Utilizing the Amazon marketplace comes with some pretty notable costs. But having access to Amazon's powerful platform can make up for these costs if you know what you are doing. But what about selling on Amazon fees? What is the most cost-effective method for sellers? In this article, we plan on digging into the reality being selling on Amazon costs.
1. Amazon Seller Fees
From the list above, you can get a good general idea of the selling on Amazon fees. However, those fees can significantly change depending on your chosen plan, referral fees, and fulfillment choice.
in this case, you have four major areas to be concerned over:
- Chosen selling plan
- Referral fees
- Fulfillment fees
- Other costs
As you might imagine, Amazon FBA (Fulfillment by Amazon) seller fees are way different when compared to FBM (Fulfillment by Merchant). Under FBM, you handle storage and shipment, meaning that those are direct costs expensed specifically on your accounting sheets.
For now, let's focus on where you see the highest Amazon-based costs. FBA.
2. Amazon FBA Fees
The main difference between fees when comparing FBM and FBA is fulfillment. If Amazon handles your product catalog, you can expect costs for everything from shipping costs to storage.
When it comes to Amazon FBA seller fees, there is a common misconception that you need to pay for a professional account. According to the Amazon seller page, you can still take advantage of FBA without having a professional account.
While store owners will likely gush over the convenience of professional accounts, there is still some merit to starting as an individual seller. Here are some reasons to start as an individual:
- It allows you to feel out the market if you don't know what to sell
- Individual sellers benefit most when selling 39 or fewer units per month.
- Individual sellers aren't payment for tools they might not need (advertisement and advanced selling tools)
Amazon individual seller fees also without a subscription cost a .99 cent per item fee. That's why when you sell 40 items or more per month, it suddenly becomes a no-brainer on getting a professional account.
Professional accounts provide you access to a variety of additional features:
- Selling in extra product categories
- The option to create listings in bulk
- Usage of Amazon's API platform for advertisement
- The ability to add multiple users to your account
If you plan on becoming a serious FBA seller, you need to be a professional seller on Amazon. At $39.99 for a monthly subscription fee, a professional selling plan gives you access to reliable resources. Above are just a few of the more critical excerpts.
3. Details of Amazon FBA Seller Fees Pricing
When it comes to Amazon individual seller fees or professional fees, some costs stay the same between personal and professional accounts. As of June 2021, the process for many of these fees will change. This section will break down the cost changes you should expect going forward.
The following areas impact your Amazon seller fee:
- Shipping weight of items
- Size of items
- Product type
Let's break down how each of those categories might impact your Amazon fulfillment fees:
How Shipping Weight Changes Fulfillment Costs
Those going down to their local postal service know that the cost of shipping items changes depending upon the weight of the package. Heavier packages require more effort to carry, limiting the number of items a fulfillment truck can haul. The heavier the product, the more specialized your shipping needs become.
Selling on Amazon costs can rise based on that; the weight ranges from under 6 oz to over 150 lbs. As of June of 2021, your prices may vary by $2.70 for the lightest items with up to $138.11. Below is a table referencing heavier items:
The rates above do not include the base costs for items of varying sizes; this is where the next section comes in:
How the Size of Your Items Can impact Amazon Fulfillment Fees
Selling on Amazon costs also include an area for the size of your items. Much like the weight, immense packages can limit the shipping capacity of trucks. To address this, Amazon asks you to pay an additional premium for the size of your package.
You can find the dimensions of the different product categories here. "Special oversize" items require specific delivery protocols. For example, you cannot typically ship a fridge the same way you would send a box of snacks. Typically, customers require installation services.
You make this payment as a base rate in addition to the weight. Here's a table containing the details. This cost includes the rates in effect after June 1 of 2021:
There's also the final quality concern of item type that we will discuss in the next section.
4. Amazon FBA Seller Fees for Products Sold on Amazon
When it comes to selling on Amazon costs, the size and weight of the package are just one aspect to cover. There are three other product-based cost concerns: referral feels, product category-based fees, and returns.
Above is a great tool that provides you a breakdown that you can find here. It can break down standard category-related fees as well, but it doesn't include our next topic: referral fees:
How Do Referral Fees Impact Amazon Fulfillment Fees?
Commonly overlooked selling on Amazon costs include referral fees. Every product has a minimum referral fee of .30 cents, with Amazon Explore products going up to $5. It is just as important as the shipping rate, closing fees, and cost of using fulfillment centers because anyone and everyone take advantage of the referral program.
Each product category has a different range of referral fee percentages. It results in a change in your variable closing fees, especially as Amazon is coming upon a June 2021 update.
Here are some examples of the major ones:
- Amazon has a 45% referral fee for Amazon device accessories
- There is a 15% referral rate for any books
- Computer software and video games have a 15% referral rate
- Gift cards have a 20% referral rate
Unless you sell incredibly inexpensive items, you will likely pay more than the minimum referral fee of .30 cents. To ensure you can make a profit, you will need to account for this when setting an item price.
How Much Does Amazon Charge for Selling on Specific Product Categories?
Your Amazon seller fee can increase based on specific product categories. Some of this comes from changes we have already referenced. You can find an excellent example of this in action on our guide to selling food on Amazon.
In this area, we are referring to three significant changes:
- Unique storage needs
- Long-term storage issues
Food is an excellent example of unique storage needs. Food has expiration dates, chill transport requirements, and robust packaging requirements. The additional costs come through with fees for selling food, assuming your Fulfillment Center handles it. Seller Central often keeps track of these dates for you, wasting food before it becomes a problem.
Long-term storage fees are another problem that can impact your fees. If your sales per month aren't meeting your requirements, you will have to pay for the cubic feet and storage difficulty behind your items. Amazon does have a system through FBA to manage excess inventory, adjusting sales prices to address overstock items.
With the addition of Amazon Fashion, apparel also plans on taking a hit with the upcoming June 2021 changes. The fulfillment fees based on weight and size tier are slightly higher than the average. The fulfillment process, like through shipping fees, is expected to change across the board.
Amazon Fulfillment Fees - Dealing With Returns
The final area that impacts the "how much does amazon charge for selling" question comes back to returns. Despite your best efforts, product returns are an inevitable part of the job. You can address this issue by charging the customer a restocking fee, but you still end up paying for some wasted time.
The June 2021 update is seeking to reduce return fees on apparel. Return fees on watches, jewelry, luggage, handbags, and sunglasses also see a reduction to zero. For those who sell in those categories, that's a good piece of news.
You still want to put in the effort to reduce returns as much as possible. Mass returns will reduce your Amazon Sales Rank, resulting in poor customer service based on Amazon's perspective. The hidden costs behind these returns impact you more than the standard cost.
5. Amazon FBA Seller Fees for Multi-Channel Fulfillment
MCF, otherwise known as Multi-Channel Fulfillment, is a unique method for taking advantage of the FBA system through other eCommerce channels. Below are a few examples of channels they support:
They also support multi-channel listing software for managing product listings from a single location:
- Channel Advisor
As an overall shipping service for FBA sellers, MCF provides you an excellent way to produce both on-site and off-site stores. It is like being a third-party seller with the benefits of FBA.
MCF sellers are subject to many of the same size and weight requirements as standard FBA sellers. The larger and heavier your items, the more you have to pay for shipment. The process gets complicated as we get into the special oversized category.
To simplify things, MCF sellers are given into three areas of shipping:
- Standard shipping (one business day)
- Expedited shipping (two business days)
- Priority shipping (three to five business days)
The cost varies depending on the shipping chosen. You do have the voice of removing Amazon branding from your delivery box if you won't, but they will not replace it with your branding.
Does MCF Impact Selling on Amazon Fees on Returns
The significant difference between MCF and standard FBA is that you cannot receive reimbursement for fulfillment fees. There are also some other picky areas when it comes to MCF FBA usage:
- You can prevent yourself from lost or damaged refunds if you use MCF as a way to remove items from a fulfillment center or as a way to fulfill Amazon orders.
- You must provide proof of your buyer's delivery address on the package for reimbursement.
- You need to submit a "request for lost order" within 90 days of the delivery date for reimbursement.
While lost or damaged orders are more tricky, most everything seems the same.
Amazon FBA Monthly Storage Price
We've already mentioned some of the more specific category-based fees, but storage is a monster that Amazon sellers don't consider. That's because when considering selling on Amazon fees, newbies to the game often assume they can move inventory fast. Some products don't do that.
To address this issue directly, you can use the FBA revenue calculator to discover the overall costs of whatever item you are selling. Just fill in the information to find out the details. You can also use this to estimate competitor profits.
When it comes to monthly storage fees, the breakdown comes in three different forms:
- Depending on whether or not it is the holiday season
- The "per cubic foot" price
- The dangerous goods price
As you might expect, companies like to stock up on goods during the holiday season. Any items that stick around during that time must pay a premium for space. This premium varies from $0.75 to $3.63 per cubic foot.
Here's a table detailing variants
Different fees apply to long-term storage situations exceeding 365 days. The Long Term Storage Fee (LTSF) is $6.90 per cu ft or $0.15 per unit, depending on which is higher. Those fees appear on the 15th of each month.
How To Keep Your Inventory Moving and Avoid the LTSF
Here are some quick tips to make sure your inventory doesn't stay stagnant:
- Use FIFO (First In First Out) if you are an FBM seller. FBA sellers already have this set.
- Ensure you continue advertisement efforts both on and off Amazon.
- Submit a removal order to take items out of storage to avoid payment.
- Use Seller Central to set up automated removals for old inventory.
How much does Amazon charge for selling? A lot more if you happen to use their fulfillment center for storage.
6. Amazon FBM Fees
Amazon FBM, or Fulfillment By Merchant, takes out almost all of the fees mentioned above. As an FBM seller, you don't have to worry about Amazon charging you for the following:
- Shipping and storage
- Changes in cost based on size and weight of items
Instead, all of those worries are in the lap of the merchant, you.
For people who sell small quantities of items or have unique shipping requirements, FBM gives them great control over the entire shipping process. If you happen to be already a merchant who excels at logistics because of your unique item, this might be your option.
Amazon Individual Seller Fees - What to Expect From FMB
Selling on Amazon fees are heavily reduced when you don't rely on Amazon to handle your product's details. You must take two Amazon charges as an FMB seller:
- Referral fees
- Selling fees / Subscription costs
The cost of referrals does not change from FBA to FMB. You must still pay a minimum percentage cost for your referrals. This cost varies anywhere from 30 cents to 45%. That change depends on the price of your item and your product category.
Listing fees for FBM sellers are also the same. Expect to pay $1 per item sold unless you want to pay for a professional seller account at about $40 per month.
Because FBM and individual selling accounts are more commonly associated, you are more likely to prefer a personal account, given how Amazon favors FBA. However, FBM accounts can still take advantage of many of the things made available through paying a monthly subscription.
When it comes to Amazon FBA seller fees, they are very different when compared to FBM. When asking how much does Amazon charges for selling, be sure you keep the differences in mind.
7. Amazon Seller Fee - Miscellaneous Fees
Whether you deal with Amazon individual seller fees or other types of Amazon fulfillment fees, miscellaneous costs always seem to come up. Depending on your product category and other vital areas, you may find some lesser-known fees sneak up on you. Check out this list for details:
- Removal Order Fees
When removing items from a fulfillment center, Amazon fulfillment fees include a charge for inventory removal. This situation may happen if you have a large amount of unmoving stock that you don't want to leave behind.
Fees in this category vary from $0.25 to $2 per unit. You can also see $0.20/lb for anything above 2 lbs or 10 lbs, depending on it being standard or oversized.
- Rental Book Service Fees
Companies that offer textbook rentals need to pay a service fee of $5 per rental. Add $5 to whatever cost you would have put your textbook rental at to address this.
- High-Volume Listing Fee
If you have many listings that haven't sold in a year, Amazon charges $0.005 per listing to cover the cost of cataloging. If you have less than 100 thousand listings, you should expect this fee to be waived.
- Refund Administration Fee
Thankfully, Amazon refunds referral fees associated with returned items. However, they will request an administration fee that can be $5 or 20% of the referral fee (whichever is less).
The cost of the administration fee pays for the service of receiving the refund. This fee is Amazon's version of a restocking fee for your money.
8. FBA or FBM Fees - Which are Better?
There's no "one-size-fits-all" answer to this question. However, Amazon is typically much better than any small business at handling logistics. Unless you happen to sell a niche item that is challenging to ship, Amazon probably does it better than you.
When considering whether you want to be an FBA seller, do a cost analysis of what you currently do compared to what they offer. Using their online calculators, you will be able to figure it out pretty quickly.
Amazon fulfillment fees can add up pretty quickly, but when you gain access to Amazon's insane customer base, the cost typically pays for itself. There are a few exceptions to this rule if you sell less than 40 items per month or plan on advertising. Whatever you choose, you must line up the fees to determine your choice.
DataHawk offers a product benchmarking & Amazon ranking software that allows you to determine the best steps you need to take to remain competitive to address this issue. In combination with a total breakdown of your FBM vs. FBA options, you will be able to determine the best approach regarding fees.
If you are looking for additional help on creating a product details page, we have another article that will help you out. As an Amazon Seller, you know the importance of remaining competitive and hungry. With a bit of mental work, you will push your Amazon products to the top.