For Amazon sellers, understanding the breakdown of Amazon costs or Amazon fees is crucial to maintaining profitability. And as an Amazon seller, you should know the calculation of where you are spending and how to increase Amazon profit by excluding the Amazon fees. Basically, Amazon charges selling fees, fulfillment fees, Referral fees, and a few other fees from the sellers. The fees may vary from your listing’s category to category. In this blog, we delve into the details of every Amazon fee, their impact, and how they are calculated. Whether you’re a seasoned seller or just starting, this information will empower you to make informed decisions and optimize profits on Amazon.
1. Common Amazon Selling Fees:
Amazon sellers must pay various Amazon fees to sell on the platform. Some of the most common fees are:
- Selling Amazon Fees: These charges are calculated based on the item’s selling price and are applied per item sold. In most categories, the fee represents a percentage of the sale price, with a minimum Amazon fee. The rate varies depending on the product category, ranging from 8% to 15%.
- Referral Fees: Amazon imposes this fee in addition to the selling fee. It is a percentage of the item’s sale price and varies depending on the category in which the item is sold.
- Amazon Fulfillment (FBA) Fees: Sellers utilizing Amazon’s fulfillment service will face supplementary charges covering storage, pick, pack, and shipping services. The fees fluctuate based on the item’s size, weight, and time of year.
- Subscription Fees: Sellers seeking extra services, such as access to Amazon’s Buy Box, may need to subscribe to one of Amazon’s selling plans, incurring monthly or annual charges.
- Advertising Fees: Sellers looking to promote their products through Amazon’s advertising platform will encounter additional costs. These fees operate on a cost-per-click model, where the seller pays for each click on their ad.
- Returns Processing Fees: FBA users may be subject to fees for processing returns, contingent on the item’s category and size.
- Long-Term Storage Fees: FBA sellers with inventory stored in Amazon’s fulfillment centers for over 365 days will be charged long-term storage fees.
Now we are going to look at the fees you’ll pay as an Amazon seller, breaking them out into four distinct sections:
- All Amazon selling fees
- FBA selling fees
- FBM selling fees
- Additional Service Charges
2. Essential Amazon FBA Fees for Sellers
Regardless of whether you operate as an FBA or FBM seller, these are the essential Amazon selling fees you need to cover to kickstart your selling journey.
a) Amazon Referral Fees
A referral fee is the “commission” paid to Amazon for each item sold on their platform. Typically, this fee is a flat percentage, often 15% or less.
- Percentage of sale price charged for each item sold.
- Varies by category (mostly 8%-15%, some as low as 2%, some as high as 45%).
- Check specific fees in the Seller Central Fee Calculator.
The Amazon referral fees is based on the category you are selling your items. Here you can see the list of fees for a better understanding on the below image. If you’re interest, you can see this post to see how you can maximize your net profits and gain more sales.
However, you don’t have to pay these Amazon fees upfront. Instead, referral fees are taken out of your Amazon account after the sale is made.
b) Subscription Fees
- For individual seller accounts, there is a per-item fee of $0.99 for each sales transaction, eliminating the need for a monthly subscription fee. These Amazon fees are deducted post-sale from the funds deposited into your Amazon account balance, and there’s no upfront payment required.
- Professional seller accounts incur a flat monthly subscription fee of $39.99, negating the necessity for a per-item charge per product sold. Similar to individual seller Amazon fees, subscription fees are withdrawn from your Amazon account balance.
In cases where there are insufficient funds in your account, the amount is debited from your linked credit card.
c) Amazon Refund Fees
In the event that a customer requests a refund for a product you’ve already received payment for, and Amazon processes the refund, a fee is incurred. The fee is determined as either $5.00 or 20% of the refunded charge, whichever is lower.
Similar to the previously mentioned fees, refund administration fees are promptly settled using your Amazon account balance. If your account lacks the necessary funds, the fee is charged to your linked credit card.
3. Amazon Costs for FBA Seller Only
Amazon FBA costs depend on your seller account type (Individual or Professional), product category (referral fees vary), dimensions/weight (fulfillment fees), and storage needs. Use the Seller Central Fee Calculator for specifics! FBA can boost your business, but understanding the costs involved is key.
a) FBA Fulfillment Fee
For FBA sellers, the FBA Fulfillment Fee on Amazon encompass shipping, handling, and packaging, as these tasks are managed by Amazon’s fulfillment staff. Rather than personally handling these logistics, Amazon takes care of picking, packing, and shipping your products.
To offset these services, Amazon charges FBA selling fees, with the amount determined based on the size and weight of the products being handled through the FBA program.
The chart below shows the current Amazon cost for FBA sellers.
b) Amazon Fees For Holiday Fulfillment
The Holiday Peak Fulfillment Fee for FBA (including apparel and dangerous goods) will apply from October 15, 2023, through January 14, 2024. The Holiday Peak Fulfillment Fee does not apply to items priced under $10, for which Low-Price FBA rates are applied. On January 15, 2024, fulfillment fees will revert to the non-peak period rates. For Oversized items, the fulfillment rate may vary.
c) Fulfillment by Amazon (FBA) Storage Fees
As your products are stored in Amazon’s fulfillment centers, storage fees are applied to maintain your inventory. These fees come in two categories: monthly and long-term.
Monthly Storage Fees: The monthly Amazon fees are divided into two parts for different kinds of product categories. These are the types of Amazon FBA fees for yearly quarter and if the item is Hazmat/Dangerous or not. Before you send your item to Amazon FBA, please make sure that you know what are the fees.
- January -September Non-dangerous goods
- January -September dangerous goods
- October -December Non dangerous goods
- October -December dangerous goods
4) Amazon Costs for FBM Seller Only
Fulfillment by Merchant (FBM) sellers don’t have distinct fees like Fulfillment by Amazon (FBA) sellers. However, the overall cost of selling on Amazon as an FBM seller is often higher compared to FBA sellers. This is because FBM sellers are responsible for managing their storage, order picking, packing, shipping, and handling customer service.
For instance, consider a scenario where you sell a stainless steel mug for $30 as an FBA seller. In this case, you would incur $4.50 in referral fees and $5.06 in FBA fees.
Now, if you were to sell the same product as an FBM seller, you’d need to account for additional costs such as shipping (estimated at $6) and packaging (estimated at $1). This brings the total fulfillment cost to approximately $7, excluding any labor or storage expenses.
5) Additional Amazon Service Fees
The final category of fees outlined in this article pertains to charges applicable to a select group of sellers, irrespective of whether they operate as Amazon FBA or FBM sellers.
- Closing Fees: Applicable to sellers focusing on media products like books, DVDs, CDs, and Blu-rays.Involves a flat $1.80 fee per sale. Similar to referral fees, closing fees are deducted from the sale proceeds, eliminating the need for upfront payment.
- High-Volume Listing Fee: Imposed on sellers managing thousands of ASINs.A monthly flat fee of $0.005 per eligible ASIN.Only relevant for sellers with over 100,000 listed products.Paid concurrently with FBA storage fees, deducted from the Amazon account balance. If funds are insufficient, the amount is charged to the linked credit card.
- Rental Book Service Fees: Applicable to sellers renting textbooks on Amazon. Involves a $5.00 rental book service fee for each textbook rental sold. Similar to referral fees, rental book service fees are deducted at the time of sale, eliminating the need for advance payment.
6) Changes in Amazon Selling Fees for 2023:
Amazon has introduced fee changes, especially impacting FBA fulfillment fees. These changes, influenced by global economic factors like fuel prices and inflation, are set to take effect from January 17, 2023.
Key Changes:
- FBA Outbound Fee: Increasing by an average of $0.22, with updated weight tiers.
- Returns Processing Fees for Apparel and Shoes: Reduced by an average of $0.20 per return.
- Storage Fees: Monthly off-peak and peak storage fees will increase, along with new surcharges for storage utilization and aged inventory.
- Removal and Disposal Fees: Set to increase, excluding liquidation fees.
Insights
Navigating Amazon fees involves understanding selling, referral, and fulfillment fees, essential for both FBA and FBM sellers. Explore costs like storage fees, subscription fees, and unique charges such as closing and high-volume listing fees. Stay informed for a successful selling experience on Amazon in 2024.
If you need any help with Amazon fees or Amazon costs, you can contact us via email at info@ecomclips.com with this blog reference.
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