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
If you opt for Fulfillment by Amazon (FBA), you will have to pay a series of fees, on top of the charges we already discussed. New FBA US fees, outlined below, came into effect on Feb. 22.
|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.
The bottom line
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.
Repricer.com is the ultimate Amazon repricing software available, enabling you to react instantly to changes in the marketplace and stay ahead of your competitors. Start a free trial and win the Buy Box today.