Amazon guide: The cost of selling on Amazon for new sellers

With 9.5 million current sellers globally, Amazon has become one of the top eCommerceworld's leading digital retailers. New Amazon sellers makea net revenue worth over $26,000 to $810,000 annually. This makes Amazon a gold mine for any newbie sellers. One thing you have to be aware of when you start selling on Amazon is that the fee to operate an Amazon store isn’t cheap. But, the benefits of selling on a global marketplace with more than 2 million traffic a monthoutweigh the cost of selling on the marketplace. Let's dive right into this article to break down the cost of selling on Amazon.

Monthly Subscription Fees

The cost to sell on Amazon for each seller will not be the same because it will be based on their selling plan, product category, and fulfillment strategy,... The options are flexible. When it comes to a subscription plan, sellers can choose between an Individual and professional plan that works best for their goals.

How much does Amazon take from sellers? Amazon’s Professional seller account costs$39.99each month while Amazon’s Individual seller account only costs$0.99/per item sold. Each plan will provide different features for the user. 

Amazon’s Professional seller account allows:

• Add new products to the Amazon catalog
• Grow your business with Fulfillment by Amazon
• Apply to sell in additional categories
• Save time creating listings in bulk
• Qualify for top placement on product detail pages
• Increase selling efficiency with API integration
• Set your shipping fees for non-media products *
• Manage inventory with feeds, spreadsheets, and reports
• Attract shoppers with on-site advertising tools
• Run promotions including free shipping
• Add multiple users to your account

This plan is designed for businesses that sell more than 40 units per month, want to advertise products, and sell products in restricted categories,...If you are a small retailer, you can make use of an Individual plan with no monthly subscription fee ( $0.99/ item sold instead). This plan will limit some features such as gift-wrapping, listings uploaded manually, unable to sell various categories such as Jewelry, Shoes, Handbags, Art, and Food,...

Referral Fee

The cost of selling on Amazon includes some referral fees. Amazon charges a referral fee for each item sold. The amount depends on the product category. Most referral fees are between 8% and 15%, this percentage may vary depending on which category your products are in. This fee plays a role as a commission for Amazon whenever you sell an item.

For example, when you sell an item in the Amazon Device Accessories category, you have to pay a 45% referral fee percentage. Most categories have a minimum referral fee, which means you have to pay $0.3 if the referral fee is lower than that.

There are some categories for that Amazon does not require a minimum referral fee, they are Collectibles - Entertainment, Collectibles - Sports, Fine Art, Gift Cards, Grocery and Gourmet, Media - Books, DVDs, Music, Software, Video, Video Games and Gaming Accessories, Video Game Consoles.

The referral fee percentage is also adjusted based on the specific price of each category. For example, in the baby product category, the referral fee will be 8% for products with a total sales price of $10.00 or less and 15% for products with a total sales price greater than $10.00.

Fulfillment fees

The fulfillment fee will apply differently for the seller to use FBA or ship the product themself. 

FBA Fees

There are 3 kinds of FBA Fees,FBA Fulfillment Fees for non-apparel, FBA Fulfillment Fees for apparel, and FBA Fulfillment fees for Small and Light.

• For non-apparel products, the Fee per unit includes picking and packing your orders, shipping and handling, customer service, and product returns. Fees are based on the weights and dimensions of your product. The bigger your products are, the higher fees you have to pay. It is quite similar to apparel products. For products with small dimensions and weight, Amazon will apply a lower price, the max dimension for items on this list is 15" x 12" x 0.75" and 18” x 14” x 8”.

If you are using FBA, there is one more fee you have to pay, which is the FBA storage fee. The fees are added because your products are being stored in Amazon fulfillment centers, Amazon charges a storage fee to maintain your inventory monthly or long-term.

• Monthly Storage Fee:  If you have products in the Amazon warehouse at the end of the month, they charge you a monthly storage fee. If your Amazon account does not have enough funds to meet the fee, the amount is either deducted from your account balance or charged to your credit card.

• Long-term Storage Fee:Every month on the 15th, Amazon undertakes inventory clean-ups. During the clean-up, Amazon keeps track of any products that have been sitting in their fulfillment centers for 365 days or more. Amazon then charges the seller a Long-term storage cost of $6.90 per cubic foot of storage used or $0.15 per unit, whichever is more, for things stored for 365 days or longer. Long-term storage fees, like monthly storage fees, are collected from your Amazon seller account balance or the credit card you provided when you registered as an Amazon seller on the same date each month.

Please keep in mind that during Amazon's busiest seasons, these fees may increase in order to incentivize merchants to remove slow-selling items.

FBM Fees

FBM vendors do not have their own fees, as do FBA sellers. However, because FBM merchants must store, choose, pack, and ship their own products, their selling costs are frequently greater than those of FBA sellers. They must also manage their own customer service.

For example, if an FBA seller sold a stainless steel cup for $30, she/ he would pay $4.50 in referral fees and $5.14 in FBA costs.

FBM merchants utilizing the Individual selling plan are required to use Amazon's shipping rates, even if the shipping credit is less than the total shipping cost. If this applies to you, it's critical that you price and reprice things carefully and aggressively to avoid being stung by Amazon's prices.

Other costs to sell on Amazon

These fees mentioned above are not the total fees sellers have to pay, there are a few other minor fees to consider before listing your products on Amazon. These fees are optional and paidregardless if you are an Amazon FBA or FBM seller.

• High-volume listing fees:When you have a high volume of active, non-media listings that have not sold in 12 months, Amazon charges a monthly fee of $0.005 per eligible listing to cover cataloging costs. Amazon waives this fee for the first 100,000 listings.
• Refund administration fee:If you refund a customer for an order that has already been paid for, Amazon will return you the amount of the referral fee you paid for the item(s), less the applicable refund administration fee, which is the lesser of $5.00 or 20% of the applicable referral fee. For example, if you refund a customer the $10.00 total sales price of an item in a category with a 15% referral fee, your refund administration fee will be $0.30 ($10.00 x 15% referral fee = $1.50).
• Amazon boxes: Most FBA sellers have already put their products on boxes. If sellers want to use Amazon boxes when sending out the item, they have to pay the fee of $0.15/unit for November to December and $0.10 for the rest of the year.
• Rental books service: If sellers rent textbooks, they  anticipate paying a $5.00 rental book service fee per rental.
• Ads cost: Choose sponsor brands or Sponsor products to promote your listings. These fees are up to you and will be counted based on your ads budget.

Wrap up!

That’s everything about Amazon fees you need to know. When it comes to Amazon, keep in mind that you have to pay more to stay in the game. Prepare carefully to set your price and start selling on Amazon today. Do not forget to choose products wisely even if you are FBA or FBM sellers. 

With the help of Printway - Print On Demand Fulfillment Supplier, selling on Amazon and other platforms has never been easier. We help businesses with printing, packaging, brand building, shipping, and more.

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