It’s no secret that third-party sellers are the driving force behind Amazon’s growth. In the company’s most recent quarter, the fees charged to marketplace merchants, including commissions, fulfillment and shipping charges, and other seller services, totaled over $21.38 billion, marking a 20% increase from the previous year.

If you’re already selling on Amazon or considering it, it’s important to factor in the costs associated with developing your selling strategy in order to determine the profitability of your marketplace business. Here is a breakdown of Amazon’s current selling fees.

5 Key Expenses for Selling on Amazon TL;DR

1. Monthly subscription fee: Professional sellers (those who sell more than 40 items a month) pay a monthly subscription fee of $39.99. Individual sellers (selling fewer than 40 items a month) are exempt from this fee.

2. Per-item fees: Professional sellers don’t have to pay per-item fees, whereas individual sellers are charged $0.99 for each item sold.

3. Shipping fees: For self-fulfilled orders, Amazon applies shipping rates to media products (such as books, music, video, DVD, software, and video games) sold by professionals and all products sold by individuals. The rates are based on the product category and the shipping service selected by the buyer. For Amazon-fulfilled orders, sellers are charged for fulfillment, storage, optional services, and selling fees.

4. Referral fees: Sellers pay a referral fee on each item sold. Some categories have a minimum referral fee per item, so sellers are required to pay either the referral fee or the per-item minimum fee, whichever is higher.

5. Variable closing fees: Both individuals and professionals are subject to a variable closing fee for each media item sold.

Understanding Referral Fees

It’s important to note that Amazon takes a portion of the sales price for every item sold. This percentage varies depending on the product category, ranging from as low as 6% for personal computers to as high as 45% for Amazon device accessories. However, for media products, the referral fee is 15% of the total sales price rather than the item price alone.

Additionally, most categories have a minimum referral fee per item (unless stated otherwise), which is usually $1, except for watches or jewelry where it’s $2. Media products are an exception, as they have additional charges associated with them.

A Look at Fee Categories

Here’s a breakdown of the referral fee percentage and the minimum referral fee for various categories:

• Amazon device accessories: 45% referral fee, $0.30 minimum fee
• Baby products (excluding apparel): 8% referral fee for items $10.00 or less, 15% referral fee, $0.30 minimum fee
• Books: 15% referral fee, no minimum fee
• Camera and photo: 8% referral fee, $0.30 minimum fee
• Cell phone devices: 8% referral fee, $0.30 minimum fee
• Consumer electronics: 8% referral fee, $0.30 minimum fee
• DVD: 15% referral fee, no minimum fee
  (Full list continues below)

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Additional Considerations

In addition to the referral fees mentioned above, sellers are also required to pay a closing fee of $1.80 for all media sales.

Fee Refunds for Returns

If you need to refund a customer for an order on which you have already paid the referral fee, Amazon will reimburse you for the amount of the fee paid. However, there is an applicable refund administration fee of $5 or 20% of the referral fee (whichever is less).

Order Fulfillment Charges

For sellers who opt for Fulfillment by Amazon (FBA), there are additional fees to be paid on top of the ones mentioned earlier. These new FBA US fees took effect on Feb. 22 and vary based on size and weight.

Standard size

• 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 per pound above the first 2 lb.

Oversize

• Small oversize: $8.13 + $0.38 per pound above the first 2 lb.
• Medium oversize: $9.44 + $0.38 per pound above the first 2 lb.
• Large oversize: $73.18 + $0.79 per pound above the first 90 lb.
• Special oversize: $137.32 + $0.91 per pound above the first 90 lb.

Add $0.40 per unit for clothing items.

Shipping Credits

Professional sellers who fulfill their own orders receive shipping credits from Amazon to cover their costs. However, it’s crucial to be aware of the actual shipping cost of your product, as Amazon sets the price for businesses that choose ‘standard shipping fee.’ If the set price is lower than the actual cost (especially for heavier items), it will eat into your profit margin.

The Bottom Line

Effectively managing the costs associated with selling on Amazon is pivotal for your profitability, meeting customer expectations, reducing returns, and abiding by Service Level Agreements (SLAs). Understanding and efficiently controlling these costs will help ensure the smooth and efficient operation of your business.

Did you know that half of all items sold on Amazon are from marketplace sellers? Last year alone, more than 140,000 small and mid-size businesses generated over $100,000 in sales. However, selling on Amazon does come with its costs. Additionally, 83% of the site’s sales flow through the Buy Box. So, it’s crucial to comprehend all the fees involved and invest in the right tools to boost sales and maintain profitability.

Our automated Amazon repricer is a powerful tool that helps you stay competitive 24/7. With a combination of advanced algorithms and customized seller rules, you can ensure that you are selling at the optimal price for maximum profit. Analyze your costs, measure the net margin on all your SKUs, and set price boundaries to guarantee profitability on every sale.

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