Amazon Seller Fees: What’s Your Cost of Doing Business on Amazon?

Amazon seller fees can seem daunting and make some people skittish about joining the marketplace. However, understanding potential costs and knowing your options can give you an excellent path to success, whether you’re just getting started or looking to expand an established eCommerce brand.

There are many different fees to consider, and this post will look at:

• General monthly fees

• Sales fees

• Fulfillment costs

• Storage fees

• Estimated advertising expenses

• Miscellaneous fees

Those might sound like a lot, but they’re ordinary expenses you’ll face with running any sales-oriented business. In some cases, you’re simply shifting costs to the Amazon account instead of incurring them in your operations. Let’s dive deep and see what Amazon seller fees look like for you.

General Monthly Sales Costs

First and foremost, Amazon sellers generally face either a monthly sales fee or a per-item fee for any time an item sells. These expenses are based on your selling plan. You have two options: Individual and Professional. In Amazon’s selling plan comparison list, the only unique feature to be shared across both plans is the ability to create new product pages in the Amazon catalog. 

Individual plans don’t have a monthly fee, but they do come with a $0.99 per-item fee when an item sells. This plan makes sense if you only sell a few items per month and want support from Amazon to help you get started. Beyond your store and catalog pages, Amazon will set shipping rates for all products on this account and determines what service levels you can offer buyers. One benefit for growing companies is that you don’t pay any fees to Amazon until you make a sale.

Individual plans also have some limitations on what they can sell, such as exclusions on jewelry, shoes, art, and other items.

If you’re selling more than 40 items per month, then upgrading to the Professional plan is generally a more intelligent move. That’s because the plan has no per-item fee and costs just $39.99 per month. Upgrading to this plan also allows you to use Amazon’s inventory feeds and reports, tools for order management, and Amazon’s sales API. You can also determine your own shipping rates, make promotion and gift offers, set featured offers, get assistance calculating sales, and use taxes on orders.

Perhaps most important to established businesses is that you have eligibility for winning the Buy Box and the ability to upload products in bulk. If you sell in multiple countries, Amazon does offer a discounted price on its subscription fees.

Sales Fees

When you make a sale on Amazon, you make some money and pay some fees. Generally, these are referral fees. However, sometimes you end up with additional costs. Let’s first look at referral fees.

Amazon’s referral fees occur at each sale because the company essentially acts as a referral service to send a customer to you. All Amazon sellers pay referral fees on everything sold on its platform. Referral fees vary significantly on your products, so it’s best to always look at the table the company provides.

Generally, referral fees range from 6% to 20% for the most common goods. Your average seller will pay around 15% for most of their sales. Clothing, accessories, jewelry, and art are your most common sectors with referral fees of up to 20%. If you’re selling accessories for Amazon’s devices, the referral fee jumps up to 45%.

Most products have a minimum referral fee of $0.30.

Amazon expects to update some fees in the coming months, but it's 2021 plan notes that most referral fees will not change. Thankfully, they plan to reduce the returns processing fee based on the growth of both sales and returns that sellers see across the board.

Additional sales fees

When thinking about sales, there are a few extra Amazon seller fees to note. Here is what you can expect for 2021:

• Rental book fees: Each textbook rental you sell will have a service fee of $5.

• Closing fees: Sellers will pay a $1.80 closing fee on the media they offer. This includes all kinds of media, from books and music to video games, consoles, and accessories.

• High-volume fee: Amazon charges a listing fee for high-volume SKU businesses. The fee is $0.001 per eligible SKU, but Amazon waves this fee for the first 1.5 million SKUs. This typically impacts few sellers.

• Refund administration: Amazon will charge you a fee of $5.00 or 20% of the applicable referral fee, whichever is less, for a refund. This fee only occurs if you’ve already received payment for the sale. The good news for your business is that Amazon will refund you the entire referral fee you paid at the time of the sale before taking this administrative cut.

Amazon Seller Fees for FBA

Amazon’s FBA, or Fulfillment by Amazon, service comes with its own set of fees. They’re generally the same types of fees you’ll see with any third-party logistics services, including fulfillment charges for your shipping and monthly storage. FBA fees vary for every company because they’re dependent on your specific products, shipping volume, and how much inventory you keep on hand.

Review your FBA agreement as well because some fees are related to optional services. For example, if you sell products that require an Amazon barcode, you can opt to have FBA add these with a per-unit expense. Or, if you use its multi-channel fulfillment services, there are associated fees, and the company plans to increase these later this year.

Your core FBA fulfillment fees will be getting a slight update in June 2021, so we’ve provided the latest details from Amazon below. The company also has a side-by-side comparison chart that you might find helpful as you track changes to your FBA fees.

Before June 1, 2021:

* Amazon charges an additional $0.11 per-unit fulfillment fee for lithium batteries and products that are sold with them.

June 1, 2021, and after

* Amazon charges an additional $0.11 per-unit fulfillment fee for lithium batteries and products that are sold with them. ** It’s worth noting that Amazon has split its lightweight categories from two to three options and introduced a new price point.

Apparel remains its own category when it comes to FBA. That means you get your own weight charts. These, too, will have price updates that kick in mid-2021. The pricing will change, but Amazon will no longer count packaging weight in what you pay. Here’s what the company says you can expect to pay before and after that shift.

Monthly storage costs

Amazon will charge you a cost each month for your inventory it holds when you use its FBA service. Fees will change based on your product sizes and the time of year. In January through September, standard-sized goods cost $0.75 per cubic foot while oversized products cost $0.48 per cubic foot. In October, November, and December, costs increase to $2.40 and $1.20 per cubic foot, respectively. It’s unclear if these are going to increase in the second half of 2021.

It’s worth noting that while standard goods have a higher rate, overall storage costs are likely to be higher for oversized goods because they’re charged by the cubic foot. If you ask Amazon to store any dangerous goods, you’ll pay a premium for their storage.

Amazon also charges long-term storage costs on top of any monthly storage fees. These costs occur after inventory has been in an Amazon facility for more than 365 days

Other Fees and Options to Consider

Selling on Amazon can be lucrative for many eCommerce companies, but your margins may also shrink with some other fees and costs you can experience. Depending on your business strategy and sales locations, these may or may not make sense for you.

Advertising on Amazon can be a significant help if you see a lot of traffic and interest in the marketplace. Ad campaigns have wildly different costs depending on the sponsored elements you use and how competitive your product keywords are.

Did you know?

Benchmark your advertising costs, ACoS, CPCs and more against your direct competitors in your category, marketplace and ad format. Try the free Benchmarker.

You may find some miscellaneous fees at times, such as being charged a service fee for repackaging your products. This tends to happen when someone returns a product, and the product’s packaging arrives in poor condition.

Fulfillment Alternatives

Amazon FBA has a variety of additional fees you may experience depending on your products. The service has its own labeling and packaging requirements. Labels are Amazon-specific so they create an expense whether you add them yourself or pay Amazon to do it. Packaging works the same way, where you need to package things very specifically for Amazon or can have the company do it. One note about packaging and labels is that Amazon will charge you fees if it needs to add a missing label or repackage your goods.

The company also requires you to send products to multiple warehouses. Or, it can do this for you at an added cost. If you want to send your goods to just one Amazon warehouse, you’ll pay an inventory placement service fee to get your inventory allocated across many locations. Fees are based on product size and weight.

You can avoid many of these added expenses by choosing to offer your own fulfillment. Amazon will want to verify that you’re able to ship to people as quickly as you list on sales pages but is otherwise relatively hands-off when you fill your own orders. This can help companies save by working with a 3PL specific to your needs and products. For example, working with companies specializing in shipping heavy goods like furniture can give you access to cheaper rates. These fulfillment companies negotiate with carriers for discounts because they consistently ship high volumes of those heavy goods.

There are some cost estimation tools in your Amazon dashboard. Review these and create an estimate for an average month’s expenses would be. Then, bring that to multiple fulfillment companies and see if they can offer you a better deal. Many companies can give you the same two-day shipping speed that Prime customers expect, allowing you to compete and hopefully keep a more significant portion of your margins.

Your Bottom Line

ECommerce sales in America are booming, and Amazon is a great facilitator. It can be a perfect marketplace for you to reach that hungry audience. This alone makes the majority of Amazon’s costs worth the price of doing business. However, eCommerce companies can protect themselves by looking at their options and ensuring products and packaging meet requirements ahead of sending things to Amazon.

There’s plenty of opportunity for your store on Amazon, and understanding the fees is a smart way to protect your margins and bottom line as you vie for sales.