In their 26 years of operations, Amazon has managed to amass a broad and diverse customer base. According to a report in Etail, Amazon has more than 310 million active customer accounts worldwide. These figures consist of 90 million prime members and 220 million non-prime members. This makes it one of the first channels customers run to when carrying out a product search online. As businesses shift to online platforms, selling on Amazon offers a secure and stress-free way of reaching out to clients.
Join me as we breakdown the 12 standard Amazon fees you should expect.
1. Pay Subscription Fees while Selling on Amazon
While selling on Amazon, there is an option of an individual or professional account with an option to pay annually or monthly. Whereas there are no monthly subscription fees for individual accounts, professional members have to pay $39.99 every month. If you are selling less than 40 products monthly, it is not logical to open a professional plan. Instead, it is better to take advantage of the individual plan and pay $ 0.99 on items sold.
2. Fulfillment by Amazon (FBA) Fees
For customers who want to ship their products, they have to pay Amazon for it. The main advantage is that it is cheaper compared to other shipping platforms and saves time. Prices may differ depending on product weight and size. Other charges include packaging, shipping, and inventory storage costs. Note that selling on Amazon requires monthly storage fees for goods kept in the warehouse.
3. Referral Fees
Each time a consumer buys a product, the seller pays Amazon a certain percentage as a commission. Depending on the product and category, there is a flat rate of about 15% or less. Some categories charge a referral fee of up to 96%, like service contracts and protection plans. Luckily most categories charge much lesser than that.
4. Refund Administration Fee
Selling on Amazon allows customers to return goods bought. When this happens, Amazon refunds back the money plus the referral fee paid. They also charge a refund administration fee of about 5 to 20 % of the referral fee in exchange.
5. Variable Closing Fees
Sellers in the media category have to pay a variable closing fee between $1.35 and $1.80. Goods sold under this classification include video games, BMVD, computer games. Keep in mind that there are referral and minimum referral fees charged for the service.
6. Minimum Referral Fees
Some categories request a minimum referral fee when selling on Amazon. The fee may differ from one product to another but goes for an average of $ 1 each. For some specific categories like watches and jewelry, the fee can go up to $2.
7. Fulfilled by Merchant (FBM) Fees
These are the fees paid when sellers oversee their shipping costs. Compared to what the FBA sellers pay, FBM rates are much less. For FBM sellers under the individual selling program, they only pay the shipping rates set by Amazon. If the shipping cost is much lower than the standard Amazon rate, it comes as a disadvantage to the seller. To counter these, sellers should price their products accordingly to avoid running into losses. For the professional plan, members have an option of selecting the favorable shipping rate.
FBA fees include:
Inventory Storage (Per Cubic Foot)
• $0.69 to $2.40 for non-dangerous products
• $0.99 to $2.43 for potentially dangerous goods
• $2.41 to $137.32 per unit
• $0.39 to $0.91 for every pound over the weight limit
Per-Unit (Select Items)
• $0.40 per unit of clothing
• $0.11 per unit of items with lithium batteries
8. Shipping Credits & Costs for Selling on Amazon
If you opt to ship your products, Amazon gives out a shipping credit for the costs incurred. This approach may lure any seller, but there is a catch behind it. Amazon pays a much lower credit compared to the rates paid when shipping the products. To avoid paying the variances, you need to weigh how much selling on Amazon would cost you before running into losses.
9. High-volume Listing Fee
This applies to sellers with more than 1000 items listed under Amazon. Usually, sellers pay a monthly fee of $0.005 per item. This is also paid besides the FBA storage costs.
10. Unit Size Fee
Amazon ensures that your products get optimal packaging and labeling, but you have to pay extra for it. A standard size unit costs around $ 0.50 to $1.20, whereas oversized ones go up to $2.20 each. There is also an option for the multi-channel seller to pay for packing slips at 0.07% for each box. Additionally, Amazon charges for bar codes at $ 0.30 per unit.
11. Refurbished Category Fee
Rarely, Amazon may spruce up old products and resell them. This is usually a free service, but sometimes they charge a fee if the product costs more to restore.
12. Textbook Rentals fees
Booksellers and authors have a chance of marketing their products by selling on Amazon. There is also a textbook rental category which charges book readers $5 for every rental.
There are various positive reasons you should consider when selling on Amazon. However, you need to know the fees charged and how each benefits your business. While fee payments may discourage you, a higher clientele base through a straightforward process is far more rewarding for any business.