What percentage does Amazon take from sellers? What is this?

What percentage does Amazon take from sellers? If you sell your wares on Amazon, you’ll pay several different types of fees. Sale-related fees range from 8% to 45% of each product’s selling price, with the average seller paying about 15%. Account fees range from 99 cents per item sold to $39.99 per month. You’ll also encounter fees related to fulfilling and shipping your orders, which vary widely depending on your products and fulfillment method. In addition to these, you may incur other miscellaneous fees for things like dangerous goods or refurbished items.

We’ll walk you through all of the selling on Amazon fees and show you how to estimate what you’ll pay for each product you sell.

What percentage does Amazon take from sellers?

The cost of selling on Amazon has continued to increase, according to a new study from Marketplace Pulse.

“Amazon is pocketing more than 50% of sellers’ revenue – up from 40% five years ago,” the e-commerce analytics firm wrote in a blog post on Monday.

The post said the study used profit and loss reports from a sample of sellers to calculate the cost of hawking merchandise on Amazon. Almost 2 million businesses sell using Amazon, Amazon said in March 2022.

Besides the base transaction fee (called a “referral fee” by Amazon), the study discussed two other crucial elements of selling on Amazon: advertising and using Amazon’s fulfillment network, called Fulfillment By Amazon (FBA). Advertising can be important to get products listed higher up in search queries, and using FBA is one of the only ways to have your products available on Amazon Prime, which presents a sales advantage.

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Because these services are necessary to acquire sales (and have risen in price), so has selling on Amazon, the study said. “Sellers are paying more because Amazon has increased fulfillment fees and made spending on advertising unavoidable,” the post wrote.

The study broke down fees as follows: Amazon takes its 8% to 15% transaction fee, FBA can cost from 20% to 35%, and advertising, it calculated, can cost up to 15%. The study said the average was 50% for 2022.

The owner of Louisville-based Pinch Spice Market, which sells organic spices and blends on Amazon, told Entrepreneur that Pinch doesn’t advertise often — it’s “cost prohibitive” — but, without advertising, the small business coughs up about 40% to the e-commerce giant when using FBA.

“[The cost] is always going up,” said Pinch’s founder and owner, Thomas McGee.

The study also said because sales have slowed down on the platform, new customers can’t cover the losses from increased costs of participating in the marketplace.

Amazon take from sellers

Can I sell on Amazon for free?

There is no way to sell on Amazon for free, but you can set up your account so that you are only charged after an item sells.

This can be a great set up for beginning Amazon sellers who don’t want to test the waters before making a commitment to the platform.

The type of account you’ll need for this is called an “Individual Seller Account”.

You can read more about Individual Seller accounts and how to set them up here.

With that in mind, let’s talk about the first type of Amazon fees: account fees.

Fees Charged For Seller Fulfilled Items

The main additional cost that you will incur if you are seller fulfilling an item is the shipping cost to the customer.

While this isn’t technically a fee charged by Amazon, it’s very important to factor into the equation when evaluating items to sell.

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You will be able to purchase shipping directly through Amazon for items sold and have it billed to your Amazon seller account. The cost of shipping directly to the customer will vary dramatically based on the size, dimension, and how far away your customer is.

Expect to pay between $4 and $15 to ship to customers for the vast majority of items.

Are the Amazon Seller Fees Worth It?

While it may seem like there are a lot of fees for selling on Amazon, they are more than worth paying in our experience. The vast majority – if not all – of the fees directly help increase our profits and revenues.

The key number that we pay attention to in my business is how much we get paid for an item when we sell it, compared to how much the item costs us. If we can make our desired profit and return on investment, then we have no issue with the Amazon fees.

The number of customers on Amazon is unmatched, so paying a fee to get access to them is a good idea in my opinion as long as you run the numbers in advance.

Amazon take from sellers

Why are Amazon FBA Seller Fees so high?

When you use FBA, Amazon does a lot of the heavy lifting and covers the most time-intensive parts of fulfillment. They also handle all the inventory storage. All of this costs money.

In our experience, FBA is almost always worth the investment. One of the main parts of the FBA fees is the fulfillment fee, and we often save money here compared to what it would cost to ship the item ourselves.

We always run the numbers in advance and make sure we’ll make our profits on the items we sell. As long as we can make our desired margin, we don’t worry too much about the fees.

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How to Limit Your Amazon Selling Fees

Certain fees on Amazon are fixed, but there are still a few things you can do to make sure you aren’t paying any unnecessary fees to sell on Amazon.

Here are some things to watch out for:

  • If you are selling over 40 items per month, make sure you are signed up as a professional seller.
  • Keep your inventory moving quickly.
  • Optimize your shipments to FBA warehouses.

Having a Professional Seller Account

Having a professional seller account costs $39.99 per month but will save you a $0.99 fee on every item you sell. With an Individual account, selling 41 items equals an additional $40.59 in per-item fees and it just goes up from there with every additional item.

In other words, a Professional Seller account will save you money as long as you sell more than 40 items per month.

Keep Your Inventory Moving Quickly

The longer your inventory sits at Amazon warehouses, the more you will pay in storage costs.

Remember, there are two types of storage fees: monthly and long term. Monthly fees are a normal cost of doing business, but you still want to strike a balance between minimizing shipping costs, minimizing storage fees, and making sure you don’t run out of FBA inventory.

Long term storage fees used to be charged when you had inventory in an Amazon warehouse for over 6 months, but in 2019 they changed this so that only inventory that has been in their warehouses for over a year incurs these fees. Long term storage fees should be easy to avoid if you are smart about product selection and management.

Optimize Your Shipments to FBA Warehouses

In general, the more items you send per box, the better the shipping rates you will receive.

Once you are shipping in many boxes at a time on a regular basis, I’d recommend looking into shipping via pallet to Amazon’s warehouses. This is known as LTL (less than truckload) shipments and can save you money on inbound shipping.

Amazon take from sellers

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