Amazon Seller Fees – How Much Will It Cost to Sell on Amazon in 2022
COO of Margin Business
Table of Contents
Hundreds of thousands of business owners across the world have been able to expand their businesses into online commerce thanks to Amazon.
Not only does Amazon offer sellers an opportunity to broaden markets, but it also offers other business solutions.
But what are the costs of doing business on Amazon?
Amazon has four main seller fee categories. These are…
- Fees related to sales
- Shipping costs
- Amazon FBA fees
- Seller account fees
In this article, we will take you through each of the fee categories so you know what to expect.
1- Fees related to Amazon sales
We can categorise sales-related fees into the following types:
- Referral fees
- Minimum referral fees
- Closing fees
“The Amount that you pay will differ depending on your selling price and item category. These fees can range from 6% to 45% of the selling price but the fee average is 15%.
Referral Fees
What you pay for referral fees will depend on the product category and the price of the product you sell. Every item that sells on Amazon attracts a referral fee regardless of whether it is on an individual or professional sellers’ account.
“The average referral fee is around 15%. Though it may cost as little as 6% or as much as 45%. Use the Amazon Seller Fee Schedule to determine just what you’ll pay”
Minimum Referral Fees
Some product categories attract a minimum referral fee. If your product does, you will pay the higher of the two costs. Again, this is based on your selling price.
Closing Fees
Closing fees apply to any media item that you sell. This is an extra fee of $1.80 which is added to the referral fee. Media items include books, music, games, and videos.
2- Amazon Seller Account Fees
Amazon sellers fall into two categories – individual and professional. Amazon has made this distinction so that they can look after the needs of both low-volume and high-volume sellers and charge accordingly.
Individual sellers don’t pay a fee but they must pay $0.99 per item listed. Professional sellers don’t pay a listing fee. Instead, they pay a monthly subscription of $39.99.
Individual Seller Accounts
Amazon places restrictions on the Individual Seller Accounts. They are as follows…
- You may not sell more than 40 items on Amazon each month
- You must make manual listings on Amazon Seller Central
- You may not offer gift wrap
- Amazon restricts Individual Seller Accounts to particular categories.
Professional Seller Accounts
Amazon has designed the Professional Seller Account for high-volume sellers. So these accounts have many attractive features. These include:
- No limits on the number of products listed
- Bulk product uploads available
- Gift wrap available
- Offers inventory management and FBA inventory management
- Connects to order management systems and ecommerce platforms.
Which Account Should You Choose?
If you’re just starting out on Amazon and want to test the waters, an Individual Seller Account offers you the chance of trying out the platform without incurring much cost.
It doesn’t cost anything to register. Amazon will extract their referral fee from your sales and pay you the difference.
If, on the other hand, you already have an established eCommerce business that you want to move onto Amazon, you should opt for the Professional Seller Account.
3- Shipping Costs and Credits
It is essential that you understand the Amazon system of shipping costs and credits. If you have opted to do your own shipping, Amazon will credit you with the shipping costs. The credit that you receive is typically much lower than the cost to ship.
If you’re not keeping track of your costs versus credits, you could lose money fast. You must know how much Amazon will pay you in shipping credits before you sell your products.
Amazon publishes a list of the shipping costs and that is the amount that they will credit you. Compare the credits with your own shipping cost before you sell.
It sometimes pays to ship your own parcels, if they are small and lightweight. You may, however, lose out on large or heavy parcels, making a loss on every sale.
Many buyers turn to Fulfilment by Amazon to solve this problem of shipping costs.
4- Fulfilment by Amazon Fees
Fulfillment by Amazon FBA will stock, package and distribute Amazon products for both Individual and Professional sellers. Obviously, Amazon charges for this service.
Yet, there are many sellers who are quite happy with the fees and find that they are actually quite reasonable.
FBA also ensures that you don’t have to do the picking and packing so you can use the time for other business activities. In addition, your products become eligible for Prime when you use FBA.
The 91% of Amazon sellers who use FBA to fulfill at least some of their orders can’t all be wrong. Shipping fees differ according to weight and size and it is important that you examine the Amazon shipping fees before you opt for FBA.
FBA Fees by Service
Amazon charges a single fee for picking, packing, and distribution. This means that Amazon covers the cost of packaging. They even handle the returns on your behalf. The other fee that you will pay when using FBA is the charge for inventory storage.
Determination of FBA Fees
What you pay for FBA services will depend on the size of your product. Amazon divides products into two main size categories.
- Standard Size – the packed product must weigh less than 20 pounds. It must measure less than 18”x14”x8”
- Oversized – any packed product that exceeds the above weight and dimension.
You’ll pay these fees in addition to the Account and Referral Fees.
Inventory Storage Fees for FBA
You’ll pay FBA storage fees on top of all the other fees discussed above. Storage fees change over the course of the year. They are, for example, very high over the October to December holiday season.
Be aware, that other costs can turn up on your bill and eat into your profits. These include long-term storage and relabelling fees.
Last Words
Last year Amazon was responsible for more than 25% of all ecommerce sales in the US.
So, if you’re serious about growing your business, you have to give serious consideration to selling on Amazon.
Yet, the competition on Amazon is fierce and profit margins are often slim. So, it is essential that you understand the fees and keep an eye on any additional costs. Unless you do, Your profits will suffer.
>>> Need more info or help with your Amazon Business? I am sure we can help, book a free consultation call now, no engagement!
FAQs
Yes, you can deduct Amazon fees from your taxes.
The Professional selling plan costs $39.99 per month plus a per-item referral fee that varies by category. The Individual selling plan costs $0.99 per unit sold plus a per-item referral fee that varies by category.
For example:
- You set a per-shipment rate of $5.00 and per-item rate of $2.00.
- A buyer orders two products from you.
- Amazon calculates the total shipping charge to the buyer as follows: $5.00 + $2.00 x 2 items = $9.00.
EMILIE ANGRI
Connect @ LinkedIn
📢 COO At MarginBusiness – localization and optimization agency where we don’t Just Translate your Amazon Listing – WE LOCALIZE IT – Images, Content and Ads Optimization.
