Customers make nearly half of online purchases on the Amazon platform.
The chance to have your business be part of Amazon is a tremendous privilege. However, that privilege comes at a cost.
Online customers usually trust products found on Amazon, and you do need to pay to have that trust transferred to you. There are several Amazon seller fees that a seller must pay to market their products on the Amazon channel.
The Cost To Sell On Amazon: 8 Amazon Seller Fees
The overall cost to sell on Amazon can be broken down into 8 different fees. Not all the fees may be applicable to the products that you sell, meaning that total Amazon seller fees can vary.
1. Amazon seller account fees
There are two different types of seller accounts. The benefits and charges of each are tailored to suit the business needs of Amazon sellers.
Amazon Individual Seller Accounts
Available for casual sellers that don’t sell in volume and will fit the needs of occasional sellers as well. Amazon individual seller fees are charged per item instead of them having to pay monthly fees. There is a charge of 0.99 cents, per item when sold.
- Individual seller accounts do not support data streams or bulk upload of products. You will need to create listings manually for each product.
- The inventory management tab and its features are not available.
- There is a limit of up to 40 sales per month with this option. If you need to sell more products, then you will need to upgrade to Amazon Pro.
- No gift wrapping option available
Amazon Pro Seller/Merchant accounts
The Amazon Pro seller account is geared for online sellers that are trying to make the most sales possible. Sellers with their online stores tap into the Amazon marketing channel to attract more customers.
People that sign up for Amazon pro are sellers looking to make high volume sales. Amazon business account fees include a charge of $39.99 per month for Amazon to provide you with all the tools for high volume selling.
Professional sellers do not pay the per item fee of $0.99.
- Gift wrapping option is available
- Gives you access to all the features and tools available on the Amazon seller central dashboard.
- Sell an unlimited number of products on Amazon.
- Bulk product uploads via data stream
- Connects to third-party e-commerce and order management platforms
2. Amazon Referral Fees
These Amazon seller fees are applicable regardless of account type or fulfilment option. These fees are universally charged to everyone selling on the Amazon platform. The charges may vary depending on your product’s selling price and category.
This fee is Amazon’s bottom line for every sale you make. The referral fee ranges from 6% to 20% with an average of around 15% depending on the price and category of your product.
Think of this as Amazon’s cut for you being able to make the sale on their platform.
Minimum referral fee
To prevent Amazon losing money from the sale of low-cost products. Amazon created the minimum referral fee which is usually $1 for most categories and $2 for the watch and jewellery categories.
This fee acts as a safety net for Amazon’s bottom line. On each sale the seller is charged the greater of the fees. The $1 minimum referral fee does not apply to collectable trading cards which are typically listed under toys.
3. Variable closing fee
This fee is charged on the sale of any media product you may be selling on Amazon. The variable closing fee is a flat fee of $1.80 charged after the referral fee for the purchase of any media item. Items that are considered media are any of the following:
- Video Game Consoles
- Video Games
4. High volume listing fee
This fee only applies to professional sellers that sell products in Amazon on a massive scale. Amazon charges a high-volume listing fee based on the number of active offers for non-media ASINs you list on Amazon.
Amazon would then track and identify non-media ASINs that have not had a sale in the past 12 months and charge $0.005 per ASIN.
You will not be charged for the first 100,00 ASINs that fit, but you will be charged the monthly high-volume listing fee of $0.005 per unit above the initial 100k. The fee will be calculated and billed monthly and shown in the next statement.
5. Refund Administration fee
When a customer returns an item to you, sellers will refund the customer the entire amount that they pay. Typically you would expect also to get back the referral fee you paid Amazon for that sale.
You do get the referral fee back but minus the refund administration fee which is the lesser of $5 or 20% of the applicable referral fee.
6. Rental book service fee
The rental book service fee only applies to sellers that offer book rental services. Amazon is in the business of renting textbooks to their customers, and it is quite lucrative.
The system works similarly to how you take out books from the library. However, with Amazon the customer has to pay, and there is a set due date that you need to return the books on as well.
If the customer needs an extension, then they can pay the extension fee which gives them a fifteen-day extension on the initial due date. For each textbook rental that gets sold, sellers must pay a rental book service fee of $5.
7. Shipping fees
Shipment fees are where your fulfilment option comes into play. If you are an FBM seller, then the shipping fees depend entirely on the prices of the shipping company that you are doing business with. There are several dependable options for this such as USPS, FedEx, DHL, or UPS.
It doesn’t matter what shipping company you use. What is important is that the orders of your customers are packaged correctly and shipped to them quickly at an affordable price for you.
Since Amazon is such a fantastic company, they actually help their individual account sellers by providing them with shipping credits to offset the cost of shipping for you.
Once a customer purchases your product and chooses a corresponding shipping method, Amazon then credits your account the appropriate shipping credit amount.
It is your duty as a seller to ship the product that your customer ordered even if the shipping credit will not cover the whole cost of shipping. To offset any out of pocket expense you will incur as a seller; you can adjust the price of the product to cover any additional shipping expenses.
When thinking about FBM vs FBA, if you don’t mind handling shipping yourself then the former isn’t a bad option. However, if you want to move a lot of product, FBA may be more beneficial.
8. FBA (Fulfilled by Amazon) fees
If you are a seller thinking of registering for the FBA program, you will not regret it one bit. Although this is up for debate of course and it depends if your business can support all the Amazon FBA fees that come with being an FBA seller.
When a seller registers for FBA you are essentially outsourcing the day to day operations of your business to Amazon. Sure you do still need to confirm orders to give the go-ahead for shipping, and send product inventory to Amazon fulfilment warehouses. But that’s it.
The fulfilment fees for Amazon processing, picking, packing and shipping your customers orders are arguably cheaper than what you would pay sending them yourself.
The monthly storage fees which are charged per cubic feet is probably cheaper as well than you paying for storage outside of Amazon. FBA give you access to Amazon prime customers which is another significant advantage of registering for the FBA program.
Amazon Seller Fees, Explained
The fees for utilising the Amazon to reach the most significant market base in the world are well worth the cost. You can register for an Amazon seller account that fits your needs and upgrade if needed.
So in summary, what percentage does Amazon take?
Generally, you will pay 15% of your product price to sell your products on Amazon.
Take into account all the possible fees and price your product right so that each sale will be profitable for you. If you have the resources and excellent products, then register for Amazon’s FBA program to help you dominate your target market.