Amazon Size Tier in FBA Fees Explained

Amazon FBA (Fulfillment by Amazon) is a popular program that allows sellers to store their products in Amazon’s warehouses and has them shipped directly to customers. However, as with any service, there are fees associated with using FBA, and understanding those fees is crucial to maximizing profits. One key factor that affects FBA fees is the Amazon Size Tier, which determines how much you pay for storage, fulfillment, and referral fees.

Today, we will discuss everything you need to know about Amazon Size Tier in FBA fees.

What is Amazon Size Tier in FBA Fees?

Amazon Size Tier is a system that Amazon uses to determine the fees associated with storing and fulfilling products using FBA. The size of a product is based on its dimensions (length, width, and height) and weight. The larger and heavier a product is, the more it costs to store and fulfill.

Amazon has five size tiers, ranging from Small Standard to Special Oversize. Each tier has specific size and weight limits, and products are placed into a tier based on the largest measurement of their dimensions or their unit weight. The five size tiers are:

1. Small Standard Size
2. Large Standard Size
3. Small Oversize
4. Medium Oversize
5. Large Oversize and Special Oversize

When determining the size tier of a product, Amazon uses the greater unit weight or dimensional weight. Dimensional weight is calculated by multiplying a product’s length, width, and height and then dividing that number by a dimensional factor determined by Amazon. This ensures that larger, bulkier products are charged appropriately, even if they don’t weigh as much as smaller products.

The size tier of a product affects the fees associated with using FBA in several ways. First, it impacts storage fees, which are charged on a monthly basis for the amount of space a product takes up in an Amazon warehouse. Products in larger size tiers generally take up more space and thus have higher storage fees.

Second, it affects fulfillment fees, which are charged for picking, packing, and shipping a product to a customer. Products in larger size tiers require more resources to fulfill and therefore have higher fulfillment fees.

Finally, it affects referral fees, which are charged as a percentage of the product’s sale price. Referral fees for products in larger size tiers are generally higher than for smaller products.

How to Determine Your Product’s Size Tier

To determine your product’s size tier, you will need to measure its dimensions and weight. Amazon uses the greater of the two to determine which size tier your product falls into. Here are the steps to determine your product’s size tier:

1. Measure the dimensions of your product. Using a tape measure or ruler, measure your product’s length, width, and height in inches. Round up to the nearest inch for each measurement. If your product has irregular dimensions, measure the longest, widest, and highest points.
2. Calculate the dimensional weight. Multiply the length, width, and height of your product in inches. Then, divide that number by a dimensional factor determined by Amazon. The dimensional factor varies based on the size tier and is designed to account for the amount of space the product takes up in an Amazon warehouse.

For example, the dimensional factor for Small Standard Size is 139, so the dimensional weight for a product with dimensions of 10 x 8 x 6 inches would be (10 x 8 x 6) / 139 = 3.88 pounds.

1. Weigh your product. Using a scale, weigh your product in pounds. Round up to the nearest pound.
2. Determine your product’s size tier. Compare the dimensional weight and unit weight of your product. Whichever is greater determines the size tier for your product. For example, if the dimensional weight of your product is 3.88 pounds, but the unit weight is 4.5 pounds, your product falls into the Large Standard Size tier.

Understanding FBA Fees for Each Size Tier

The FBA fees for each size tier depend on the size and weight of the product, as well as the type of product being sold. Here is a breakdown of the FBA fees for each size tier:

1. Small Standard Size

• Storage fees: $0.75 per cubic foot per month
• Fulfillment fees: $2.50 per unit + $0.30 per ounce
• Referral fees: 15% of the product’s sale price

Example: A small book that weighs 8 ounces and measures 6 x 4 x 0.5 inches falls into the Small Standard Size tier. The storage fees would be calculated based on the space the book takes up in the warehouse. The fulfillment fees would be calculated based on the weight and size of the book plus the per-unit fee. The referral fees would be 15% of the book’s sale price.

2. Large Standard Size

• Storage fees: $0.48 per cubic foot per month after the first 365 days of storage
• Fulfillment fees: $3.75 per unit + $0.38 per pound
• Referral fees: 15% of the product’s sale price

Example: A set of four dinner plates that weigh 2 pounds and measure 14 x 14 x 5 inches falls into the Large Standard Size tier. The storage fees would be calculated based on the space the plates take up in the warehouse. The fulfillment fees would be calculated based on the weight and size of the plates plus the per-unit fee. The referral fees would be 15% of the plates’ sale price.

3. Small Oversize

• Storage fees: $0.48 per cubic foot per month after the first 365 days of storage
• Fulfillment fees: $8.26 per unit + $0.38 per pound
• Referral fees: 15% of the product’s sale price

Example: A set of four throw pillows that weigh 3 pounds and measure 18 x 18 x 8 inches falls into the Small Oversize tier. The storage fees would be calculated based on the space the pillows occupy in the warehouse. The fulfillment fees would be calculated based on the weight and size of the pillows, plus the per-unit fee. The referral fees would be 15% of the pillows’ sale price.

4. Medium Oversize

• Storage fees: $0.48 per cubic foot per month after the first 365 days of storage
• Fulfillment fees: $11.37 per unit + $0.39 per pound
• Referral fees: 15% of the product’s sale price

Example: A folding table that weighs 30 pounds and measures 48 x 24 x 3 inches when folded falls into the Medium Oversize tier. The storage fees would be calculated based on the space the table takes up in the warehouse. The fulfillment fees would be calculated based on the weight and size of the table, plus the per-unit fee. The referral fees would be 15% of the table’s sale price.

5. Large Oversize and Special Oversize

• Storage fees: $0.48 per cubic foot per month after the first 365 days of storage
• Fulfillment fees: Varies based on the product
• Referral fees: 15% of the product’s sale price

Example: A large piece of exercise equipment that weighs 200 pounds and measures 60 x 40 x 60 inches falls into the Large Oversize and Special Oversize tier. The storage fees would be calculated based on the space the equipment takes up in the warehouse. The fulfillment fees would be calculated based on the weight and size of the equipment, plus any additional fees required.

Tips for Reducing FBA Fees

Reducing FBA fees can help increase profitability for Amazon sellers. Here are some tips for reducing FBA fees:

1. Optimize product packaging: Reducing the size and weight of a product’s packaging can help it fall into a lower size tier, which can lead to lower storage and fulfillment fees. Consider using minimal packaging materials or packaging that is specifically designed to be compact and lightweight.
2. Use the right size tier: It’s important to accurately measure and categorize products to ensure they fall into the correct size tier. Choosing the right size tier can help avoid additional fees and charges for incorrect categorization.
3. Avoid long-term storage fees: Amazon charges additional fees for products that have been in storage for more than 365 days. To avoid these fees, consider setting up a schedule for removing slow-moving inventory or reducing the amount of inventory stored in Amazon’s warehouses.
4. Take advantage of FBA programs: Amazon offers various programs, such as FBA Small and Light, that offer reduced fees for smaller and lighter products. By taking advantage of these programs, sellers can save money on storage and fulfillment fees.

Common Mistakes to Avoid

Here are some common mistakes that Amazon sellers make when it comes to Amazon size tier and FBA fees, along with advice on how to avoid them:

1. Incorrectly categorizing products: One of the most common mistakes is incorrectly categorizing products into the wrong size tier. This can result in higher fees and charges. To avoid this, take the time to accurately measure and categorize your products, and double-check your categorization before sending them to Amazon’s warehouse.
2. Overstocking inventory: Overstocking inventory can lead to higher storage fees and can tie up valuable capital.
3. Neglecting packaging optimization: Neglecting to optimize product packaging can result in higher storage and fulfillment fees. To avoid this, invest in compact and lightweight packaging and avoid using excessive packaging materials.

Frequently Asked Questions

What is Amazon size tier in FBA fees, and how is it determined?

Amazon size tier is a way to categorize products based on size and weight, impacting the Amazon FBA fees. Amazon uses dimensional weight to determine a product’s size tier, which is calculated by multiplying the package’s length, width, and height in inches and dividing by a dimensional factor.

What are the different Amazon size tiers, and how do they impact FBA fees?

There are six Amazon size tiers, ranging from small standard size to special oversize. Each size tier has different storage and fulfillment fee associated with it, as well as referral fees that are a percentage of the product’s sale price.

Can I change the Amazon size tier of my product?

Yes, you can change the Amazon size tier of your product by changing its dimensions or shipping weight.

Conclusion

Understanding Amazon size tier and FBA fulfillment fees is critical for maximizing profitability as an Amazon seller. We have discussed what Amazon size tier is, how it impacts FBA fees, and how to determine your product’s size tier and the FBA fees associated with each size tier. Additionally, we have provided tips for reducing monthly inventory storage fees, shipping fees, and avoiding common mistakes that can result in higher fees.

By implementing these tips and strategies, Amazon sellers can optimize their referral fees and fulfillment costs to maximize their profitability. It’s important to regularly review and adjust these strategies to ensure continued success and cost savings. By proactively managing FBA fees, Amazon sellers can stay competitive and achieve long-term success on the platform.