Before you start getting excited about potential profits, you need to understand your expenses. People often ask; what does Amazon charge you? In this guide, I will outline the fees you need to know about as a new seller.
Knowing about each of these fees is essential for planning and devising a pricing strategy that is worth your while.
What Does Amazon Charge You – A Guide to Fees
I have placed the different Amazon fees into separate categories to make it easier to understand.
Amazon Subscription Fees
All Amazon sellers have to pay a subscription fee. When you create your account, you get to choose between a Professional or Individual account. Different fees apply to each of these options.
Individual Account Fees
If you are planning to sell 50 items or less every month, there is no need to pay for a Professional account.
As an individual seller, you can expect to pay $0.99 for every item you sell – there is no monthly fee. If you only sell a handful of items every month, you may end up paying more for a Professional subscription than you are earning.
You should be prepared to upload each of your listings manually. Amazon will also set the shipping rates for your products. Unfortunately, as an individual seller, you won’t be able to offer gift-wrapping.
Professional Account Fees
As a professional seller, a monthly fee of $39.99 applies.
With a professional Amazon selling account, you get access to the Amazon Marketplace Web Service; this is a big plus.
You can set your shipping rates, and of course, add taxes to your orders.
Speaking of tax, here is what you need to know about tax IDs and selling on Amazon.
Unlike individual sellers, professional sellers can run special promotions and have access to more tools to help them win the Buy Box.
Another bonus of a Professional Amazon account is that you get to sell in additional categories.
These are:
- Automotive Parts & Accessories
- Business to Business (B2B) products
- Collectibles Coins
- Fashion Jewelry
- Fine Jewelry
- Fine Art
- Grocery, Food & Gourmet
- Industrial & Scientific
- Professional Services
- Sports Collectibles
- Video, DVD, & Blu-ray
- Watches
If you haven’t yet decided on the products you want to sell, you will want to learn about the research technique I go through in the video below:
Amazon Sales Fees
These fees relate to the items you choose to sell on Amazon.
Referral Fees
Every time you sell a product as a professional seller, you pay Amazon a small commission. In most instances, the referral fee is around 15%, but this can change depending on the product category.
Device accessories, extended warranties, and service contracts attract the highest referral fees – as much as 96%.
There is also a minimal referral fee that applies to most categories. If a referral fee percentage is lower than $0.30, that is what you will pay per product; this excludes the books, fine art, food, music, gift card, entertainment collectables, and service contract categories.
The total sales amount can change the referral fee too. Some categories have different referral fee schedules. For example, if you sell sports collectables for over $100 but less than $1,000, the referral fee is less than 10%. The standard referral fee for this category is 20%.
Variable Closing Fees
If you are planning to sell products under Media, expect to pay an additional $1.80 in variable closing fees, this applies to products such as gaming consoles, software, and games.
Refund Fee
If a customer decides to return a product, Amazon will refund the cost of the item as well as the referral fee. However, you will need to pay a refund admin fee of $5 or 20% of the referral fee, whichever is less.
Fulfilment by Amazon Fees
If you decide to go down the FBA route, there are three different fees you should know about.
Order Fulfillment Fees
Product size and weight determine the order fulfilment fee. The larger and heavier the item is, the more you will pay. The lowest order fulfilment fee is just over $2. Oversized items can cost as much as $75 or $0.79 per pound.
Monthly Storage Fees
It would be best if you aimed to sell your products as quickly as possible; this is because Amazon also charges a storage fee. This fee changes depending on the time of the year and how much space your products require.
Storage for standard items cost $0.69/cubic foot between January and September and $2.40/cubic foot from October to December.
For those who need to store larger, oversized items, expect to pay $0.48/cubic foot between January and September and $1.20/cubic foot from October to December.
Long-Term Storage Fees
Items taking longer than expected to sell? That’s going to cost you. Long-term storage fees are applicable when items are stored for more than 6 or 12 months. This fee is calculated in February and August.
Amazon’s FBA fee calculator is a convenient tool if you want to get a better idea of FBA fee estimates.
Fulfilment by Merchant Fees
If you are planning on shipping the items yourself, you won’t have to worry about Amazon’s fulfilment fees. You will, of course, need to account for your shipping costs.
With the professional plan, FBM sellers will not have a “Per Item Selling Fee”, but the referral fee is, of course, still applicable.
Most sellers still charge the customer for shipping; you can set these rates inside of your Amazon seller central account.
Additional Fees
Over and above these standard fees, some additional extras might apply to you:
- Dangerous Items. If you plan to sell items that are deemed dangerous by Amazon, you can expect to pay an additional FBA fee of between $0.06 and $0.29 for the items that are allowed. Be warned; Amazon is stringent when it comes to dangerous/hazardous goods.
- Textbooks Rentals. Selling textbook rentals attract an extra $5 for every rental.
- Refurbished Products. When second-hand items can be refurbished, you can re-sell for free. However, a fee is charged if an item is deemed ineligible for refurbishing. If you want to sell a refurbished product professionally, Amazon has a program for this.
- High-Volume Listings. If you are planning to list more than 100,000 products, you will pay $0.005 per item. This fee is charged at the same time as your storage fees.
- Prepping and Labelling. Want Amazon to prep and label your products for you? Standard items cost between $0.50 to $1.20, while oversized items cost between $1.00 to $2.20. If you want to add on packing slips, expect to pay $0.07 per box. Lastly, to apply barcodes to your products, Amazon charges $0.30 per unit.
- Returns. If an item is returned in a damaged box, Amazon will charge you a service fee to repackage the product.
Getting Paid by Amazon
Fee’s and costs are essential, but when can you expect to be paid by Amazon?
Once you start generating a profit, Amazon will use Automated Clearing House or electronic funds transfer to send the balance to your bank account.
You can expect the funds to take about five business days to clear, but this is different depending on the bank.
Unfortunately, you won’t be able to use services such as PayPal to receive payments; we do, however, use Payoneer (explained in this article).
If you want to full details on how Amazon pays sellers and the turnaround times, read my guide here.
Amazon Fees – What’s Next?
Pricing your inventory correctly and making a profit all starts with understanding the additional costs associated with selling on Amazon.
Pricing also feeds directly into other activities such as winning a share of the Buy Box.
To make it easier to track expenses and profits, I recommend looking into tools such as Sellerboard; I’ve reviewed this tool here.
As someone new to the world of online selling, you may have some other questions, if you do leave me a comment below and I will get back to you as soon as I can.
