Amazon's remote fulfillment program sounds like an easy win. You have inventory in the US. Canadian customers want to buy. Amazon offers to fulfill those orders from your existing US stock, no separate Canadian FBA prep required. You flip a switch and you're selling in Canada.
The program works as advertised. The economics, for a significant portion of products, do not.
What the program actually does
Remote fulfillment for Canada (RFC) lets you sell on Amazon.ca using inventory you've already sent to US FBA warehouses. Amazon fulfills the order from a US FC and ships it across the border. You don't need to import to Canada, hold Canadian FBA inventory, or deal with Canadian customs prep.
The catch is the fee structure. Amazon charges a remote fulfillment surcharge on top of the standard US FBA fee. As of 2025, that surcharge for small standard items is roughly $2.20 per unit. For large standard items it runs higher, approaching $4.00 to $6.00 depending on dimensions and weight. These are in addition to the regular FBA referral fee.
The price ceiling problem
Here is where it falls apart for low-price products.
Take a product you sell on Amazon.com for $19.99. Your US FBA fee is around $3.50 for a small standard item. Your cost of goods is $5.00. After referral fee (15% for most categories, so $3.00), you're at roughly $8.49 in variable costs, leaving around $11.50 in gross contribution before PPC and overhead.
Now put that same product through remote fulfillment Canada. Amazon lists it in CAD. At parity-ish exchange rates, the listed price might be around $26 CAD, which converts back to roughly $19.50 USD at current rates. The referral fee on that is about $2.93 USD. Your US FBA fee is still $3.50. Now add the RFC surcharge: call it $2.20. Your variable costs are now $13.63 for the exact same product.
You went from $11.50 in gross contribution to $5.87. You've cut your margin in half before PPC, before overhead, before any customer service.
On a $19 product, that math might still technically work, depending on your COGS. On a $15 product, you are almost certainly operating at a loss per unit through RFC.
Where the threshold actually sits
The viability calculation depends on three variables: your COGS, your product's FBA fee tier, and the RFC surcharge for your size tier.
For small standard items, the break-even analysis consistently shows that products need a US selling price above roughly $25 to $28 to survive the RFC surcharge while maintaining a workable contribution margin. For large standard items the threshold moves up to $35 or above.
To run this for your own catalog:
Take your US selling price, convert it to your expected CAD listing price (usually at a slight premium to account for exchange risk), convert that back to USD.
Subtract: referral fee percentage of the CAD-converted USD price, US FBA fulfillment fee, RFC surcharge for your size tier, and your COGS.
What's left is your gross contribution through RFC.
Compare that number to your US gross contribution. If the RFC number is negative or close to zero, the program is costing you money or breaking even at best. You are shipping orders, handling customer service, processing returns, and making nothing.
What to do instead
For products below the threshold, the options are:
Hold the Canadian market until you have volume that justifies building a Canadian FBA inventory position directly. This means importing to Canada, dealing with the additional prep and customs overhead, but at standard FBA rates without the RFC surcharge.
Price higher in Canada to absorb the surcharge. This can work for categories where Canadian pricing tolerance is higher, but it carries conversion rate risk. A product that converts well at $19.99 USD may stall at the CAD equivalent of $27 or $28.
Don't enroll that ASIN in RFC at all. You can selectively enroll ASINs in remote fulfillment. There is no requirement to put your entire catalog in the program. Run the profitability math by ASIN before you enroll.
The mistake most brands make is bulk-enrolling everything in RFC because the enrollment process is frictionless. It takes about 10 minutes. The profitability damage from enrolling loss-leader products runs indefinitely until someone runs the math and notices.
The check before you flip the switch
For every ASIN you're considering for RFC, calculate the contribution margin at current US selling price with the RFC surcharge added. Set a floor. If contribution margin drops below 20 percent, don't enroll that ASIN.
Remote fulfillment Canada is a useful tool for the right products. It's a margin drain for the wrong ones. The difference between the two is one spreadsheet column.
