If you're selling on Amazon, you're probably wondering how much you'll be charged in fees. Amazon seller fees can vary depending on the type of product you're selling, the price of your product, and other factors.
Getting a grip on all the charges can be confusing and overwhelming, but I'm here to help! I'll give you an overview of the most common selling fees on Amazon, so you can avoid surprises when the billing arrives.
Understanding Amazon Seller Fees
As an Amazon seller, you are responsible for shipping your products to Amazon warehouses and other fees associated with listing and selling them on the platform.
The standard fees you will pay as a seller are:
- Monthly subscription fees
- Referral fees
- Amazon fulfilment fees
- Other costs
Prices can vary depending on the type of product you sell and whether you are selling as an individual or a professional.
Here is a breakdown of the most common Amazon seller fees:
1. Monthly Subscription Fees
Signing up for an Amazon seller account means choosing between an Individual and Professional plan.
The fees for UK sellers exclude the VAT charges. Check this article to find out how Brexit has affected your Amazon fees.
With this plan, you can sell up to 40 items per month. You'll pay a $0.99 fee for each item you sell, plus additional fees. For UK sellers, it's a £0.75 fee per item for up to 35 items a month.
It does not offer the premium account services, including advertising tools, bulk manage inventory service, advanced selling tools, setting the shipping rate, and promotional campaigns.
The plan is perfect for professional sellers who want to sell products in bulk. You can sell unlimited products for a flat monthly fee of $39.99 or £25.
The individual plan may be a good option if you're a part-time seller. You can test the waters and see if selling on Amazon is right for you. When you find success, switch to the professional plan.
2. Referral Fees
What is Amazon referral fee? It's a portion of the total sale price of an item, including the actual product price, shipping charge, and an optional gift-wrapping cost. The fee percentage varies depending on the product category and total sales price.
Most categories have a $0.30 or £0.25 minimum referral fee. If the total referral cost is less than the minimum amount, sellers pay the minimum amount.
For example, let's say you're selling a pair of shoes priced at $95.99. The shipping cost is $3.99, and the product is eligible for gift wrap, which may cost $2. The applicable referral fee percentage for the Footwear category is 15%, so the referral fee will be $15.30.
3. Fulfilment by Amazon Fees
You will be charged Amazon FBA fees when you choose its warehouse storage. It's based on the product's weight, per cubic foot it takes, and the shipping service selected.
Amazon will then store your product in one of its warehouses and ship it to the customer when they order it.
The fulfilment fee for the FBA sellers can vary depending on apparel and non-apparel categories. Also, the costs will be less for some items qualified for Amazon's "Small and Light" category.
In addition, you have to pay a monthly flat fee for storing your products in their inventories.
Calculating the fees is complicated because the costs vary based on the month of the year, item type and size, and dangerous goods. Amazon FBA UK fees also depend on these same factors.
When you take care of the delivery, Amazon returns the shipping costs as a shipping credit.
The platform sets fixed shipping rates for individual plan subscribers. But the sellers with the professional plan can set their own shipping fees.
4. Other Fees
In addition to these basic fees, sellers must pay extra costs, but these won't apply to everyone.
Inventory Storage fees
It applies when you choose to store inventory in an Amazon warehouse. Using this service means you have to pay additional inventory storage fees for monthly storage and for removing orders.
If your products don't get moved quickly, you will also have to pay long-term storage fees.
Rental book service fees
If you do the business of renting textbooks, Amazon charges 5 for each rental. The UK sellers don't need to pay the rental book service fee.
High-volume listing fees
Prepare to pay this charge when you have over 2 million active non-media listings monthly. Over that threshold, you need to pay $0.005 or £0.0003 per listing.
Refund administration fees
When you sell on Amazon, you may sometimes receive a refund request from the buyer. If this happens, Amazon will refund you the item's price but charge a fee. The applicable refund administration fee will either be $5.00 or 20% of the referral fee.
How to Calculate the Selling Fees on Amazon
A lot of factors matter when calculating Amazon seller fees. The product category, weight, selling plans, fulfilment strategy, and many more things.
Choose one option from the list, put your numbers, and you will get a clear idea of all the costs in no time.
You're in luck if you are looking for more resources for your Amazon business, particularly with accounting software.
How to Cut Down Your Amazon Seller Fee
Amazon fees can take a significant chunk out of your profits. Fortunately, there are several ways to cut down on these charges.
- Bulk sellers can save significantly by choosing the professional plan for a monthly subscription fee.
- Store the products in your own warehouse to save the monthly inventory storage costs.
- Monitor your inventory performance dashboard closely. You can quickly identify any issues that might be driving up your fees.
- Keep your inventory moving to avoid paying long-term usage fees. Check the inventory levels and remove items that are not selling.
- Check for overcharged fees and unpaid compensations. Amazon processes millions of transactions daily, so some miscalculations can happen.
If you're a seller on Amazon, it's essential to be aware of these fees to budget for them appropriately. Even if the figures look small, they can add up and eat into your profits. So, you must factor everything into your pricing and find ways to reduce costs to stay afloat.
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