Wondering how much does Amazon charge to sell? The short answer: it depends on your choices. With Amazon, you can pick either an Individual or a Professional account.
If you go Individual, it's free to sign up, but you pay $0.99 for every item sold. Choose Professional for $39.99 a month and skip the per-item fee, but pay a percentage of each sale instead.
Want to learn more and see if selling on Amazon could be profitable for you? Keep reading to figure out which fees might apply to your business.
Amazon's Fee Structure
As an Amazon seller, it is essential to understand the fee structure to ensure that you are making a profit. Amazon charges various fees to sellers, including selling fees, referral fees, and closing fees.
Comprehensive Breakdown of Seller Fees
Amazon charges two types of selling fees: individual selling plan fees and professional selling plan fees.
The individual selling plan costs $0.99 per item sold, while the professional selling plan costs $39.99 per month.
The professional selling plan is required to sell over 40 items per month and offers benefits like bulk uploading listings and access to advanced reporting.
In addition to the selling plan fees, Amazon also charges referral fees.
Referral fees are a percentage of the item's sale price and vary depending on the product category.
Referral fees range from 6% to 45% of the item's sale price, with the average seller paying around 15%.
Subscription Costs and Differences
If you are just starting on Amazon, the individual selling plan may be the best option for you. It has no monthly fee, and you only pay when you sell an item.
However, if you plan to sell more than 40 items per month, the professional selling plan may be a better option. It offers several benefits that can help you manage your business more efficiently.
Variable Closing Fees Explained
Amazon also charges variable closing fees for media products like books, DVDs, and video games.
The closing fee is $1.80 per item, plus a referral fee of 15% of the item's sale price. For all other products, Amazon does not charge a closing fee.
If you use Amazon's Fulfillment by Amazon (FBA) service, you will also incur FBA fees. FBA fees include storage fees, fulfillment fees, and optional services fees.
Costs Involved in Selling Products
As a seller on Amazon, there are several costs involved in selling products. These costs can vary depending on whether you are a new seller or an established one.
Initial Expenses for New Sellers
If you are a new seller on Amazon, there are some initial expenses that you will need to incur. These expenses include:
- Product costs: This is the cost of the product that you will be selling on Amazon. You will need to purchase the product from a supplier or manufacturer before you can sell it on Amazon.
- Amazon fees: Amazon charges various fees to sellers, including referral fees, fulfillment fees, and closing fees. These fees can vary depending on the product category and the selling price of the product.
- Other necessary initial investments: This includes expenses such as product photography, packaging, and shipping supplies.
Operational Costs for Established Sellers
Once you have established your business on Amazon, there are ongoing operational costs that you will need to consider. These costs include:
- Inventory-related fees: Amazon charges fees for storing your inventory in their warehouses. These fees can vary depending on the size and weight of your products, as well as the time of year. There are also additional fees for long-term storage and FBA storage.
- Product category: The product category that you are selling in can also affect the fees that you will be charged. Some categories have higher fees than others.
- Costs: You will need to consider the cost of goods sold (COGS), which is the cost of the product plus any additional expenses such as shipping and handling.
- Price: The selling price of your product will also affect the fees that you will be charged. Amazon charges higher fees for products with a higher selling price.
Inventory-Related Fees
One of the most significant costs involved in selling products on Amazon is inventory-related fees. These fees include:
- Storage fees: Amazon charges fees for storing your inventory in their warehouses. These fees can vary depending on the size and weight of your products, as well as the time of year.
- Long-term storage fees: If your inventory has been in Amazon's warehouse for more than 365 days, you will be charged a long-term storage fee.
- FBA storage fees: If you use Fulfillment by Amazon (FBA) to fulfill your orders, you will be charged additional fees for storing your inventory in Amazon's warehouses.
Fulfillment Options and Associated Fees
When selling on Amazon, you have two main fulfillment options: Fulfillment by Amazon (FBA) and Fulfilled by Merchant (FBM). Each option has its own set of costs and benefits, so it's important to understand the differences before making a decision.
Fulfillment by Amazon (FBA) Overview
Fulfillment by Amazon (FBA) is a fulfillment method where Amazon stores, picks, packs, and ships your products to customers. This option is popular among sellers who want to take advantage of Amazon's vast logistics network and customer base.
When using FBA, you'll be charged a fulfillment fee, which covers the cost of storage, picking, packing, and shipping.
The fulfillment fee varies depending on the size and weight of your product, as well as the time of year. You can use Amazon's FBA Revenue Calculator to estimate your fulfillment fees.
In addition to the fulfillment fee, you'll also be charged a storage fee if your products remain in Amazon's fulfillment centers for more than 365 days. The storage fee is based on the volume of space your products occupy and the time of year.
Fulfilled by Merchant (FBM) Costs
Fulfilled by Merchant (FBM) is a fulfillment method where you, as the seller, are responsible for storing, picking, packing, and shipping your products to customers. This option is popular among sellers who want more control over their fulfillment process and don't want to pay Amazon's fulfillment fees.
When using FBM, you'll be responsible for all fulfillment costs, including storage, picking, packing, and shipping.
The cost of these services will vary depending on the size and weight of your product, as well as the shipping destination.
Comparing FBA and FBM
When deciding between FBA and FBM, there are several factors to consider.
FBA is generally more expensive than FBM, but it offers the benefit of Amazon's vast logistics network and customer base. FBM, on the other hand, gives you more control over your fulfillment process and can be more cost-effective for certain products.
To determine which option is best for you, consider the size and weight of your products, your shipping volume, and your budget. You can also use Amazon's FBA Revenue Calculator to compare the costs of FBA and FBM for your specific products.
Also read: Amazon FBA vs. FBM: The Profit Calculation Dilemma
Additional Fees and Revenue Considerations
When selling on Amazon, it's important to understand the various fees and revenue considerations that can affect your bottom line. In this section, we'll explore some of the additional fees and revenue considerations you should keep in mind when selling on Amazon.
Referral and Service Fees Across Categories
Amazon charges referral fees and service fees for each item sold on their platform. The referral fee is a percentage of the item's sale price, while the service fee varies by category and covers the cost of shipping and handling.
You can use the Amazon Revenue Calculator to estimate your fees and revenue for each item you sell.
Handling Returns and Refunds
Amazon has a robust returns and refunds policy, which can impact your revenue and fees.
If a customer returns an item, you may be charged a refund administration fee, which varies by category.
To minimize returns, make sure your product listings are accurate and detailed, and consider offering promotions or discounts to encourage customer loyalty.
Maximizing Revenue with Amazon's Tools
To maximize your revenue on Amazon, it's important to take advantage of the platform's many tools and resources.
The Amazon Seller App, for example, allows you to manage your inventory, track your sales, and communicate with customers on the go.
Amazon Brand Registry can help you protect your brand and improve your visibility on the platform, while Amazon Ads and Promotions can help you reach new customers and boost your sales.
Related read: What Are The New Amazon Brand Analytics Features？
Strategies for Minimizing Amazon Seller Costs
As an Amazon seller, you want to maximize your profits while minimizing your costs.
Here are some effective strategies for minimizing your Amazon seller costs.
Effective Inventory Management
Effective inventory management is essential for minimizing your Amazon seller costs.
By managing your inventory effectively, you can avoid overstocking or understocking, which can result in additional storage fees, lost sales, and unhappy customers.
To manage your inventory effectively, you can use tools like Jungle Scout.
Jungle Scout can help you track your inventory levels, sales velocity, and other important metrics.
You can also use Amazon's inventory management tools, such as the Inventory Dashboard and the Manage Excess Inventory tool, to optimize your inventory levels and reduce your storage fees.
Leveraging Amazon Seller Programs and Services
Amazon offers a variety of programs and services that can help you reduce your seller costs and increase your profits.
For example, you can take advantage of Amazon's FBA program, which can help you save on shipping costs, storage fees, and customer service.
You can also leverage Amazon's other seller programs and services, such as the Subscribe & Save program, the Amazon Renewed program, and the Amazon Device Accessories program, to increase your sales and reduce your costs.
Optimizing Product Listings and Pricing
Optimizing your product listings and pricing is another effective way to minimize your Amazon seller costs.
By optimizing your product listings and pricing, you can increase your sales velocity, reduce your advertising costs, and improve your profit margins.
To optimize your product listings and pricing, you can use tools like Jungle Scout.
Jungle Scout can help you identify high-demand products, analyze your competitors' pricing strategies, and optimize your product listings for maximum visibility and sales.
You can also use Amazon's pricing tools, such as the Automated Pricing tool and the Manage Your Experiments tool, to test and optimize your pricing strategies for maximum profitability.
Also read: How to Optimize Amazon Keyword Listings for Explosive Sales
Frequently Asked Questions
What are the different fees charged by Amazon for selling products?
Amazon charges different fees for selling products on its platform. The fees vary depending on the product category, the selling plan, and the fulfillment method.
Some of the common fees charged by Amazon include referral fees, closing fees, fulfillment fees, and subscription fees.
Can you explain the Amazon referral fee for sellers?
The referral fee is a percentage of the item price that Amazon charges sellers for each sale made on its platform. The referral fee varies depending on the product category.
Referral fees range from 6% to 45% of the item price, with the average seller paying about 15%.
Is there a monthly subscription cost for selling on Amazon?
Yes, Amazon charges a monthly subscription fee for sellers who want to use its professional selling plan.
The professional selling plan costs $39.99 per month and includes additional features such as access to Amazon's advertising tools and bulk listing and reporting tools.
What are the costs for beginners to start selling on Amazon?
For beginners, Amazon offers an individual selling plan that does not require a monthly subscription fee.
Instead, individual sellers pay a per-item fee of $0.99 for each item sold, in addition to other selling fees such as referral fees and closing fees.
How can I calculate my total fees for selling on Amazon?
To calculate your total fees for selling on Amazon, you can use Amazon's fee calculator tool.
The tool allows you to estimate the fees you will pay based on the product category, the selling price, and the fulfillment method. You can also view the estimated revenue and net profit for each item sold.
Does Amazon offer any free selling options for individual sellers?
Yes, Amazon offers an individual selling plan that does not require a monthly subscription fee. However, individual sellers are still responsible for paying other selling fees such as referral fees and closing fees.
User Comments