Amazon glossary
What is FBA?
FBA — Fulfilment by Amazon.
By AIAdKing Editorial Team · Reviewed
- FBA — Fulfilment by Amazon
- FBA (Fulfilment by Amazon) means you send stock to Amazon’s warehouses and Amazon stores, packs, ships and handles returns and customer service. FBA products get Prime, usually win the Buy Box more easily, but pay storage and fulfilment fees.
In depth
With FBA, Amazon owns the logistics: storage, picking, packing, shipping, returns and most customer service. The upside is Prime eligibility, faster delivery promises and stronger Buy Box performance; the cost is a stack of fees — per-unit fulfilment by size tier and weight, monthly storage that rises sharply in Q4, long-term storage surcharges past 365 days, and returns processing in some categories. The reason this belongs in an ads glossary: those fees define your contribution margin, and margin defines your break-even ACoS, so a seller who underestimates FBA fees by $1.50 a unit is optimising ads against a target that does not exist. Run the complete per-unit math in the Amazon profit calculator, see the FBA fees guide for the full fee taxonomy — and compare against FBM per SKU, not on ideology.
Worked example
A $24.99 gadget: FBA fulfilment fee $5.06, monthly storage about $0.30/unit, referral fee 15% ($3.75), product cost $6.00. Per-unit profit before ads = $24.99 − $5.06 − $0.30 − $3.75 − $6.00 = $9.88 — a 39.5% margin, and that percentage is your break-even ACoS. Miss a fee — long-term storage after 365 days, return processing on apparel — and every downstream ad decision is computed on fiction. Ship the same unit FBM at $6.50 actual courier plus packaging and the comparison becomes a per-SKU line item, not a guess.
When to use it
Recheck FBA economics whenever Amazon updates fee schedules (usually annually), when packaging changes a product's size tier, and before Q4 — storage costs roughly triple in October–December and can flip a marginal product to a loss.
Common mistakes
- Computing margin from the fulfilment fee alone — monthly storage, long-term storage and removal fees are the quiet killers on slow movers.
- Ignoring size-tier boundaries — a centimetre of packaging can move a product into a higher fee tier and erase a quarter of its margin.
- Letting stale COGS sit in your tools — fee-accurate profit per SKU is the input every serious ad decision depends on.
How AIAdKing handles FBA
AIAdKing pulls your FBA fees and inventory from Amazon to compute true profit per SKU after every fee, and forecasts restock and stockout dates so you don’t pay long-term storage or run out.
FBA — quick answers
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