What is Amazon FBA? Fulfillment by Amazon Explained
Quick Definition
FBA (Fulfillment by Amazon) is a service where Amazon stores your products, picks, packs, and ships orders to customers, and handles customer service and returns.
How FBA Works
You ship your products to Amazon's fulfillment centers. When a customer orders, Amazon picks the item from their warehouse, packs it, and ships it with Prime-eligible delivery. Amazon also handles customer service inquiries and processes returns. You manage product selection, pricing, inventory replenishment, and marketing.
FBA Fees
FBA charges two main fees: a fulfillment fee (based on item size and weight, typically $3–$8 per unit for standard items) and a monthly storage fee ($0.87–$2.40 per cubic foot depending on time of year). Additional fees may apply for long-term storage (items sitting over 365 days), removal orders, and returns processing.
FBA vs FBM (Merchant Fulfilled)
FBA products get the Prime badge, which significantly increases conversion rates. However, FBM gives you more control over packaging, branding, and margins. Many sellers use a hybrid approach — FBA for best sellers and FBM for slow-moving or oversized items. Use a profit calculator to compare the economics for each product.
Getting Started with FBA
Start by creating a Professional Seller account ($39.99/month). Source your product, create your listing with optimized keywords, ship inventory to Amazon using their Seller Central tools, and launch with PPC advertising. Most successful FBA sellers spend significant time on product research before committing to inventory — this is where tools like AstroMarket save weeks of manual work.
FBA Calculators and Tools
Before sourcing, use an FBA calculator to model your profitability. Amazon's own Revenue Calculator provides basic estimates. Jungle Scout, Helium 10, AMZScout, and Keepa all offer FBA calculators — typically requiring a paid subscription. AstroMarket's free FBA Profit Calculator and FBA Fee Estimator let you model margins, fees, and ROI without any signup, covering referral fees, fulfillment costs, and monthly storage across all Amazon categories.
Related Terms
Amazon BSR
Amazon BSR is a numerical ranking that shows how well a product sells relative to others in its category. A lower BSR means higher sales volume.
ASIN
An ASIN is a unique 10-character alphanumeric code that Amazon assigns to every product in its catalog. It's used to identify and look up specific products.
Private Label
Private label is a business model where you source generic products from manufacturers and sell them under your own brand name with custom packaging, logos, and modifications.
COGS
COGS is the total direct cost of producing or acquiring the products you sell. It includes manufacturing, materials, and freight — but not marketing, rent, or salaries.
Profit Margin
Profit margin is the percentage of revenue that remains as profit after subtracting all costs. For e-commerce, this includes product cost, platform fees, shipping, and advertising.
FBA Calculator
An FBA calculator estimates your profit per unit by subtracting Amazon fees (referral, fulfillment, storage), product costs, shipping, and advertising from your selling price.
Amazon FBA Fees
Amazon FBA fees include a referral fee (8-20% of selling price), a fulfillment fee ($3-$10+ per unit based on size/weight), and monthly storage fees ($0.87-$2.40 per cubic foot).
Put Amazon FBA data to work
AstroMarket analyzes amazon fba alongside competition, trends, sourcing costs, and social signals — all in one AI-powered report.