Before adding another channel to your multichannel selling strategy, it’s always wise to dissect the true cost of selling on that marketplace first. Without doing your due diligence, you may wind up with a serious case of sticker shock.
There’s no denying the power of Amazon. Today, every two out of three U.S. consumers shop on Amazon—and 57% make purchases weekly or more—according to Jungle Scout.
This article will walk you through the numbers, starting with Amazon’s fee structure and ending with tips on how to reduce your costs.
Mandatory Amazon fees
Account fees: cost varies
When learning how to sell on Amazon, the first step is to select a plan. You can choose from one of two seller plans.
Individual plan ($0.99 per item sold): Only for merchants who sell fewer than 40 items a month. You may choose this if you’re just looking to test the waters and sell one or two key products to begin with. However, you won’t benefit from the same reach or efficiencies as you would with a Professional plan.
Professional plan ($39.99 per month): Best for any serious merchant looking to sell on Amazon. By signing up for the Professional plan, you become eligible for the Buy Box, plus gain access to many tools within Seller Central. Note: you can drop down to an individual plan at any time.
With the Individual plan, you won’t pay a monthly fee. However, you will pay Amazon $0.99 (USD) for every unit you sell. So, if you sell 200 units on Amazon, you’ll pay $198 (200 x $0.99) back to Amazon.
With a Professional plan, you’ll pay $39.99 per month no matter how many units you sell. You also get access to many premium features, including sponsored ads, sales analytics reports, and essential inventory and listing tools.
For both, you’ll be subject to additional selling fees as noted below.
Referral fees: 8% - 15% on average
You don’t get access to Amazon’s gigantic audience for free. Each time you sell an item on Amazon, you pay a referral fee. Think of it as a commission that you pay to Amazon for the privilege of selling to its customers.
Referral fees are charged as a percentage of an item’s total sales price (TSP), which includes the item price, shipping cost, and any gift-wrapping charges. Referral fees vary by category and generally range between 8% to 15%.
A few examples:
Automotive and powersports - 12%
Backpacks/handbags/luggage - 15%
Clothing and accessories - 17%
Footwear - 15%
Home and Kitchen - 15%
Pet supplies - 25%
Toys and games - 15%
While most referral fees are flat percentages, some categories (like baby products, beauty products, and grocery items) take a tiered approach based on an item’s TSP. For instance, a baby product with a TSP of $10 or less is subject to an 8% referral fee, while a baby product with a TSP of $10 or more is subject to a 15% referral fee.
The opposite is true for categories such as appliances, collectibles, electronic accessories, fine art, furniture, and jewelry. For furniture, you’ll pay a 15% referral fee for products with a TSP up to $200. But that fee goes down to 10% for furniture products with a TSP greater than $200.
All categories also carry a minimum referral fee. It’s most often $0.30 but may run higher. View the full list of referral fees by category here.
An intro to how fulfillment works on Amazon
When it comes to fulfillment on Amazon, you get two choices:
Fulfillment by Amazon (FBA): Amazon will store your products in their fulfillment centers and pick, pack, and ship them for you. Amazon will also handle customer service and returns.
Fulfillment by Merchant (FBM): You store, pack, label, and ship your products on your own.
FBA is the most popular choice by far. According to Jungle Scout, 92% of Amazon sellers use Amazon FBA to ship at least some of their products, with 57% choosing an FBA-only approach. Only 9% of sellers use FBM alone.
The primary reason: FBA products gain the highly coveted “Prime” status on their listings. This gives you a major competitive advantage in terms of ranking or winning the Buy Box; you can offer expedited shipping on your products and reach Amazon’s estimated 163.5 million Prime users. However, because Amazon does the work for you, you will be subject to multiple fees.
Amazon FBA fulfillment fees: cost varies
For any items enrolled in FBA, you pay a fee for each one that Amazon ships to a customer. Fees are based on the size and weight of each package that gets sent.
Amazon FBA fees fall into two broad categories: non-apparel and apparel. Within these, most packages will fall within the “small standard” and “large standard” size tiers.
Small standard (non-apparel)
This includes any non-apparel item with a maximum dimension of 15” x 12” x 0.75”. Fees are charged by weight.
6 oz or less: $2.92/unit
6+ to 12 oz: $3.07/unit
12+ to 16 oz: $3.59/unit
Large standard (non-apparel)
This includes any non-apparel item with a maximum dimension of 18” x 14” x 8”.
6 oz or less: $3.54/unit
6+ to 12 oz: $3.77/unit
12+ to 16 oz: $4.52/unit
1+ to 2 lbs: $5.14/unit
2+ to 3 lbs: $5.79/unit
3+ to 20 lbs: $6.13/unit + $0.30/lb above 3 lbs
Apparel shipments follow the same size and weight requirements. However, apparel fees generally run $0.30 to $0.50 more per order than non-apparel fees.
Small standard (apparel)
This includes apparel items with a maximum dimension of 15” x 12” x 0.75”.
6 oz or less: $3.27/unit
6+ to 12 oz: $3.43/unit
12+ to 16 oz: $3.95/unit
Large standard (apparel)
This includes apparel items with a maximum dimension of 18” x 14” x 8”.
6 oz or less: $4.22/unit
6+ to 12 oz: $4.40/unit
12+ to 16 oz: $5.07/unit
1+ to 2 lbs: $5.81/unit
2+ to 3 lbs: $6.50/unit
3+ to 20 lbs: $6.68/unit + $0.30/lb above 3 lbs
Inflation-related surcharges
Since April 2022, Amazon FBA has required a 5% Fuel and Inflation Surcharge in addition to normal fulfillment fees.
Between October 15, 2022 to January 14, 2023, Amazon is also requiring a $0.35 surcharge per every item sold in the U.S. or Canada.
Amazon FBA inventory storage fees: starting at $0.75/cubic foot
In addition to fulfillment fees, Amazon will charge you a monthly storage fee based on the space your inventory occupies inside their fulfillment centers. This fee will typically be higher during the holiday season, when demand for storage (and FBA shipping services) is highest.
Rates factor in your product type, size tier, average number of units stored, product volume (in its fully packaged condition), and “dangerous goods” classification as well.
January through September
$0.83/cubic foot (standard size)
$0.53/cubic foot (oversize)
October through December
$2.40/cubic foot (standard)
$1.20/cubic foot (oversize)
Other FBA fees to be aware of
Perhaps one of the biggest knocks against Amazon FBA is the number of other potential fees you could be paying. These fees could be triggered by various situations, such as if your products aren’t properly prepped for Amazon’s fulfillment centers. Here is a sample of other fees to be aware of:
Long-term storage fees: To prevent a pileup of dead stock, Amazon applies a long-term inventory fee if your inventory sits in a fulfillment center for nine months or longer. This fee starts at $1.50/cubic foot for items stored between 271 to 365 days, then increases to $6.90/cubic foot (or $0.15 per unit, whichever is greater) for inventory stored after the first year.
Returns processing: If a customer returns an item you sold on Amazon that offers free return shipping, you’re responsible for covering the cost. This applies to items within the Apparel and Shoes categories. Fees range from $2.12 to $3.41 for most items but may go higher for oversized items. Get a full fee schedule here.
FBA removal order: This fee is charged for each unit you request to remove from an Amazon fulfillment center and have inventory sent back to you. For example, you may submit a removal order if your products aren’t selling and you want to avoid paying long-term storage fees. Removal fees range from $0.52 to $1.51 per unit for standard size items.
FBA disposal order: If, alternatively, you’d like to request Amazon to destroy your items instead of shipping them back to you, you’ll have to budget $0.52 to $1.51 per unit disposed (for standard sized items).
Unplanned services: Unplanned services fees kick in if you fail to prep your FBA shipments according to FBA’s Packaging and Prep requirements or Shipping and Routing requirements. Fees depend on the type of service provided. For example, if Amazon needs to re-label your products, you’ll be charged $0.20 per unit for standard sized items. View the full rate sheet here.
MCF orders: FBA offers its services for non-Amazon orders under the Multi-Channel Fulfillment program. In other words, if you’d like Amazon to fulfill orders that you receive from your online store, you can do so. However, you’ll have to pay higher fulfillment fees than you would for a non-Amazon order. MCF fulfillment fees start at $5.35/unit for small standard items, and $8.57/unit for large standard items. View all MCF rates here. (Note that some marketplaces like Walmart Marketplace expressly forbid the use of Amazon FBA.)
Amazon FBM fees
If you’re a Professional Amazon seller, you can set your own shipping rates (except for products in the media category) and cover the cost of shipping in your product price.
However, sellers with an Individual plan must use Amazon’s set shipping rates for all products. For instance, if you sell a book to a customer, the customer will be charged $3.99 (per Amazon’s rate sheet) for domestic standard shipping. If shipping ends up costing more than $3.99, you’ll have to cover the difference.
Optional and additional Amazon selling fees
Amazon Ads: cost varies
Amazon Ads are a hot commodity these days, with nearly two-thirds of sellers using Sponsored Product Ads to promote their items. You, too, can take advantage of paid ad placements on Amazon. These ads are pay-per-click (PPC), meaning you only pay when someone clicks on your ad. The exact fee amount depends on the keyword you’re bidding on and your daily budget.
Premium account services: $1,600 per month + 0.3% of total monthly sales
Amazon offers a Strategic Account Services (SAS) Core program that connects you with an account manager, who can provide personalized tips on how to scale your business on the marketplace. As a SAS Core member, you get early access to new or beta programs, alongside tactical support. SAS Core costs $1,600 per month, plus 0.3% of your total monthly sales up until $5,000.
Rental book listing fee: $5 per rental
If you choose to rent out textbooks on Amazon, you will have to pay a rental book service fee of $5 per rental.
High-volume listing fee: $0.005 per listing
For any non-media listings, if you have a large amount of active listings that haven’t sold in the past 12 months, you will have to pay Amazon a monthly fee of $0.005 per eligible listing to cover cataloging costs. This fee is waived for the first 100,000 listings.
Refund administration fee: $5 or 20% of referral fee (whichever is less)
When you refund a customer for an order that they’ve already paid for, Amazon will refund your referral fee minus the refund administration fee, which is either $5 or 20% of the referral fee (whichever is less). So, if you refund a customer the price of your product ($10) in a category with a 15% referral fee, your refund administration fee will be $0.30 ($10 x 0.15 = $1.50).
An example of an Amazon bill
How does the cost to sell on Amazon stack up against, say, the cost of selling on Etsy or another third-party marketplace? Here’s a rundown.
Let’s say you’re a Professional Plan seller using Amazon FBA. You’re selling felt letter boards for kids that measure 10 inches by 10 inches (when packaged) and weigh 0.5 pounds. The boards cost you $5 to make, and you sell them on Amazon for $20 under the Toys & Games category. So, your customer pays $25 for a board, gets fast and free shipping (a la Prime), and pays $1.50 in tax, bringing their TSP to $26.50.
At the end of the transaction, your bill will look something like this:
Description | Amount |
|---|---|
Item price | $25 |
Referral fee (15%) | -$3.75 |
FBA fulfillment fee (flat rate) | -$3.07 |
Cost to ship to Amazon | -$0.30 |
FBA storage cost (Jan - Sept) | -$0.01 |
Cost of goods sold (COGS) | -$5.00 |
Net profit from sale | $12.87 (51.48%) |
You can use Amazon’s revenue calculator to calculate your own costs.
3 ways to save on your Amazon selling fees
01. Join the Brand Referral Bonus Program
If you’re a brand owner, make sure to join Amazon’s Brand Registry. Among the many perks of enrolling yourself in the registry, you can earn a bonus on any sales made through non-Amazon marketing efforts. Here’s how the Brand Referral Bonus Program works: You embed an Amazon-provided link to any non-Amazon marketing assets. If a customer clicks on that link and makes a purchase from you within 14 days, you’ll earn, on average, 10% back on your referral fee. The exact bonus rate depends on your product category and the number of sales generated.
02. Join the Small and Light Program
If you sell small products that weigh less than three pounds—and price them for $10 or less—then the FBA Small and Light Program may be for you. This will land you reduced shipping rates on qualified products. For example, a small standard item could cost as little as $2.35 to ship, as opposed to the usual $2.92 with regular FBA.
03. Watch your inventory levels
One of the best ways to avoid long-term storage fees or other inventory mishaps is by having a reliable system for tracking, forecasting, and managing inventory. If your online store is powered by Wix eCommerce, you can use built-in inventory management tools to automatically and accurately sync inventory across all of your sales channels.
The bottom line: know the money coming in and out of Amazon
Amazon can be a great addition to your channel mix, but as with every third-party marketplace, it comes at a price. On Amazon you face:
Tighter margins
Fluctuating fees
Lots of competition, especially around price
Less control over your branding
Read Also: How to start a business
Our top tip: stay on top of your costs and treat Amazon as a supplement to your online store, where you retain total control over your fees and user experience. Start an online store with a hassle-free platform like Wix eCommerce, and take advantage of all its built-in tools for catalog management, inventory management, price management, SEO, and more. Keep in mind that there are fees no matter where you sell, whether you're selling on eBay or selling on Facebook Marketplace.
Learn more about Wix eCommerce today.