Amazon FBA consignment: how the split actually works

Most consignment pages say "50/50" and stop there. That is not enough information to decide anything, because the whole question is 50/50 of what.

This page walks through the mechanics: what gets deducted before the split, what a real payout looks like on a real item, what happens on returns, when you get paid, and where the arrangement can go wrong for you. If you are trying to figure out whether shipping someone a box of your inventory is a good idea, this is the page to read carefully.

The core structure

You own the items. We sell them. When one sells, the money coming in from Amazon has costs attached to it, those costs come off the top, and what remains gets split evenly.

That phrase, net proceeds, is doing all the work in that sentence. Here is what it means concretely.

What Amazon takes before anyone sees a dollar

When a media item sells on FBA, the sale price is not what lands in the account. Amazon deducts:

The referral fee. A percentage of the sale price, taken on every order.

The FBA fulfillment fee. A per-unit charge based on the item's size and weight. This is why DVDs and CDs behave differently from books in the economics. A hardcover costs more to fulfill than a disc, and a heavy textbook costs more than a paperback.

Closing fees. Media categories carry an additional per-item closing fee that most other categories do not.

Storage. Monthly, based on volume, plus long term surcharges on anything that sits too long.

None of that is optional and none of it is negotiable by either of us. It is the cost of the platform.

What we take before the split

Inbound shipping. Getting the units from our facility into Amazon's fulfillment centers.

Prep and labeling. Polybagging where required, labeling, and anything else needed to make the unit compliant.

Removals and disposals. If an item does not sell and needs to come out, or arrives unsellable.

Our labor and overhead. Receiving, sorting, scanning, listing, photographing where needed, warehousing, and customer service on every order.

That last one is not itemized against your account. It is what the 50 percent buys. But it is worth naming honestly, because it is the largest real cost in the whole arrangement and pretending otherwise would be dishonest.

What you do not pay: there is no signup fee, no monthly fee, and no charge for receiving your box. If your items never sell, you never pay us anything.

A worked example

Numbers here are illustrative to show the shape of the math. Actual fees vary by item.

A DVD sells for $24.99.

Amazon's referral fee, fulfillment fee, and media closing fee come off first. On a disc at that price point, that is commonly in the range of $7 to $9 all in, so call it $8.

That leaves roughly $16.99 landing in the account.

Our prep and inbound shipping on a single disc is small, on the order of a dollar or less at volume. Call it $1.

Net proceeds: about $15.99.

Your half: roughly $8.

So on a $24.99 sale, you receive somewhere around eight dollars for an item you could not have sold at all.

Now compare that against your alternatives on the same disc. A buyback company on a title like that will typically offer a small fraction of it. Walking away at the shelf gets you nothing while you have already eaten the sourcing cost. Disposal gets you nothing and costs you the removal fee.

Run the same math on a book that sells for $60 and the numbers are proportionally larger, because Amazon's fees do not scale up as fast as the sale price does. Higher-priced items produce disproportionately better splits. This is the single most useful thing to understand about what to send.

Why cheap items do not work

Take the same structure and apply it to a paperback that sells for $6.

Referral, fulfillment, and closing fees on a low-priced book can consume most of the sale price. After prep and inbound, net proceeds might be a dollar or two. Your half is under a dollar.

Meanwhile that unit took the same receiving, sorting, listing, and shelf space as the $60 book.

This is why the answer to "what should I send" is always "value, not volume." It is not a policy we impose to be difficult. It is arithmetic that hurts both of us identically. Sending a hundred common paperbacks generates almost nothing for you and costs us real money to process. Sending ten good items beats it in every direction.

If you already scan, apply the same judgment you use for your own buying. If you would not have listed it yourself at that price, do not send it.

Returns

Amazon buyers return things. Media has a lower return rate than most categories, but it is not zero.

The question every consignment arrangement has to answer is who absorbs that reversal. Some programs push it entirely onto the consignor, which means a payout you have already received can be clawed back weeks later.

Ours does not. If an item is returned, you still get paid. The payout you saw is the payout you keep, and we absorb the reversal on our side.

That is a deliberate choice rather than an oversight. A payout that can be taken back later is not really a payout, and explaining that to someone after the fact is not a business worth running.

Reporting and payouts

Reporting is available any time. Our current sheet infrastructure means you can see what has sold and what you have earned whenever you want to look, rather than waiting for a statement to arrive on someone else's schedule.

The figures come off actual settlement data rather than estimates, so what you are reading is what cleared, not a projection. Payment itself is arranged with you directly.

What to check before you consign with anyone

Including us. If a program cannot answer these, that tells you something.

Is the split on gross or net? These are very different numbers. Ask which, and ask what "net" includes.

What comes off before the split? Get the list. Vague answers here are the main way consignors get surprised.

What happens on a return? Ask specifically whether a payout can be reversed after you have received it.

When do you get paid, and what triggers it? On sale, on settlement, or on a schedule.

What do they do with items that do not sell? Returned to you at your cost, disposed, or held indefinitely.

Can you see the underlying data? Reporting built on real settlement reports is verifiable. Reporting built on someone's word is not.

The bottom line

Consignment is not a way to get more for your inventory than selling it yourself would. If you can sell it yourself, sell it yourself and keep everything.

It is a way to get something substantial for inventory you cannot sell at all, without doing any of the work. Against a buyback offer, against disposal, against a pile in the garage, the math is good. Against a healthy account you still control, it is not, and anyone telling you otherwise is selling you something.

If you are in the first situation, we would like to hear from you.