Amazon charges seller fees for using its platform to sell products. These fees typically include a referral fee, which is a percentage of the total sale price. In addition, sellers may also be charged a variable closing fee based on the item category and final sale price.
It’s important for sellers to carefully calculate these fees to ensure they are pricing their products effectively. Seller fees can vary depending on the product category and selling plan chosen by the seller. Understanding these fees is crucial for sellers to maximize their profits on the Amazon platform.
As an e-commerce business owner, you may be considering selling your products on Amazon, one of the largest online marketplaces in the world. With its immense customer base and global reach, Amazon can provide great opportunities for sellers to expand their business and boost sales. However, it’s crucial to understand the various fees associated with selling on Amazon to accurately calculate your profit margins and make informed business decisions. In this article, we will dive into the details of Amazon seller fees, helping you determine how much it may cost you to become an Amazon seller.
1. Amazon Referral Fee
The Amazon referral fee is a commission charged on each item sold through the platform. This fee is calculated as a percentage of the total sale price (item price + shipping cost, excluding any taxes). The percentage varies by category, generally ranging from 6% to 45%. It’s important to note that referral fees are subject to a minimum fee per item sold, depending on the category.
Key Points:
- Amazon referral fees are based on the total sale price, including shipping costs.
- The percentage varies by category, typically ranging from 6% to 45%.
- There is a minimum fee per item sold.
2. Amazon Individual Seller vs. Professional Seller Account
When selling on Amazon, you have the option to choose between an individual seller account and a professional seller account. Let’s explore the difference between the two regarding fees:
a. Individual Seller Account
If you are planning to sell only a few items per month, an individual seller account might be suitable for you. With this type of account, you don’t pay a monthly subscription fee. However, keep in mind that for every item sold, you’ll still be charged a referral fee, which we discussed earlier.
b. Professional Seller Account
If you are a high-volume seller with more than a few items to sell each month, a professional seller account might be a better fit for your business. The professional account requires a monthly subscription fee of $39.99. However, unlike individual accounts, professional sellers receive some benefits, such as access to advanced selling tools. Additionally, professional sellers may be eligible for lower referral fees in certain categories.
Key Points:
- An individual seller account is suitable for low-volume sellers.
- A professional seller account requires a monthly subscription fee of $39.99.
- Professional sellers have access to additional selling tools and may be eligible for lower referral fees in some categories.
3. Fulfillment by Amazon (FBA) Fees
If you choose to utilize Amazon’s Fulfillment by Amazon (FBA) service, you’ll need to consider the FBA fees along with the referral fees mentioned earlier. FBA allows sellers to store their products in Amazon’s fulfillment centers, enabling them to take advantage of Amazon’s reliable shipping and customer service. Here are the two main components of FBA fees:
a. Fulfillment Fees
The fulfillment fees cover picking, packing, and shipping your products to the customers. They are calculated based on the product’s size, weight, and category. Amazon provides a detailed breakdown of the fulfillment fees in their FBA Fee Schedule. It’s crucial to factor in these fees when calculating your overall costs and profit margins.
b. Storage Fees
Amazon charges storage fees for keeping your products in their fulfillment centers. These fees vary depending on the time of year and the amount of space your products occupy. It’s essential to manage your inventory effectively and avoid excessive storage fees by regularly assessing and adjusting your stock levels.
Key Points:
- Fulfillment fees cover picking, packing, and shipping.
- Storage fees are charged for keeping your products in Amazon’s fulfillment centers.
- Both fulfillment and storage fees should be considered when calculating your overall costs.
4. Other Amazon Seller Fees
In addition to the referral fees and FBA fees, there are a few other miscellaneous fees that sellers should be aware of:
a. Variable Closing Fee
The variable closing fee is applicable to sellers in specific categories, such as media products. It is charged on each item sold and ranges from $0.45 to $1.35 per item, in addition to the referral fee.
b. High-Volume Listing Fee
Sellers with a professional seller account may be subject to a high-volume listing fee if they exceed their monthly limit for active listings. This fee applies to each item listed beyond the account’s limit and is $0.005 per eligible item.
5. How to Estimate Amazon Seller Fees
To estimate your overall Amazon seller fees accurately, you can take the following steps:
a. Research Amazon’s Fee Schedule
Amazon provides a detailed Fee Schedule, listing the referral fees, FBA fees, and other charges for different categories. Refer to this schedule to gain a clear understanding of the fees applicable to your products.
b. Calculate the Referral Fees
Using the percentage determined by the category in which your product falls, calculate the referral fees by multiplying it with your product’s total sale price (including shipping cost).
c. Determine FBA Fees
For FBA sellers, consider both the fulfillment fees and storage fees as per Amazon’s guidelines. Use their provided fee calculators or consult the schedule to estimate these costs accurately.
d. Account for Other Fees
Lastly, if applicable to your seller account and category, consider the variable closing fee and high-volume listing fee, as mentioned earlier, in your estimation.
e. Calculate your Profit Margin
By subtracting the total fees (referral fees, FBA fees, and other fees) from your product’s sale price, you can calculate your profit margin accurately.
Key Points:
- Research Amazon’s Fee Schedule to understand the fees applicable to your products.
- Calculate referral fees based on the total sale price.
- Consider and estimate FBA fees and other miscellaneous fees.
- Subtract the total fees from the product’s sale price to determine your profit margin.
Final Thoughts
Understanding the Amazon seller fees is crucial for anyone considering joining the Amazon marketplace. By comprehending the various charges involved, you can make informed decisions about product pricing, inventory management, and overall profitability. Remember to take into account the referral fees, FBA fees, and any additional charges specific to your seller account and category. By estimating your total fees accurately, you’ll be better equipped to run a successful business on Amazon.
Amazon seller fees vary depending on the type of account and the products being sold. It is important for sellers to carefully consider these fees and account for them in their pricing strategy to ensure profitability on the platform.