Amazon Fees Review
Selling on Amazon can be a lucrative venture, but understanding the full range of fees is critical for managing profitability. Here’s a detailed breakdown of all Amazon fees from a seller's perspective:
1. Amazon Seller Plan Fees
Amazon offers two selling plans:
Individual Plan
Cost: $0.99 per item sold.
Who it’s for: Sellers with low monthly sales volume (less than 40 items per month).
Pros: No subscription fee.
Cons: Becomes costly if sales volume increases; lacks access to advanced tools.
Professional Plan
Cost: $39.99 per month (flat rate).
Who it’s for: Sellers with higher sales volumes (40+ items per month).
Pros: Access to advanced selling tools like advertising, bulk listing, and detailed reports.
Cons: The fee is fixed regardless of sales performance.
2. Referral Fees
Amazon charges a referral fee for every item sold.
How it works: The fee is a percentage of the total sales price (item price + shipping and gift wrap charges, if applicable).
Rates: Range from 6% to 45% depending on the product category.
Example:
Books, Music, DVDs: 15%
Consumer Electronics: 8%
Apparel: 17%
Amazon Device Accessories: 45%
Minimum referral fee: Some categories, like jewelry, have a minimum referral fee (e.g., $2).
Pro Tip: Review referral fee tables for your category to ensure your pricing structure accounts for this deduction.
3. Fulfillment Fees
These apply if you use Amazon’s Fulfillment by Amazon (FBA) service.
Fulfillment by Amazon (FBA) Fees
What’s included:
Picking, packing, and shipping.
Customer service and returns handling.
Cost: Based on item size and weight.
Standard-size items: Start at $3.22 for small items weighing up to 0.5 lbs.
Oversize items: Start at $9.73 for small oversize items under 2 lbs.
Additional surcharges: Seasonal inventory, oversized dimensions, or hazardous materials.
Merchant Fulfilled Network (MFN) Costs
Sellers handle shipping themselves, avoiding FBA fees but incurring shipping and labor costs.
4. Storage Fees
If you use FBA, Amazon charges for storage.
Monthly storage fees:
January – September: $0.87 per cubic foot (standard-size), $0.56 per cubic foot (oversize).
October – December (peak season): $2.40 per cubic foot (standard-size), $1.40 per cubic foot (oversize).
Long-term storage fees:
For inventory stored over 365 days, an additional $6.90 per cubic foot or $0.15 per unit (whichever is greater).
Tips to Manage Storage Fees:
Optimize inventory turnover.
Use inventory reports to identify slow-moving items.
5. High-Volume Listing Fees
Applies to sellers with over 2 million active SKUs.
Cost: $0.005 per item per month for each SKU above the threshold.
Who it affects: High-volume, multi-SKU sellers.
6. Closing Fees (Media Categories Only)
Applicable to media categories like books, DVDs, and video games.
Cost: $1.80 per item sold.
Example: Selling a book for $20 incurs a $1.80 closing fee in addition to the referral fee.
7. Refund Administration Fees
If you refund a customer, Amazon retains 20% of the referral fee or $5 (whichever is less).
Example:
If you refund $50, Amazon retains 20% of the referral fee (e.g., $1.50 if the referral fee was $7.50).
8. Advertising Costs
Amazon Ads are optional but essential for driving traffic.
Sponsored Products, Sponsored Brands, Sponsored Display:
Cost: Pay-per-click (PPC); depends on bid competition.
DSP (Demand-Side Platform):
Costs can range from $35,000+ for managed service campaigns.
Budgeting tip: Start with low bids and optimize over time.
9. Currency Conversion Fees
If your disbursements are converted to a currency different from Amazon’s payout currency, a currency conversion fee of 3-4% may apply.
10. Other Fees
Returns Processing Fees
For FBA, Amazon charges fees for handling customer returns in some categories.
Example: Clothing and shoes may incur additional fees for customer returns.
Labeling Fees
Cost: $0.55 per unit if Amazon labels your products for you.
Prep Service Fees
Amazon can prepare items for FBA (e.g., bubble wrap, polybagging).
Cost: $1-$3 per unit, depending on the service.
Removal and Disposal Fees
To remove unsold inventory from Amazon’s warehouse:
Removal fee: $0.32–$2.20 per unit.
Disposal fee: $0.15–$0.60 per unit.
11. Taxes
Amazon automatically collects and remits sales tax in many states. Sellers may incur additional costs if required to remit taxes in non-Amazon jurisdictions.
Navigating Amazon’s fee structure is essential to ensure profitability. Here are some tips to manage fees effectively:
Calculate all fees upfront to set competitive yet profitable prices.
Monitor inventory and sales performance to minimize storage fees.
Leverage FBA strategically, especially during high-demand periods.
Utilize Amazon’s tools and reports for fee forecasting and management.
Understanding these fees empowers sellers to maximize their ROI while building a sustainable business on Amazon’s platform.
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