How Amazon Fees Affect The Cost Of Selling On Amazon

amazon selling costs

As an Amazon seller there’s a lot out there you’ll need to learn about. Sometimes things come to you over time but some things are more important to know upfront. Amazon listing fees are definitely something you should know about before you list your first product. If you aren’t sure how much your fees will be there’s a good chance you won’t price your product appropriately.

Understanding how Amazon fees work can be a little confusing. There are a lot of factors to consider and things like using FBA services can tack on extra fees you might not have considered. While there are tools out there like FBA fee and profit calculators to help you along the way, it’s good to know how Amazon fees work and what you can expect. 

If you haven’t spent a lot of time researching the fees associated with selling on Amazon this article will give you some useful insights. Amazon fees are going to affect a lot of your life as an Amazon seller so whether you need a refresher on how the fees work or you’re brand new, you’re in the right spot. Here’s how Amazon fees affect the cost of selling on Amazon.

1. Account Fees

Amazon offers two different plans for sellers and they’re both priced a little differently. Individual seller plans are geared towards sellers who don’t plan on selling more than 40 items per month. It’s a good option for sellers who are just starting out and only have one or two items to list. 

Amazon also offers a professional seller plan which has a different pricing structure as far as fees go. It’s more geared towards people who are planning to do a large number of sales and have a wider product line to offer. The plan you choose to go with is entirely up to you but knowing the fees associated with both is a good way to understand which option is best. 

  • Individual Seller Fees

With the individual seller plan, you don’t pay a monthly fee, but you do pay a .99 cents fee per item sold. This is in addition to fees that are associated with specific categories. Each category has its own fee structure so you’ll want to make sure you’re taking that into account when you’re making your decision on seller plans.

  • Professional Seller Fees

Professional sellers have a different pricing plan structure. You’ll pay a fee of $39.99 per month instead of paying per item sold. This is what makes this an ideal plan for high volume sellers. You’ll also still have to pay for fees associated with listing in specific categories. The reason you’d want to opt for this plan is to avoid having to pay a fee every time you sell an item. As you can see, once you hit the 40 item mark per month, the flat monthly fee is the cheaper option.

2. Referral Fees

Referral fees are something you’re going to have to pay in addition to your seller plan fees. They’re a separate part of the cost of selling on Amazon, although they can be easy to confuse at times. Even as a professional seller account you’ll still have per item fees associated with each purchase that is considered separate from your seller plan. 

Think of these fees as an entirely new category. Your seller plan fees are one facet of your cost to sell on Amazon but it’s not all encompassing. The referral fees are something you need to consider every time you list and sell a product, regardless of which seller plan you use.

  • Referral Fees By Category

Referral fees are going to vary based on which category you’re selling your items in. While some referral fees can be as low as 6% of the total sale, they can also range as high as 45% for the highest end of the spectrum. 

Most referral fees are going to settle in the 15% range which is something you’ll want to keep in mind. Amazon does have a very detailed chart of which categories are associated with which fee percentage, but the 15% cost is the most common percentage you’ll see there. 

  • Referral Fees for FBA Vs FBM Sellers

Referral fees are based on the total sales cost of your item. That means your referral fee is going to be different if you use FBA services than it would be if you are opting to ship items yourself (FBM). 

While you would pay a fee based on the product’s listed price if you’re using FBA, as an FBM seller your fee will be based on the price plus the shipping cost. It’s not always a huge difference but it’s still something you’ll want to be aware of when you’re listing items and making decisions about which type of seller or shipping options you’ll use.

3. Shipment Fees

The fees you’ll pay to ship your product do vary based on which type of shipping you’re going to use. While selling and shipping the item yourself is an option you might want to consider, your other option is FBA (fulfillment by Amazon) and that has some special considerations to think about. 

The fees related to your FBA listing might seem higher but you’ll want to make sure you’re getting the full picture. When you use FBA you’re going to have Amazon ship your items for you. There’s a fee based on many varients including the size of your product, or how long it’s been in the warehouse.

Using FBA services might be a good option if you want to offer your customers things like global shipping options, Amazon’s own customer service team, and Amazon Prime shipping options. You just need to be aware that there are additional fees for each item you list with the FBA service.

  • Fees Related To FBM Shipping

FBM shipping fees are going to be directly tied to your referral fees. As you saw earlier your FBM referral fees are going to be based on the sale price that includes your shipping charges. If you list an item for $5 and say you’re going to charge $2 for shipping, your referral fee is going to be based on the $7 sales total.

  • Fees Related To FBA Shipping

FBA fees are a little different. You won’t have to include your shipping costs in the referral fee but there are different fees associated with using the FBA option. FBA fees are sometimes a little intimidating and complicated to figure out, especially if you’re a newer seller.

Amazon is going to store and ship your product for you if you’re using FBA services. That means they’re going to charge you for the space your product is taking up, the amount of time it sits idle, and even a cancellation of FBA services fee. You’ll get benefits as you read about earlier, but the fees are something you should be aware of. 

  • FBA Calculators

FBA fee and profit calculators are a huge help for sellers that use FBA services. As you can see, the factors that figure into your FBA fees are pretty specific. If you aren’t extremely careful it’s easy to underestimate what you’re going to be paying in FBA fees.

FBA fee and profit calculators exist to do the hard work for you. Instead of figuring out each facet of the FBA fee yourself you can let the calculator guide you. It will ask all the relevant questions and give you accurate answers about your FBA fees. 

These calculators can also help you figure out the right pricing strategy. You’ll want to make sure you aren’t losing money on each item you sell so you can use the calculator to find that sweet spot between being competitive and not making any profit at all.

4. Other Miscellaneous Fees

There are still a few other fees you’ll want to keep in mind as an Amazon seller. The main fees have already been covered but these last few can sneak up on you if you aren’t aware of them. It’s better to know about them in advance than to find out they apply to you after the fact.

  • Refund Administration Fee

Each time an item is returned and or refunded Amazon will charge you a refund administration fee. The fee is based on the order amount up to a maximum of $5 per item you refund. 

Amazon decides based on individual items how much the fee will be. There are some really good examples of how this fee type works on their seller central resources pages.

  • Closing Fees

This is another fee that will apply to each item you sell in addition to your seller plan and referral fees. As an individual seller, you’ll pay variable closing fees ranging from .45 to $1.35 depending on the item sold. 

Professional sellers will pay a percentage of their total sale in a combined referral and closing fee scale. It can range from 6% to 25% depending on the category and sale total. Again, this is in addition to your  monthly sales plan fee of $39.99.

  • High-Volume Listing Fee

This fee is only applied in very specific situations but it’s still something to be aware of. If you have over 100,000 ASINs that are currently active and have an offer on them, were created over 12 months ago, and have not had a sale in the past 12 months, you will be asses a high-volume listing fee for every eligible ASIN that month.

Conclusion:

After reading about so many fees it’s easy to feel overwhelmed and start to wonder if selling on Amazon is really worth it. In truth, it definitely is still worth your time and effort to list an item on Amazon. The fees, while a little complicated at times are not going to be so outrageous that it would be worth giving up the traffic Amazon draws to its site.

Keep in mind that with Amazon you have a built-in flow of potential customers that you wouldn’t have if you built your own website. The costs for individual marketing of your product could far exceed any Amazon seller fees you might accumulate. Once you really understand how the fees work it won’t seem as overwhelming in the end. 

Remember that there are a lot of resources out there like the FBA calculators you read about that will help you figure things out too. If you have questions there’s likely a resource within Amazon itself or online that will help you get to the bottom of things. 

Understanding fees might take a little extra time, but being an informed Amazon seller will lead to better profits in the end. Better profits are always worth any extra time you might spend at first to bring them in. Good luck and happy selling!

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