Introduction:
When new entrepreneurs delve into the realm of selling on Amazon, a common inquiry arises: “What are the expenses associated with selling on Amazon?”
Certainly, when venturing onto the largest e-commerce platform globally, ensuring profitability is paramount.
This piece examines the various fees incurred by Amazon sellers, categorizing them into four distinct sections:
- All Amazon seller fees
- FBA seller fees
- FBM seller fees
- Miscellaneous, optional service fees
Moreover, if you require assistance in calculating these fees, feel free to utilize our complimentary Amazon FBA fees calculator provided below. It serves as a valuable tool in assessing the viability of selling a particular product on Amazon.
Fees Mandatory for All Amazon Sellers Regardless
whether you operate as an FBA or FBM seller, these are the essential Amazon seller fees you must settle to initiate your selling journey.
Please refer below for detailed insights into all the revisions slated for 2024:
- 2023 Holiday Peak FBA Fulfillment Fee
- Adjustments to 2024 FBA Fulfillment Fees
- 2024 Amendments to US Referral and FBA Fees
- Alterations to 2024 FBA Monthly Storage Fees and Aged Inventory Surcharges
- Modifications to 2024 FBA New Selection Program
- Amendments to 2024 FBA Fees for Removals, Disposals, and Manual Processing Fees
Referral Fees
Referral fees represent the commission paid to Amazon for each item sold through their platform. Typically, these fees are a fixed percentage, often 15% or less.
However, you are not required to pay these fees upfront. Instead, Amazon deducts referral fees from your account after the sale is completed.
2024 Referral Fee Update: Commencing January 15, 2024, Amazon will decrease referral fees for apparel products priced below $20. For items priced under $15, referral fees will be reduced from 17% to 5%. For products priced between $15 and $20, referral fees will be decreased from 17% to 10%.
Individual Per-Item Fees or Subscription Fees
Amazon offers two types of seller accounts: individual and professional. Depending on the type of seller account you possess, you will encounter either the individual per-item fee charged by Amazon for each sales transaction or a monthly subscription fee.
Individual Seller Per-Item Fee
Individual sellers are subject to a fixed fee of $0.99 for each sales transaction, in lieu of a monthly subscription fee. Similar to referral fees, these charges are deducted post-sale on Amazon and withdrawn from your Amazon account balance. Payment is not required upfront.
Professional Seller Subscription Fee In contrast,
professional sellers opt for a monthly subscription fee of $39.99 instead of paying per product sold. Comparable to individual seller fees, subscription charges are deducted from your Amazon account balance. In case of insufficient funds in your account, the amount is billed to your credit card.
Refund Administration Fees
When a customer requests a refund for a product for which you have already received payment, and Amazon processes the refund, a fee is levied for administration. This fee is either $5.00 or 20% of the refunded charge, whichever is lower. Similar to other fees mentioned, refund administration fees are promptly settled through your Amazon account balance or charged to your credit card if the account lacks funds.
Fees Exclusive to FBA Sellers
For FBA sellers, specific charges apply on Amazon.
FBA Fees
As an FBA seller, you are relieved of the responsibility of shipping, handling, or packaging your goods. Instead, Amazon’s fulfillment staff takes care of picking, packing, and shipping your products. To offset these expenses, you incur Amazon seller fees, calculated based on the size and weight of your product.
Commencing February 5, 2024, Amazon will introduce new, more detailed rate cards for standard-sized products, including the introduction of large bulky and extra-large size tiers. Subsequently, starting April 15, 2024, FBA fulfillment fee rates will be reduced for standard-sized and large bulky-sized products. The chart below delineates the new rates and size tiers effective February 5, 2024, along with the revised rates commencing April 15, 2024.
FBA Storage Charges
Given that your merchandise is housed within Amazon’s fulfillment centers, Amazon imposes storage fees to uphold your inventory.
Two varieties of FBA storage fees exist: monthly and long-term.
2024 Revisions: As per Amazon, “Effective April 1, 2024, off-peak monthly inventory storage fees (January-September) for standard-size products will decrease by $0.09 per cubic foot. This alteration will initially reflect in May 2024 charges for storage accrued in April 2024. There will be no adjustments to off-peak monthly inventory storage fees for large bulky or extra-large (previously termed oversized) products, nor to peak monthly inventory storage fees for standard-size, large bulky, and extra-large products.”
Monthly Storage Charges
Should you possess inventory stored in an Amazon warehouse at the conclusion of a month, Amazon imposes a monthly storage fee. These fees are either deducted from your account balance or charged to your credit card if your Amazon account lacks adequate funds to cover the fee.
Amazon conducts inventory clean-ups every 15th of the month. During this process, Amazon identifies any products that have remained in their fulfillment centers for 181 days or more.
For items stored beyond 181 days, Amazon imposes an aged inventory surcharge on the seller, determined by the age of the stored products.
Similar to monthly storage fees, the aged inventory surcharge is deducted on the 15th of each month from your Amazon seller account balance or the credit card provided during your registration as an Amazon seller.
New Low-Level Inventory Charge Starting April 1, 2024, Amazon will introduce a novel low-level inventory fee targeting standard-sized products with consistently low inventory relative to customer demand.
As stated by Amazon, “When sellers maintain insufficient inventory relative to unit sales, it impedes our ability to efficiently distribute products throughout our network, resulting in slower delivery speeds and increased shipping expenses.
The low-inventory-level fee will solely be applicable if a product’s inventory levels, in relation to historical demand (referred to as historical days of supply), fall below 28 days. We will only levy the low-inventory-level fee when both the long-term historical days of supply (last 90 days) and short-term historical days of supply (last 30 days) are below 28 days (equivalent to 4 weeks). For instance, if a product’s short-term historical days of supply exceed 28 days while the long-term historical days of supply are below 28 days, the low-inventory-level fee will not be imposed.
We will compute the historical days of supply metric at the parent-product level, and the low-inventory-level fee will be added to the FBA fulfillment fee for all shipped units of eligible products. Below is the low-inventory-level fee rate card.”
FBA Inbound Placement Service Charge
Starting March 1, 2024, Amazon will introduce an FBA inbound placement service fee applicable to standard and large bulky-sized products. This fee aims to cover the expenses associated with distributing inventory to fulfillment centers in proximity to customers.
Exclusive Fees for FBM Sellers
FBM (Fulfilled by Merchant) sellers do not have distinct fees akin to FBA (Fulfilled by Amazon) sellers. Nevertheless, the expenses associated with selling on Amazon as an FBM seller often surpass those of an FBA seller. This is because FBM sellers are responsible for storing, selecting, packaging, and shipping their own products, in addition to managing their customer service.
For instance, if I were to vend a stainless steel mug as an FBA seller for $30, I would incur $4.50 in referral fees and $5.06 in FBA fees.
However, if I were to market the same product as an FBM seller, I would need to consider shipping expenses (estimated at $6) and packaging costs (estimated at $1), resulting in a total fulfillment cost of approximately $7 (excluding any labor or storage charges).
Additional Service Charges
The final category of fees outlined in this article encompasses charges applicable to only a select group of sellers, irrespective of whether they operate as Amazon FBA or FBM merchants.
Closing Fees
For media products such as books, DVDs, CDs, and Blu-Rays, there exists a fixed $1.80 fee per sale, which concerns sellers primarily focused on vending these items. Similar to referral fees, closing fees are subtracted from the sales proceeds, eliminating the need for upfront payment.
High-Volume Listing Fee
Sellers managing thousands of ASINs may encounter a monthly flat fee of $0.005 per eligible ASIN. However, unless you have over 100,000 products listed, these fees need not be a concern. High-volume listing fees coincide with FBA storage fee payments and are deducted from your Amazon account balance. In the absence of sufficient funds in your account, the amount is charged to your credit card.
Rental Book Service Fees
Merchants engaging in textbook rentals on Amazon are subject to a $5.00 rental book service fee for each textbook rental transaction. Similar to referral fees, rental book service fees are deducted upon sale, eliminating the necessity for advance payment.