Did you know that nearly 60% of all Amazon sales come from third-party sellers?
As a merchant selling on Amazon, it is crucial to understand the platform fee structure and associated charges that can help organizations maximize profits.
This article will offer a comprehensive guide to all Amazon merchants on the various Amazon fees and charges associated with selling on Amazon. By correctly learning these fees, merchants can better plan their pricing strategies, avoid unexpected costs and ensure a profitable business ahead.
Types of Amazon Fees
When merchants are involved with Amazon selling, there are a lot of associated costs and fees. The following are the types of fees for Amazon selling:
- Subscription Fees
- Referral Fees
- Fulfillment Fees
- Per-item Fees
- Closing Fees
- High Volume Listing Fees
- Refund Administration Fees
Let us understand these fee structures properly.
Subscription Fees
For selling on Amazon, the platform offers two selling plans i.e. Individual and Professional selling plans and the subscription fees depend on which plan is chosen by the merchant. Merchants who go for the Individual Seller Plan do not have to pay any subscription amount since their pricing is calculated on the number of items sold. Professional seller plans will have a fixed subscription plan for the month in which they can sell any number of items, without a change in their payment plans.
- Individual Seller plan
This is a pay-as-you-go subscription plan where Amazon sellers pay $0.99/item sold as the fee. This plan is primarily suitable for sellers who sell near or fewer than 40 items per month. - Professional Seller plan
This is a monthly subscription fee plan where a fee of $39.99 is charged from the seller every month and is suitable for merchants who sell more than 40 items per month. This plan also offers unique features for sellers such as advanced selling tools, reports and top placement eligibility on product detail pages.
Per-item Fees – Selling Fee
Whenever a product generates a sale on Amazon, the platform collects a designated amount of fee from the seller. This fee is not applicable for Professional Sellers since they already paid the total subscription amount equal to or more than the per-item fee. Hence, individual sellers incur most of these fees. This cost includes the shipping prices, gift wrap charges, and any other costs involved. The Amazon shipping rates are applicable to all media products (music, DVDs, books, video game consoles, etc.) for both Professional and Individual sellers.
Please note that only a Professional Seller can offer the “Gift Wrap” option.
Referral fees
Referral fees are the specific commissions that Amazon charges for each product sold. This fee is a percentage of the total sales price (including the item price and any shipping or gift wrap charges). Referral fee varies between different product categories For example, Electronics can have a referral fee completely different than that of Jewelry or Apparel. The chart below shows some of the categories and their referral fees on Amazon.
Fulfillment fees
In Amazon, the fulfillment fee is calculated for both FBA and FBM models. There are, however, some differences.
Amazon FBA Fees (Fulfilled by Amazon)
Amazon FBA fees refer to the charges incurred by an Amazon seller when using the Amazon FBA service that covers store pickup, packing and shipping. Amazon FBA fees are mainly divided into two categories: FBA Fulfillment Fees and Storage Fees.
- FBA Fulfillment Fees
This fee incurred by the seller covers the cost of pickup, packing and shipment of the product/order by Amazon, along with the customer service and returns/refunds on the item. These fulfillment fees are calculated based on the size and weight of the product and are segregated into the following groups:- Standard Item – Small
- Standard Item – Large
- Oversize Item – Small, Medium, Large, Special
- Storage Fees
This fee includes the charges incurred by sellers for storing their inventory of products in Amazon’s fulfillment centers when using the Amazon FBA model. These storage fees is calculated on the basis of the amount of space any inventory occupies over a given period of months (charged monthly). The monthly storage fee is also divided into two categories:- Monthly Storage FeeThis fee is charged based on the volume of inventory stored in any of Amazon’s fulfillment centers. The charges are calculated and measured per cubic foot and vary depending on the time of the year (higher monthly inventory storage fees during peak seasons like October to December)
- Long-Term Storage FeesThese long-term storage fees are eligible for items that have been stored in some of Amazon’s fulfillment centers for more than 365 days. For such items that have crossed the 365-day threshold, an additional long-term storage fee of $6.90 per cubic foot or a minimum of $0.15/unit sold is incurred, whichever is higher. This fee is assessed on the 15th of every month and the idea behind it is to encourage the amazon seller to manage their inventory and items efficiently and eradicate the slow-moving items to make space for the faster-selling revenue-generating products.
- Additional Fees
- Removal Fees – This fee is charged for removing given inventory from any Amazon fulfillment centers based on the volume of items – Standard item for $.50/item and Oversize item for $0.60/item.
- Disposal Fees – This fee is charged for disposing of the unsellable inventory stored in any Amazon fulfillment centers. This fee is also calculated based on the volume – Standard item disposal for $0.15/item and Oversize item for $0.30/item.
Amazon FBM Fees (Fulfilled by Merchant)
Amazon FBM fees are the charges that a seller incurs when they handle their own storage, packaging and shipping solutions – these charges can include shipping fees, packing materials, labor costs, etc. Although the FBM fee structure is, at times, cheaper than the FBA model, the required effort and resources from the seller are way higher.
Closing Fees
Amazon closing fees are additional costs incurred by the merchants that are applied to certain product categories sold on Amazon. These fees are associated with media items, mainly books, DVDs, music videos, video game consoles, etc. and are calculated at $1.80/item sold.
High Volume Listing Fees
This is another fee Amazon charges from its sellers for listing and maintaining high volumes of items (typically over 2 million products per month) at $0.005/item sold. This is charged to cover the system costs associated with listing higher product volume and maintaining greater numbers of ASINs.
Refund Administration Fee
The Amazon refund administration fee is a charge that Amazon charges from its sellers when they issue a refund to any customer. This fee is applied to cover the administrative costs related to refund initiation and processing. If a merchant refunds to any of their customers for any order for which the payment is already done, Amazon refunds the referral fees amount to the seller, minus an approximate 20% Refund Administration fee on the referral fee.
Amazon Seller Repay Charges
The $39.99 is the recurrent amount charged for every “Professional Seller account.” Whether you sell nothing or sell 10,000 products per month, this fee will still be charged.
However, if you don’t want this fee to be charged on a monthly basis, you can go to your seller account and just downgrade the plan to “Individual Seller Account,” which charges only when you generate a sale.
Rather than paying $39.99 per month, you only pay an additional 99 cents for the item that you sell + the commission as well as the variable closing fee updated in the fee chart of Seller Help.
If you would like to downgrade your selling plan, go to Account Settings > Tasks & Tools > Switch your selling plan / close your selling account.
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