How Amazon FBA fees actually work (and where sellers lose money)

Most sellers know Amazon takes a cut. Far fewer can tell you, per order, exactly how much and why. That gap is where margin quietly disappears. Here is how the main FBA charges work.

1. Referral fee

A percentage of the total sale price (item + shipping), charged on every sale regardless of fulfilment method. In India it is typically 5–17% depending on category. It is calculated on the price the customer pays, so discounts reduce it, but so does your margin.

2. Fulfilment (pick & pack) fee

A flat, weight- and size-based fee for FBA orders that covers picking, packing and shipping. Oversized and heavy items cost dramatically more, which is why bulky low-price products often lose money on FBA even when they "sell well".

3. Storage fees

Charged per cubic metre of space your inventory occupies, monthly, and higher in peak season (Oct–Dec). Aged inventory (stored 270+ days) attracts long-term storage surcharges. Slow-moving SKUs are the usual culprit.

4. The costs sellers forget

• Returns processing. You often pay the fulfilment fee even on returned units.
• Removal/disposal: clearing stranded or aged stock has its own fee.
• Reimbursement gaps. Amazon owes money for lost/damaged units that is never claimed automatically.

What to do about it

Build a per-SKU P&L that subtracts every fee from the actual settlement, not an estimate. Once you can see net profit per unit, the decisions become obvious: which SKUs to push, which to reprice, and which to stop sending to FBA. This is exactly the clarity our client portal is built to give.