Amazon selling fees are quite low when you take into account the fact that as sellers we use their platform, leverage their trust and credibility, and make use of their registered customer base of close to 3 million shoppers.
Shoppers on Amazon tend to be prepared to pay a little more for items than they would on say, Ebay for example. Therefore we can set our prices that little bit higher, which helps to offset some of the fees.
That being said, we still need to know what these fees are so that we can work out whether or not it’s possible to make a profit on an item we want to sell. Sometimes new sellers simply look at the wholesale cost of an item, compare it to the selling price on Amazon, and think they can make a great profit. They completely overlook the fact that Amazon needs to make money too!
Amazon Referral Fee
This is a percentage of the selling price of each item sold on Amazon and it’s usually 15%, although there are some categories where this percentage is a little higher or a little lower. Generally though, you can expect your referral fee to be 15%.
For example. If you were selling a dog lead for $22.99, Amazon would take $3.45 (15%) from each sale.
This only applies if you are using ‘Fulfillment by Amazon’,. This is where Amazon stores your items at their warehouse and then ships them out to customers as your orders come in. It’s a great service because it takes away the headache of packing and shipping out orders.
For most items this fee is around $2.60 If the item is large and bulky, it will be a little more than this and if your item is classed as ‘small and light’, it will be less.
If you are not using FBA, this fee does not apply.
Both the Referral Fees and the FBA fees are taken from your earnings. You don’t need to pay either of these fees from your own pocket.
FBA Long-Term Storage Fees
Again, this only applies if you are using Fulfillment by Amazon and these fees don’t kick in unless you have stock at the FBA warehouses for longer than 6 months. Meaning, your stock is slow selling. There are ways to avoid this happening, but if it does happen, then you need to factor in around $0.55 per item per month
Professional Seller Account Fee
As an seller, you can either open an ‘Individual Account’ or a ‘Professional Account’
There is no monthly fee for an Individual Account, but you will pay Amazon $0.99 per item sold in addition to the costs listed above
The Professional Account has a monthly fee of $39.99 (first month is free), but you do not pay the $0.99 per item sold.
Generally, if you intend to sell more than 40 items a month – which hopefully you do – then the Professional Account is the one to go for.
Even when factoring in the fees, there’s good money to made as a seller on Amazon providing you do your calculations first. Of course there’s more to it than just making sure you can turn a profit. You also need to know how to choose the right items to sell, where to get them, how to create listings that convert to sales and more. Even so, Amazon is still a great place to sell. New sellers can still make their mark and it doesn’t require a big start up budget either 😉