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Selling on Amazon - How much does it cost?



If you're considering selling on Amazon, it's important to understand the various fees associated with being a seller on the platform.


While Amazon provides a massive customer base and numerous benefits, it's crucial to be aware of the costs involved.


In this comprehensive guide, we'll break down the different types of Amazon seller fees and provide you with the information you need to navigate the world of selling on Amazon in 2023.


Let's start.


1. Monthly Subscription Fees

When you first sign up as an Amazon seller, you'll have the option to choose between a Professional or Individual account. The type of account you choose will have an impact on the fees you pay.


The Professional seller account costs $39.99 per month and comes with several benefits, including no per-item fee for products sold, inventory management tools, order management capabilities, the ability to use Amazon Marketplace Web Service for API functions, and more. This plan is suitable for sellers who expect to sell more than 40 items per month.


On the other hand, the Individual seller plan charges a fee of $0.99 per item sold, making it more suitable for sellers who anticipate selling fewer than 40 items each month. However, this plan has limitations, such as set shipping rates, manual listing uploads, and exclusions from selling in certain categories.


2. Sale-Related Fees

When you make a sale on Amazon, you'll encounter various sale-related fees. Understanding these fees is crucial for accurate pricing and profit calculations.


Referral Fees

Referral fees are essentially commissions paid to Amazon for each product sold on their marketplace. The referral fee is typically a percentage of the sale price, but it can vary depending on the category of the item. For most categories, the referral fee is around 15%, but it can be higher or lower in specific categories.


Variable Closing Fees

If you sell products in the Media category, such as books, DVDs, or video games, you'll also incur a variable closing fee. This fee is an additional referral fee specific to media items and is currently set at $1.80 per item.


Refund Administration Fee

In the event of a customer return, you may be subject to a refund administration fee. This fee is either $5.00 or 20% of the applicable referral fee, whichever is lower. It's important to account for this fee when calculating your potential profit margins.


3. FBA Fees

If you choose to utilize Amazon's FBA (Fulfillment by Amazon) service, there are additional fees to consider.


Order Fulfillment Fees

FBA order fulfillment fees are based on the size and weight of your products. Larger and heavier items incur higher fees, while smaller and lighter items have lower fees. For example, items weighing 10 ounces or less have a fulfillment fee of $2.41, while large oversize items (up to 151 pounds) carry a fee of $75.78 plus $0.79 per pound.


Monthly Storage Fees

Since Amazon provides warehousing services for your inventory, there are monthly storage fees associated with using their facilities. From January to September, the storage fee is $0.69 per cubic foot, while from October to December, it increases to $2.40 per cubic foot. However, oversize items have a reduced storage fee of $0.48 per cubic foot from January to September, and $1.20 per cubic foot from October to December.


Long-Term Storage Fees

If your inventory remains in Amazon's fulfillment centers for more than six months or twelve months, you may be subject to long-term storage fees. These fees are calculated twice a year (on February 15th and August 15th) and are charged for items that have been stored for an extended period.


4. FBM Fees

For sellers who choose to fulfill their orders themselves through FBM (Fulfilled by Merchant), there are different fees to consider.


FBM sellers using the Individual selling plan must adhere to Amazon's set shipping rates, even if the shipping credit provided by Amazon is less than the actual shipping cost. This means careful pricing and repricing strategies are essential to avoid losses.


FBM sellers using the Professional selling plan, however, have more flexibility in setting their own shipping rates, except for those selling in specific categories like BMVD (Books, Music, Videos & DVDs).


5. Miscellaneous Fees

In addition to the aforementioned fees, there are several miscellaneous fees that sellers should be aware of:

  • High-Volume Listing Fee: If you have more than 100,000 listed products, a monthly flat fee of $0.005 per eligible item is charged, in addition to your FBA storage fees.

  • Dangerous Item Fee: Certain items, excluding clothes, incur an additional FBA fee ranging from $0.06 to $0.16 per unit for standard sizes. For dangerous item-clothes, the fee increases slightly to $0.08 to $0.29 per unit.

  • Textbook Rental Fee: Sellers offering textbook rentals are charged a fee of $5.00 for each rental at the time of the sale.

  • Repackaging Fee: If a buyer returns an item without the original packaging or in a different box, Amazon may charge a fee to repackage it.

  • Fulfillment Preparation Fee: FBA sellers can opt for Amazon to handle the preparation and labeling of their products. This service incurs a fee ranging from $0.50 to $2.20 per unit, depending on size. Multi-channel fulfillment sellers can also request custom packing slips for $0.07 per box or have Amazon apply barcodes for $0.30 per unit.

By understanding these miscellaneous fees, you can accurately account for any additional costs that may arise.


Conclusion

Selling on Amazon offers tremendous opportunities, but it's essential to be aware of the various fees involved. From monthly subscription fees to sale-related fees, FBA fees, FBM fees, and miscellaneous fees, understanding the costs associated with selling on Amazon is crucial for setting prices, calculating profits, and making informed business decisions. By considering these fees and incorporating them into your overall selling strategy, you can maximize your success as an Amazon seller.


Remember, staying informed about Amazon seller fees is an ongoing process, as fees may change over time. Be sure to stay up to date with the latest fee structures provided by Amazon to ensure accurate financial planning for your business.


Now that you have a good understanding of Amazon seller fees, you're equipped to navigate the world of selling on Amazon and make informed decisions for your business.


Happy selling!

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