It’s news to no one that third-party sellers are responsible for most of Amazon’s growth. The fees the company charges marketplace merchants—including commissions, related fulfillment and shipping charges and other seller services—totalled over $21.38 billion during its most recent quarter, up 20% from the previous year.
Whether you currently sell on Amazon or you’re considering it, there are costs to develop into your selling strategy to determine the profitability of your marketplace business. Here is a breakdown of the company’s current selling fees.
5 Costs of Selling on Amazon TL;DR
#1. Monthly subscription fee: Professional sellers (selling more than 40 items a month) pay $39.99 a month. Individual sellers (selling less than 40 items a month) don’t have to pay a monthly subscription fee.
#2. Per-item fees: Professional sellers don’t have to pay a per-item fee, while individual sellers are charged $0.99 for each item sold.
#3. Shipping fees: For self-fulfilled orders, Amazon shipping rates apply to media products (books, music, video, DVD, software and video games) sold by professionals and to all products sold by individuals. These rates are based on the product category and the shipping service selected by the buyer. For Amazon-fulfilled orders, sellers are charged for fulfilment, storage and optional services, in addition to selling fees.
#4. Referral fees: Sellers pay a referral fee on each item sold. Items in several categories have a per-item minimum referral fee, so sellers pay the referral fee or the per-item minimum fee, whichever is more.
#5. Variable closing fees: Individuals and professionals pay a variable closing fee for each media item that’s sold.
Remember, Amazon takes a cut of every item sold. This ranges from as low as 6% (personal computers) to as high as 45% (Amazon device accessories), although referral fees for media products are 15% of the total sales price of a product, rather than the item price alone.
Meanwhile, the minimum referral fee across most categories (applied on a per-item basis unless otherwise stated) is $1 ($2 for watches or jewellery). There is no minimum referral fee for media products, as there are additional charges associated with those items.
|CATEGORIES||REFERRAL FEE PERCENTAGE||MINIMUM REFERRAL FEE|
|Amazon device accessories||45%||$0.30|
|Baby products (excl. apparel)||8% on items that are $10.00 or less and 15%||$0.30|
|Camera and photo||8%||$0.30|
|Cell phone devices||8%||$0.30|
|Electronics accessories||15% on the first $100 of the price and 8% thereafter||$0.30|
|Furniture and decor||15%||$0.30|
|Home and garden (incl. pet supplies)||15%||$0.30|
|Major appliances||15% on the first $300 of the price and 8% thereafter||$0.30|
|Software and computer/video games||15%||N/A|
|Sports (excl. collectables)||15%||$0.30|
|Tools and home improvement||15%, except 12% for base equipment power tools||$0.30|
|Toys and games||15%||$0.30|
|Unlocked cell phones||8%||$0.30|
|Video and DVD||15%||N/A|
|Video game consoles||8%||N/A|
|3-D printed products||12%||N/A|
|Automotive and powersports||12%, except 10% for tires and wheels products||$0.30|
|Clothing and accessories||17%||$0.30|
|Grocery and gourmet food||15%, or 8% for items priced $15 or less||N/A|
|Health and personal care (incl. personal care appliances||15%||$0.30|
|Industrial and scientific||12%||$0.30|
|Jewelry||20% on the first $250 of the price and 5% thereafter||$2.00|
|Luggage and travel accessories||15%||$0.30|
|Shoes, handbags and sunglasses||15%, or 18% on items priced above $75||$0.30|
|Watches||16% on the first $1,500 of the price and 3% thereafter||$0.30|
Sellers also pay a closing fee of $1.80 on all media sales.
Fee refund on returns
If you end up refunding a customer for an order for which you have already received payment, Amazon will refund you the amount of the referral fee you paid, minus the applicable refund administration fee ($5 or 20% of the applicable referral fee, whichever is less).
Order fulfillment charges
|Small (1 lb. or less)||$2.41|
|Large (1 lb. or less)||$3.19|
|Large (1 lb. to 2 lb.)||$4.71|
|Large (over 2 lb.)||$4.71 + $0.38/lb. above first 2 lb.|
|Small oversize||$8.13 +$0.38/lb. above first 2 lb.|
|Medium oversize||$9.44 +$0.38/lb. above first 2 lb.|
|Large oversize||$73.18 +$0.79/lb. above first 90 lb.|
|Special oversize||$137.32 +$0.91/lb. above first 90 lb.|
Add $0.40 per unit for clothing items
If you’re a professional seller fulfilling your own orders, Amazon will pay you a shipping credit on every sale to cover your costs, but it’s important to be aware of how much it actually costs to ship your product.
A business that chooses ‘standard shipping fee’ ostensibly allows Amazon to set the price. If they set it beneath cost (which can happen, especially with heavier items), this is going to come out of your profit margin.
Fulfilled by Merchant Fees (FBM)
Selling through Amazon’s Fulfillment by Merchant (FBM) means that while you list your product on Amazon’s platform, you are responsible for handling and shipping the product directly to the customer instead of leveraging Amazon’s fulfillment centers.
The costs involved in Amazon FBM primarily include the listing fees and referral fees.
Every product listed on Amazon is subject to a referral fee, which is a percentage of the product’s sale price, and this percentage varies depending on the product category. Additionally, if you choose the professional selling plan, the monthly subscription fee will apply compared to individual sellers who pay a fee per item sold.
Beyond Amazon’s fees, FBM sellers must also consider the costs of packaging materials, shipping, storage (if not using your own home storage), and any returns processing. For example, if you are selling a book priced at $20 on Amazon, and the referral fee for books is 15%, you’ll owe Amazon $3 for that sale. If you’re an individual seller, you’d pay an additional $0.99 per item sold. Then, if it costs $2 for packaging and $4 to ship, your direct costs (excluding any original acquisition or production costs) related to that sale amount to $9.99.
The bottom line
Effectively managing the costs associated with selling on Amazon is crucial not only for your profitability but also for maintaining your Service Level Agreements (SLAs), reducing returns and meeting customer expectations. By understanding and efficiently controlling these costs, you can ensure the smooth and efficient operation of your business.
An interesting fact is that half of all items sold on Amazon come from marketplace sellers, with more than 140,000 small and mid-size businesses surpassing over $100,000 in sales last year.
But selling on Amazon does come at a cost. Not to mention, 83% of the site’s sales go through the Buy Box. That’s why you need to understand all the fees involved and invest in the right tools to ensure you sell more and always at a profit.
Our automated Amazon repricer can help keep you competitive 24 hours a day. It combines powerful algorithms with personalized seller rules so you always sell at the best price, not the lowest. Enter your costs, measure the net margin on all your SKUs and set price boundaries to ensure you profit on all your sales.
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