In order to make a profit on Amazon, it’s imperative that you understand what fees to expect. If your product profit margins aren’t enough to offset what you pay in fees, your business is doomed.
For sellers that list the same products on multiple platforms, one type of fee you may need to be aware of in your calculations is Amazon multi-channel fulfillment (MCF) fees.
MCF fees only come into play for Amazon sellers who make use of the company’s MCF service. Amazon Multi-Channel Fulfillment is an option available to sellers enrolled in the FBA program.
In addition to having Amazon take care of fulfillment for all the orders that go through the Amazon platform, you can outsource that work for orders that come through other channels as well. Once an order is placed through your website or another third-party platform, Amazon MCF works a lot like Fulfillment By Amazon (FBA) does, just with a different set of fees.
Amazon Multi-Channel Fulfillment fees are levied anytime a product you sell through another platform is fulfilled by Amazon. MCF fees can be as low as under $4 for small, lightweight, multi-unit orders and can go up to nearly $200 for special oversize items. You can see the exact breakdown of MCF fees based on order weight, unit size, and shipping speed on Amazon’s page about the subject.
If you think you’ll be using MCF, then there are a few things to understand before you get started.
Amazon uses product size tiers and weight to calculate MCF fees. The size tiers are those FBA sellers are likely already familiar with: small standard, large standard, small oversize, medium oversize, large oversize, and special oversize. Amazon provides a few main categories for shipping weight for each product tier, with fees going up as the weight exceeds each one. The greater of unit weight or dimensional weight will be used to calculate the shipping weight for all large standard, small oversize, medium oversize, and large oversize items, including for apparel products.
In addition to product and weight, the speed of shipping is another factor in MCF fees. MCF includes standard shipping, two-day shipping, and next-day shipping options at different rates.
Standard shipping (3-5 days) incurs lower fees than expedited two-day shipping, and priority 1-day shipping is the highest cost. Priority shipping does have fewer weight tiers though, so calculating your fees for products fulfilled at this faster speed will be a bit simpler.
While the service Amazon provides with MCF is similar in many respects to what it does with FBA, the cost of MCF fees will be higher. Amazon has more incentive to encourage sales through its platform than via other channels, so it makes sense that sales made through the Amazon website would cost a little less.
That only applies to the fees for fulfillment, though. Storage and labeling fees are still the same for both MCF and FBA.
For anyone that’s been using MCF all this time, you may need to readjust your calculations. On January 19, 2023, MCF fees will undergo a pretty significant increase due to the rising costs of fulfillment and transportation amid uncertain economic times.
Additionally, surcharges now apply to orders in Hawaii, Puerto Rico, the US Virgin Islands, and Alaska.
Make sure you update your math accordingly and figure out if you need to increase product prices to make up the difference. You can see a full breakdown of the 2023 US MCF fee changes in Seller Central.
If you list your products on a number of channels, you have to be cautious about which third-party platforms you use MCF with. Some, including Walmart and eBay, have guidelines against using Amazon fulfillment for products sold through their platform. If you want to use MCF, but still be able to sell through these platforms, Amazon now provides the option to block orders from using Amazon fulfillment.
You can either block MCF orders at the account level or do so for individual orders as they come in. However, doing so will incur an additional 5% surcharge.
Fees are a part of life when selling through Amazon. But if you’re not careful, all the little fees can start to cut into your bottom line. It’s important to think carefully about each service you consider with Amazon to make sure the fees are worth what you get in return.
For some businesses, MCF fees may not make sense when you do the math. For many others though, the convenience of keeping more of your inventory storage and management in one place can reduce your workload quite a bit. And being able to outsource packaging and shipping while taking advantage of Amazon’s ability to deliver at top speeds may be well worth the cost for your business. You’ll have to do the calculations for yourself to determine if it pays off for you.
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