Want to sell on Amazon but have no idea what Amazon seller fees you need to pay? Weighing out which selling plan or fulfillment method to use? Well, you’re in the right place. Here we will discuss the different types of accounts, fulfillment methods, and various fees involved in running an Amazon eCommerce store. By the end of this, you should have a better grasp of these and have an idea of where to start.
What Are the Different Amazon Seller Accounts?
The Individual selling plan is the basic plan typically used by new and upcoming sellers who are still figuring out what products they want to sell on the Amazon platform. This plan is free, allowing you to list your products on Amazon. However, they charge a fixed price for every single product you sell. Hence, this plan is recommended for those who plan to sell fewer than 40 items in a month. Also, if you are a seller who does not plan to advertise your store or use any of Amazon’s advanced selling tools, then this plan will suit you well.
With an Individual plan, sellers must pay a commission of $0.99 on each item sold. They must also pay additional Amazon seller fees including referral fees, variable closing fees, and other fees associated with their fulfillment option (FBA or FBM).
Individual plan sellers who choose to handle fulfillment on their own use Amazon’s set shipping rates for all products. When a customer purchases your product, you will receive a credit from Amazon equal to the shipping rate. Individual sellers must ship orders at the set rates even if the shipping credit is less than the total shipping costs. This makes pricing strategy incredibly important, so you aren’t losing money.
The Professional selling plan is a monthly subscription-based plan. This is the best option for serious sellers who plan to sell a significant amount of product and grow their online business through Amazon. Professional sellers know the types of products they want to sell, run advertising campaigns to draw more people to their stores, and make use of the suite of Amazon seller tools to improve their operations.
On top of Individual seller benefits, such as being able to list their product in the Amazon catalog and access Fulfilled by Amazon, other Professional plan benefits include:
- The potential to rank high for their Amazon product detail pages
- Access to advanced Amazon tools and reporting
- The ability to sell products in restricted categories such as liquor
- Bulk listing
- API integrations
- Inventory management tools
- Add multiple account users
- Run promotions
The Professional selling plan costs $39.99 every month regardless of the amount you sell. Just like the Individual plan, Amazon seller fees, including referral fees and refund administration fees, apply. If a seller on this plan uses FBA, then they also must pay fees associated with FBA services. (More on that later.)
Professional plan sellers handling fulfillment themselves set their shipping rates that Amazon matches with shipping credit. This is except for media categories (books, music, video, and DVDs), the rates of which apply to both selling plans.
How To Calculate Amazon Seller Fees?
The Amazon Revenue Calculator is available in Amazon Seller Central and allows you to compare and contrast costs associated with different fulfillment methods (specifically FBA). Here you can define your country, the specific product/ASIN, and the details of the product (category, product dimensions, weight, price, shipping, etc.), You can even create bulk estimates define storage season, and generate a rough report. You don’t have to be signed in to use this tool.
Note: All of these calculations are just estimates and results will likely vary from real-life scenarios.
The Amazon Services Business Solutions Agreement is a great resource to stay updated on Amazon costs and fees.
Other Amazon seller fees we discuss today have calculations, fees, or percentage amounts included in their explanations.
What Are the Different Amazon Seller Fees?
Fees All Amazon Sellers Must Pay
You may be charged a referral fee if you sell on Amazon. Amazon charges this fee for each item sold on its website. The seller pays Amazon the referral fee, which is calculated as a percentage of the total sale price of the item. This fee includes shipping costs and any additional surcharges like gift-wrapping. The referral fee varies according to the category of the item being sold and can range from 8% to 45%. For instance, the Business, Industrial, and Scientific Supplies category has a 12% referral fee attached, while sellers who sell products in the Computers category under fees are charged 8%. It’s worth noting that the fee category may not necessarily correspond with the listing category.
Additionally, some products may have minimum referral fees that must be paid, or a set closing fee added after you calculate the referral fee.
Individual Per-item Fees
For every single item sold, sellers pay a $0.99 sales transaction fee. This fee only applies to those on the Individual seller plan instead of a monthly subscription fee. This is then deducted from your Amazon account balance after every sale.
For the Professional seller plan, Amazon charges a subscription fee of $39.99 paid every month.
Refund Administration Fees
If you refund a customer for an order for which you have already received payment, the amount of the referral fee you paid for the item(s) will be refunded to you. This is minus the refund administration fee, which is the lesser of $5.00 or 20% of the referral fee. If you refund a customer $12.00 for an item in a category with an 8% referral fee, you will be charged a refund administration fee of $0.192 [$12.00 x 8% referral fee = $0.96 (20%) = $0.192].
Amazon FBA Fees
FBA or Fulfillment by Amazon is a fulfillment service that allows sellers to outsource their product storage, product packaging, shipping, and order fulfillment over to Amazon. FBA sellers can send their inventory to one of Amazon’s global fulfillment centers where they take care of the aforementioned processes. A fulfillment specialist can even take care of customer support and service needs, such as processing returns and exchanges. You can also track these deliveries through Seller Central. FBA sellers can also offer Amazon Prime Subscribers free two-day shipping.
Naturally, those who enroll for FBA must pay Amazon seller fees for these storage, shipping, and fulfillment services.
Amazon separates FBA fulfillment fees into three categories: apparel, non-apparel, and Small and Light. Picking and packing your orders, shipping and handling, customer service, and product returns are all included in the per-unit fee. Fees are calculated based on your product’s weight and dimensions.
FBA Storage Fees
Inventory storage fees are charged monthly. Amazon calculates these fees based on the daily average volume (measured in cubic feet) of the space your inventory takes up in Amazon fulfillment centers. When properly packaged and ready to ship, the volume measurement is based on unit size.
Amazon calculated these fees depending on the time of year. For instance, a standard-sized product stored within January – September will cost $0.87 per cubic foot. During the holiday season of October – December, this fee can go up to $2.40 per cubic foot. Storage for oversized products costs $0.56 and $1.40 per cubic foot, respectively.
Additional fees may apply if:
- Your products are classified as dangerous goods
- You have stored them for a long period of time (greater than 271 days)
- You have a high-level of inventory stored compared to the volume of the latest weekly sales
Amazon FBM Fees
If sellers prefer not to use Fulfillment by Amazon, they will need to handle those processes by themselves. Fulfilled by Merchant, also known as the Merchant Fulfilled Network, involves managing all your product storage, shipping, fulfillment, and all pre and post-purchase customer support. The seller has to arrange all of the logistics, handle customer communications, and shoulder all of the costs associated with those processes.
On top of this, other Amazon seller fees that FBM sellers may need to pay to include:
Amazon will assess a variable closing fee based on the total amount of the sale. This fee can range from around 0.99-2.5%. It can vary depending on the category of goods sold.
High-volume Listing Fee
Amazon charges a monthly fee of $0.005 per qualified listing for active, non-media listings that haven’t sold in the last 12 months to cover cataloging costs. Amazon waives this fee for the first 100,000 listings.
Rental Book Service Fees
If you rent textbooks out to consumers, expect to pay a $5.00 rental book service fee for each rental.
What’s The Difference Between Fees and Charges?
A fee is a monetary payment made in exchange for access to professional services.
(Ex. FBA Fulfillment fees, a monthly subscription fee)
A charge is a term that can refer to the price of a good, service, or a penalty.
(Ex: A gift-wrapping surcharge, overstocking surcharge)
What Affects Selling Costs?
The cost of selling on Amazon is dependent upon multiple factors, including but not limited to:
- Type of plan
- Type of fulfillment
- Shipping costs (FBM)
- Category of goods sold
- Weight and dimensions of goods sold
- Total amount of sales
On paper, Amazon seller fees look like they add up to a lot. However, keep in mind that Amazon is the largest online marketplace in the world. Amazon offers a lot of profit potential by being on its platform. You can figure out which selling plan is the best fit for you by trying it out for a while. Then you can determine if the profit potential counterbalances the amount they take in the form of fees.