Ravi sells handmade cotton throws from Jaipur to buyers in the US on Amazon. His products move well. Yet at the end of a strong quarter, his margin is thinner than his spreadsheet promised. Two things quietly ate it: Amazon's fulfilment fees, and the cost of turning dollars into rupees in his bank account.

Most sellers obsess over the first cost and ignore the second. This guide covers both. It breaks down how Amazon FBA fees actually work, then looks at the payment and foreign-exchange costs that sit between a completed sale and the money that lands in your account, because for an Indian seller exporting through Amazon, that second gap is often the larger one.

What are Amazon FBA fees?

Amazon FBA fees are the charges you pay to use Fulfilment by Amazon, where Amazon stores your inventory, then picks, packs, ships, and handles customer service and returns for you. Instead of running your own warehouse and courier setup, you send stock to Amazon's fulfilment centres and Amazon runs the logistics.

In short: FBA trades operational effort for a set of per-unit and ongoing fees. What you pay depends on your product's size, weight, category, how long it sits in storage, and which optional services you use. Getting these numbers right before you list is what keeps a fast-selling product from being a low-margin one.

The main types of Amazon FBA fees

There is no single FBA charge. Sellers usually pay across several fee types over a product's life cycle.

• Fulfilment fees. Cover picking, packing, shipping, and handling each order. They scale with size and weight, so packaging efficiency directly affects what you pay.
• Referral fees. A commission Amazon takes on each sale, calculated on the total selling price and varying by product category. Price your products with the category rate already factored in.
• Storage fees. A monthly charge for the space your inventory occupies in Amazon's centres. These rise during peak shopping seasons, so overstocking before a slow quarter is expensive.
• Long-term storage fees. Extra charges on stock that sits unsold for extended periods. Slow movers tie up working capital and add cost, which is why regular inventory reviews matter.
• Optional service fees. Charges for removals, disposals, labelling, prep, or returns processing. Not every seller pays these, but knowing they exist prevents nasty surprises.

FBA vs FBM: which fits your business?

The two fulfilment models suit different sellers.

With FBA (Fulfilment by Amazon), Amazon handles storage, shipping, support, and returns, and your listings become Prime-eligible, which tends to lift buyer trust and conversion. You pay for that convenience through the fees above.

With FBM (Fulfilment by Merchant), you keep control of storage, packing, shipping, and service. That can cut certain fulfilment costs, but it demands time, staff, and logistics capability you have to supply yourself.

The right call depends on your category, order volume, and whether you already have logistics infrastructure. Sellers chasing scale and Prime eligibility usually lean FBA; sellers with their own warehousing sometimes do better on FBM. Many run a mix.

How Amazon FBA fees eat into profit

Every FBA fee comes straight off your margin. Strong sales with unplanned fees still produce weak profit. To protect margins:

• Calculate all fulfilment and storage costs before you list, not after.
• Watch inventory levels so you avoid storage and long-term storage charges.
• Revisit pricing as your costs change.
• Optimise packaging to bring fulfilment fees down.
• Improve inventory turnover so stock does not age into long-term fees.

Sellers who treat these as variable costs to manage, rather than fixed costs to accept, keep more of every sale.

Practical ways to reduce Amazon FBA costs

You cannot avoid Amazon's fees, but you can manage them.

• Optimise packaging. Smaller, lighter parcels often drop into a cheaper fulfilment tier.
• Plan inventory to demand. Stock to forecast so you neither run out nor pay to store dead inventory.
• Review pricing regularly. Fold fulfilment, referral, and operational costs into every price update.
• Use Amazon's fee calculator. Estimate fulfilment cost before launch so you know the real margin.
• Clear slow movers early. Remove underperformers before they accumulate long-term storage charges.

A proactive habit around inventory and pricing compounds over a year into a real margin difference.

The cost sellers forget: getting paid across borders

Here is the fee most FBA guides skip. When you sell to a US or UK buyer, the sale settles in a foreign currency. Before that money is usable in India, it passes through a payout and conversion process, and each step can carry a cost:

• Foreign-exchange markup. The gap between the real mid-market rate and the rate you are actually given. On steady export volume, a markup of even one or two percent quietly outweighs a chunk of what you saved by optimising packaging.
• Payout and processing fees. What the payout provider charges to move and convert your earnings.
• Failed or declined international payments. Every card that fails at checkout is a sale you fulfilled for but never got paid on. Cross-border card approval rates are often materially lower than domestic ones, which is a direct hit to revenue, not just cost.
• Compliance and documentation. Indian exporters need proof of inward remittance, such as a FIRA (Foreign Inward Remittance Advice), for their records and for GST or FEMA purposes. Chasing that paperwork manually is its own hidden cost in time.

For an Indian Amazon seller, this cross-border layer often costs more than the FBA fees everyone worries about. It is worth the same scrutiny.

How PayGlocal helps Indian Amazon sellers get paid

PayGlocal is an RBI-authorised cross-border payments provider that helps Indian businesses collect international payments at a high Payment Success Rate (PSR), the share of attempted payments that actually go through. PayGlocal is authorised by the Reserve Bank of India as a Payment Aggregator - Cross Border - Inward & Outward (PA-CB-I&O) and as an Online Payment Aggregator (PA-O), and is part of the ICICI Bank Group.

For a seller exporting through Amazon, that translates into a few concrete things:

• Higher approval on international cards, so fewer completed orders fail at the payment step. PayGlocal markets PSR of up to 96%, with real merchant improvements such as 75% to 95%.
• Multi-currency collection so you can accept USD, GBP, and other currencies from global buyers.
• Automated FIRA for clean inward-remittance documentation, instead of manual follow-ups.
• Transparent, success-based pricing: you pay only when you transact, with no setup, platform, or documentation fees.

The point is simple. Optimising FBA fees protects one side of your margin. Getting paid efficiently across borders protects the other, and for most Indian exporters it is the side with more money left on the table.