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A guide to Amazon Seller Fees (and how to reduce them)

With its 150 million unique monthly visitors, Amazon is a popular choice for online sellers looking to expand their brand and increase their sales. However, growing your profits using Amazon requires an understanding of how much it costs to sell on Amazon, and what you can do to reduce that cost. This guide to Amazon seller fees explains it all, from the cost of listing on Amazon to reducing your Amazon fulfillment costs.

Amazon fees explained

It should come as no surprise that it costs to sell on Amazon in the same way that it costs to sell on Walmart or eBay. You’re paying Amazon for their platform, tools, marketing, and, most importantly, their captive audience.

Amazon sellers pay have 4 main costs for access to the marketplace:

Account fee

Your first cost is the Amazon account fee – a monthly fee that you pay for selling on Amazon. Amazon has two different seller accounts, with two different fee structures:

 Amazon IndividualAmazon Professional
Monthly feeFree$39.99
Listings40 per monthUnlimited
Categories supported20+20 and have access to an additional 10

As you can see, Amazon Individual comes with no monthly fee, but you are restricted to only 40 listings per month and 20 categories. Amazon Professional comes with a $39.99 monthly price tag but unlimited listings and more categories.

Sales fee

The next cost is the sales fee. Amazon charges you for items sold, specifically a per-item fee, a referral percentage (depending on the item category), a closing fee for media items, and a high-volume listing fee.

FeeAmazon IndividualAmazon Professional
Per-item fee$0.99 per item soldNone
Referral fee6-45% of the selling price (depending on item category)6-45% of the selling price (depending on item category)
Closing fee (for media items only)$1.80 per item$1.80 per item
High-volume listing fee$0.005 on items over 100,000$0.005 on items over 100,000

Fulfillment costs

The next considerable, but often overlooked, expense if your fulfillment costs. You can fulfill Amazon orders in one of three ways:

1. Self fulfillment

With Amazon self fulfillment, you fulfill orders yourself – picking, packing, and shipping. Associated costs include:

  • Warehousing (including insurance and security);
  • Staffing;
  • Packaging; and
  • Shipping.

2. Fulfillment by Amazon

Those opting for fulfillment by Amazon (FBA) hand over their items, picking, packing, and shipping to an Amazon warehouse. FBA costs include:

  • Shipment to Amazon’s warehouse;
  • A per-item fee, depending on item size (from $2.41 to $137.32); and
  • A monthly storage fee, depending on the season (from $0.69 to $2.40 per cubic foot).

If you’re shipping all of your stock to Amazon, including items you sell on other marketplaces, you also pay a multi-channel FBA premium to ship non-Amazon orders.

3. Outsourced fulfillment

An alternative fulfillment option is using an outsourced fulfillment partner such as Deliverr. With Deliverr, you pay two simple fees:

  • Fulfillment fee (shipping, picking, and packing); and
  • Storage fee.

Those two all-inclusive fees make it simple for sellers to predict their fulfillment costs at the onset, so they can see profit margins and project long-term revenue.

Tip: Use our fulfillment cost calculator to get an idea of what you would spend on fulfillment.

Other expenses

With Amazon being such a competitive marketplace, it’s important to consider the additional expenses required to get your listings visited and clicked on. This includes:

How to reduce Amazon seller fees

Despite sometime steep prices, being on Amazon can bring you more exposure, more customers and more sales.

Amazon can be an expensive marketplace to sell on, but by reducing your Amazon fees as much as you can, it is possible to increase your eCommerce profits dramatically. Here’s how:

Opt for a Professional seller account

Amazon Individual’s zero monthly fee sounds attractive, but if you’re listing more than 40 items per month or paying more than $39.99 in per-item fees, it’s not the cheapest option.

Switch to an Amazon Professional account to receive unlimited listings and zero per-item fees. You’ll immediately save money and have access to additional conversion-increasing benefits including the ability to run promotions, sell on different Amazon sites, and access the buy box.

Reduce referral fees

While you can’t reduce the Amazon referral fees themselves, you can be strategic about which items you sell on Amazon. Use Amazon for products that have a low referral fee and use different marketplaces (such as Walmart or eBay) for items that have higher referral fees.

Reduce shipping fees

Shipping costs can be expensive, especially when fulfilling in-house or via FBA. They can also be easily reduced by:

  • Using unbranded packaging to reduce packaging costs (with the added benefit of increasing shipping speed);
  • Using a fulfillment calculator to see if an outsourced fulfillment provider is cheaper; and
  • Partnering with an outsourced fulfillment provider to reduce shipping carrier costs (as well as taking advantage of their inventory management technology).

Increase your ROI

Increasing your ROI doesn’t directly reduce your Amazon fees, but it ensures that Amazon’s fees make less of a dent in your profits. Increase your ROI by:

  • Competing on service, not price, by offering great customer service and a seamless purchasing experience
  • Improving your conversion rates by getting on Amazon Prime, catering for those online shoppers who favor speed

Increase your visibility

If you’re paying to appear on Amazon, you want to be seen. Improve the visibility of your listings by:

  • Offering fast and free shipping options, to appear in filtered search results
  • Optimizing your Amazon listings, including product titles and descriptions
  • Getting five-star customer ratings by responding to issues quickly, providing accurate tracking information, and delivering on-time

Conclusion

There’s no doubt about it – selling on Amazon puts you on stage in front of millions of buyers with the potential to take your eCommerce business to the next level. To ensure that your profits don’t take a hit in the meantime, be savvy about what you’re paying to Amazon and how you can reduce your costs through conversions, fulfillment, and visibility.

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