barcodes. Amazon will apply the necessary FNSKU label at a cost typically around $0.30 per unit. Prep service fees, on the other hand, cover tasks like bagging, bubble wrapping, taping, or boxing products that need extra handling to meet safety or presentation standards.

For Amazon USA sellers, using these services can be convenient, especially if you’re working with multiple suppliers or don’t have the infrastructure to prep products in-house. However, relying on Amazon for every unit can erode your profitability.

To reduce costs, consider managing labeling and prep at your warehouse, or work with a third-party prep center. Be sure to understand Amazon’s prep and packaging requirements before shipping your inventory non-compliance may lead to delays, added fees, or rejected shipments.

Staying proactive about labeling and prep can help streamline your FBA process while protecting your bottom line. It’s a small detail that, when handled efficiently, makes a big difference.

Common reasons sellers overspend on FBA fees

• Oversized or overweight products: Many Amazon USA sellers unknowingly lose profits due to avoidable FBA fees. One of the most common culprits is oversized or overweight products. Even a slight increase in dimensions can push your item into a higher fee tier, significantly raising fulfillment costs per unit.

• Slow-moving inventory incurring long-term storage fees: Slow-moving inventory is another major issue. Products that sit too long in Amazon’s warehouses accumulate monthly storage fees and may eventually incur long-term storage charges—especially if not removed in time.

• Poorly optimized packaging or prep requirements: Poorly optimized packaging and prep can also lead to extra costs. If your products don’t meet Amazon’s prep requirements, you’ll be charged for labeling, bagging, or other services that could’ve been handled more affordably in-house.

• High return rates due to product or listing issues: high return rates due to unclear listings or product quality issues add to your expenses through returns processing fees and potential damage write-offs.

Strategies to cut costs and boost profitability

Cutting FBA costs doesn’t always mean slashing budgets; it often means making smarter choices. For Amazon USA sellers, even small tweaks in product setup, listing quality, or inventory management can lead to meaningful savings and better profitability. Here’s how to take control of your FBA fees and boost your bottom line.

1. Optimize product size and weight 

FBA fees are heavily influenced by your product’s dimensions and weight. If an item tips into the “oversize” category—even by a fraction—it can significantly raise your fulfillment costs. Review your packaging design and materials. Could you reduce the box size, remove extra padding, or adjust product design slightly without affecting quality? Every inch and ounce matters when Amazon calculates your fees.

2. Regularly monitor and remove slow-moving inventory

Amazon charges monthly storage fees, and if items sit too long, long-term storage fees kick in. Keep a close eye on your inventory age using tools like the Inventory Age report. Set automated reminders to remove or discount items before they become a liability. You can also create removal orders or liquidate products to avoid accumulating storage costs unnecessarily.

3. Handle labeling and prep in-house

Amazon offers labeling and prep services, but they come at a cost. If you have the capacity to handle this yourself—or work with a prep center that charges less—it can add up to major savings over time. Just be sure to follow Amazon’s FBA product preparation guidelines closely to avoid non-compliance fees.

4. Use Amazon’s fee preview 

Many sellers overlook the built-in Fee Preview Report in Seller Central. This tool estimates fulfillment fees per SKU, helping you identify costlier products and plan accordingly. Use it before launching new SKUs or changing packaging to avoid surprises later.

5. Improve listings and product quality

High return rates drive up costs, especially when Amazon charges return processing fees. Make sure your product images, descriptions, and bullet points set clear expectations. Invest in better quality control and consider gathering feedback from early buyers to resolve issues quickly.

By implementing these five strategies, Amazon USA sellers can reduce unnecessary costs, protect their margins, and set up a more profitable FBA operation without compromising customer satisfaction or growth potential.

Moreover, USA sellers can use the Amazon profit margin calculator to better understand their true costs and identify savings opportunities.

By analyzing fees, shipping, and product costs, sellers can adjust pricing, reduce expenses, and improve margins. Smart cost management is key to boosting long-term profitability on Amazon.

Boosting profitability beyond fee reductions

• Increase average order value (AOV): This can be done by bundling complementary products, offering multi-pack options, or using promotions like “Buy 2, Get 10% Off” to encourage larger purchases.

• Improve conversion rates: Make sure your product listings are clear, compelling, and optimized with high-quality images, bullet points, and enhanced content. A well-optimized listing turns clicks into sales, maximizing the return on every visit.

• Run targeted ads: Targeted advertising also plays a key role. Instead of running broad campaigns, use Sponsored Products, Brands, and Display ads with refined targeting to reach high-intent shoppers.

• Analyze your margins regularly: track how changes in pricing, fees, and ad spend affect your profits. Profitability isn't just about selling more—it's about selling smarter. A well-rounded strategy ensures every dollar works harder for your business.

Ready to make your FBA business more profitable?  

FBA fees can quietly eat away at your margins, but with the right knowledge and proactive strategies, Amazon USA sellers can take control of their costs and boost long-term profitability. From optimizing product size and inventory management to improving listings and running smarter ads, every detail counts when aiming for strong Amazon seller profitability.

Remember, profitability doesn’t stop at fee reductions—it's about understanding your numbers, making informed decisions, and continuously adapting. Tools like the Amazon profit margin calculator and Fee Preview Report can offer valuable insights, but execution matters just as much.

If managing all of this feels overwhelming, partnering with an experienced Amazon FBA marketing agency can help simplify the process and drive better results. Start with smarter strategies—and the right support.