TL;DR: Most Amazon brands expense FBA inbound fees as operating costs. That pushes EBITDA down and keeps inventory understated—bad news for lending and exits. If you capitalize eligible inbound fees into landed cost instead, your unit economics are truer, your EBITDA is higher, and buyers are willing to pay more for the same business.
For a typical Amazon brand, inbound FBA fees include things like:
Partnered-carrier shipping from 3PL or prep center to FBA
Inbound placement or “distributed inventory” fees
AWD receiving, transfer, and intake charges
Cross-dock or prep-center handling that exists purely to get units into FBA/AWD
These are directly tied to making inventory available for sale.
Yet in most books they land here:
“Shipping and fulfillment expense”
or
“Warehouse and logistics expense”
That means they hit the P&L immediately instead of being capitalized into inventory and expensed gradually through COGS as you sell the units.
Let’s simplify and compare two policies for the same 100,000 of inbound FBA fees.
100,000 goes straight into expenses
EBITDA is 100,000 lower
Inventory stays at product cost only
Your “true cost per unit” is invisible in the system
100,000 is added to inventory as part of landed cost
It flows into COGS over time, as units sell
EBITDA this year is higher by up to 100,000
Inventory is valued closer to what you actually paid
Same cash out the door. Same trucks, same pallets, same boxes.
Completely different story in your financials.
Buyers and lenders rarely build models from raw transactions. They look at shorthand metrics like:
Enterprise Value ≈ EBITDA × Multiple
(plus/minus working capital and inventory adjustments)
If inbound FBA fees are expensed instead of capitalized:
EBITDA looks lower than it should be
Inventory looks lighter than it truly is
Total enterprise value is suppressed on both axes
In contrast, a clean capitalization policy gives you:
Higher, cleaner EBITDA
Because direct inbound costs are sitting in inventory and leaving the P&L only when you sell units.
Higher (and more defensible) inventory value
Your balance sheet reflects the full cost to land the goods, not just factory invoices.
Fewer valuation haircuts
During quality of earnings, buyers do not “discover” that you were over-expensing direct inventory costs. The uplift is already baked into your numbers, and supported by a clear policy.
For a business trading at, say, a 4× multiple, every extra 100,000 of properly reported EBITDA can translate into roughly 400,000 of additional sale price—before even counting the inventory step-up.
This is not about inventing profit. It is about applying basic inventory accounting correctly.
The guiding principle is simple:
If a cost is necessary to bring inventory to its present location and condition for sale, it can usually be capitalized.
Inbound FBA and AWD fees that move stock from your supplier or 3PL into sellable Amazon inventory meet that test far more often than not.
What should stay as expenses?
General warehouse overhead not tied to specific inventory
Customer service, marketing, and admin
Last-mile delivery to end customers (if treated as selling cost in your policy)
You should always align details with your CPA, but conceptually this is standard practice in well-run retail and CPG businesses.
If you decide to capitalize inbound FBA fees, you need three ingredients.
Define, in plain language:
Which fee types you will capitalize (e.g., FBA inbound placement, AWD receiving, Amazon-partnered freight, prep center intake specific to FBA shipments)
Which you will continue to expense
How you will allocate inbound fees to units (by units, weight, volume, or value)
This turns a one-off decision into a repeatable rule set.
You need to separate inbound-related codes from:
Referral and selling fees
Storage and long-term storage
Return processing
Customer-facing shipping charges
Once mapped, inbound codes should flow into a “Landed Cost – Inbound Fees” bucket instead of straight into expenses.
Without automation, capitalizing inbound fees quickly becomes a spreadsheet grind:
Export FBA reports
Tag inbound fees
Allocate across POs or shipments
Manually adjust inventory and COGS in the ledger
It is doable, but error-prone—and often abandoned when things get busy.
NeonPanel is designed so capitalizing inbound fees is not a special project; it is baked into how landed cost works.
With NeonPanel you can:
Ingest FBA/AWD and 3PL data and identify inbound-related fees automatically.
Apply your capitalization policy as rules, so eligible inbound fees are allocated into landed cost per batch and SKU instead of being expensed.
Recalculate COGS using true landed cost, ensuring past mistakes or policy changes can be corrected without rebuilding everything in Excel.
Sync clean journals to QuickBooks or Xero, keeping your P&L, balance sheet, and inventory valuation in line with your economics.
The result is not just nicer reports. It is:
Higher, defendable EBITDA
A stronger balance sheet
Less friction in lending discussions and buyer due diligence
All driven by a correct treatment of costs you are already paying.
If you are pushing volume through FBA and AWD, inbound fees are not a rounding error—they are a real, recurring cost of acquiring inventory.
Treat them like what they are:
Part of the cost to bring products into sellable condition
A component of landed cost
A lever you can pull to protect EBITDA and enterprise value
Capitalizing FBA inbound fees is one of those rare changes that improves both the accuracy of your numbers and the story those numbers tell.