3 Hidden Amazon FBA Fees that Will Kill Your Profits (and what to do about them)

Fulfillment by Amazon FBA offers a lot of convenience for you as an Amazon Seller and we know that convenience helps you spend more time on revenue-generating activities in your business.

But, if you spend any time in the seller forums, you’ll see countless stories of longtime sellers frustrated with FBA. The complaints range from customers wrongly claiming fraud to high fees.

That’s why we wanted to give you a rundown of the top 3 hidden Amazon FBA fees and how they can hurt your profits.

And, of course, what you should do about each of these fees to minimize them!

Let’s jump in...

1. Missing or Defective Labeling Fees

Each item sent to Amazon requires very specific labeling so a product can easily move through their warehouse into your customer’s hands. They’ve designed the labeling to make it efficient for them, not for you.

And, when you make things less efficient for Amazon (even by accident), they’re going to charge you for it!

That’s why you must be sure to closely follow all the guidelines for labeling your shipments as well as your individual products.

To see if you’re hitting your mark, be sure to check your Date Range Reports on a monthly basis to see if fees are piling up in the labeling categories.

If the fees are getting too high, implement a strict checklist to ensure labeling mistakes are caught before they head out your door.

Don’t forget to track the entire cost of labeling (most people don’t).

If your company is doing its own labeling, be sure to include printing costs (ink, paper, printer wear-and-tear) and personnel costs when figuring out the fees that kill your profit.

If you’re outsourcing your labeling, be sure to include all the costs associated with it, including any time spent by your personnel managing the process.

2. Long-Term Storage Fees

You are probably aware that if your stock sits in Amazon’s warehouse for more then 6 months, they charge you fees for keeping it there.

Let’s make sure that doesn’t happen.

This one is pretty easy to track in the inventory reports as long as you’re paying attention! So be sure to run this report at least once a month to check your stock levels.

I recommend you categorize your aging SKUs into
“green”, “yellow”, and “red”.

“Green” - this is a hot seller and stock is rotating easily every 1-2 months.
“Yellow” - this is an ok seller and stock is rotating easily every 2-4 months.
“Red” - this is not selling well and stock is sitting and could cost you money.

When you see a SKU headed from “yellow” to “red”, take action!

Ways to Keep SKUs Out of the “Red” Zone and Avoid Fees:

- Improve your listing
- Create a better title, more compelling visuals, keywords, description, etc.
- Check for an identical/duplicate product listing
- If you find one, keep the one with better sales and make sure all your inventory is selling through that listing.
- Change the price
- This doesn't necessarily have to be lowering the price. Try increasing it by $0.01 and see what happens.
- Use pay-per-click ads to get more eyes to your product
- You’re not only restricted to Amazon here… you can use Google AdWords, Facebook Ads,  Pinterest Ads, Reddit Ads, YouTube Ads, etc… be creative!
- Run a flash sale to your email list
- If you have an email list, do a 48-hour flash sale for the item to get inventory moving.
- Once you’ve moved the SKU out of the “red” zone, be sure to ship lower quantities of the item to - Amazon to avoid the long-term storage fees.

3. Returns Processing

You’ve probably figured out most of the fees involved in a customer returning your product somewhere along the way in your Amazon journey. That’s great!

But... I’m willing to bet you’re missing a few ways to get fees back, especially when something goes wrong with the standard return process.

So let’s break down how the return process can go wrong to see if you can add some more money into your profit.

The 2 Most Common Ways FBA Returns Go Wrong

The Customer Requested a Return but Did Not Return the Product
Customers have 45 days to send back a return after they’ve requested it. But, sometimes they don’t.In this case, Amazon is supposed to charge the customer and reimburse you.Notice I said supposed to? That’s because it doesn’t always happen.
It’s pretty common that Amazon doesn’t mark that return as not returned and you don’t get reimbursed.

The Customer Says a Product is Damaged When It is Not
When a customer returns a product, it’s up to Amazon to determine if that product is still good enough to sell.If it is determined to be good enough for sale, it goes back into your inventory and you have some fees associated with it.If Amazon thinks it can’t be sold, then you’re out the cost of the product AND the fees.So, the question is, how much do you trust Amazon to determine if a product can still be sold?
Luckily, there is a way to handle both of these problems.

How Do You Fix These Common Problems?

By tracking your returns and clearly communicating with Amazon.

To track your returns, do the following:

Copy the order number from the refund notification email sent by Amazon (or find it in Seller Central at Reports > Fulfillment > Customer Concessions > FBA Returns).
In Seller Central go to Orders -> Manage Orders -> Advanced.
Enter the order number from step 1 and review the returns.
If the item is still sellable, check to see if the item made it back into your inventory by copying the ASIN number of the item and going to Inventory -> Manage Inventory. Copy the ASIN Number into the Search field. It should be there. If it isn’t, contact Amazon to find out why and get your stock back.

If the item is determined to not be sellable, you may want to make sure of that yourself. To do that, you can request a removal order to have that item sent back to you for inspection.

If you find that something went wrong in this complex process, contact Amazon to make sure you get the money you’re owed.

How Do You Minimize the Time it Takes to Stay on Top of Fees?

Simple, use SellerVue. We focus on your numbers so you can profit more.

Every month, our professional number-crunching analysts will give you the story behind your numbers, not just a dashboard to try and figure out.

So, all these hidden fees? We’ll have you covered so you can focus on generating more revenue.