One of the biggest mistakes Amazon sellers can make is guess how much their Amazon fees will be. There are multiple, pricey fees that if not calculated beforehand, will put a dent in your profits. With that in mind, let’s break down the costs of account, sales, and fulfillment fees, get advice from Amazon experts, and answer that burning question on your mind: “Is it worth selling on Amazon?”.
Account Fees
When you first sign up to sell on Amazon, you choose a selling plan. Keep in mind that you don’t have to stick with the same plan forever. You can easily switch between subscriptions when it’s more efficient and/or helps you save money.
Professional
Amazon’s Professional Selling Plan works best for big-volume sellers. So, if you plan on selling more than 40 units a month and need spreadsheets, reports, and management systems to help run things, this is the right account for you.
Individual
Amazon’s Individual Selling Plan is a pay-as-you-go option. Instead of a monthly fee, Amazon charges you $0.99 per item sold, which makes more sense for those that would overpay with the monthly subscription fee.
- $39.99 monthly fee
- No monthly fee
- No per-item fee
- $0.99 per-item fee
- Can create new listings
- Can create new listings
- Can access Amazon Marketplace Web Service
- Can’t access Amazon Marketplace Web Service
- Can access inventory and order management spreadsheets, feeds, and reports
- Can’t access inventory and order management spreadsheets, feeds, and reports
- Has seller-set shipping rates for non-media
- Has Amazon-set shipping rates
- Can add gift services, promotions, or any other special listing features
- Can’t add gift services, promotions, or any other special listing features
- Eligible for Feature Offer
- Not eligible for Feature Offer
Professional
Amazon’s Professional Selling Plan works best for big-volume sellers. So, if you plan on selling more than 40 units a month and need spreadsheets, reports, and management systems to help run things, this is the right account for you.
- $39.99 monthly fee
- No per-item fee
- Can create new listings
- Can access Amazon Marketplace Web Service
- Can access inventory and order management spreadsheets, feeds, and reports
- Has seller-set shipping rates for non-media
- Can add gift services, promotions, or any other special listing features
- Eligible for Feature Offer
Individual
Amazon’s Individual Selling Plan is a pay-as-you-go option. Instead of a monthly fee, Amazon charges you $0.99 per item sold, which makes more sense for those that would overpay with the monthly subscription fee.
- No monthly fee
- 0.99 per-item fee
- Can’t access Amazon Marketplace Web Service
- Can access Amazon Marketplace Web Service
- Can’t access inventory and order management spreadsheets, feeds, and reports
- Has Amazon-set shipping rates
- Can’t add gift services, promotions, or any other special listing features
- Not eligible for Feature Offer
Sales Fees
Amazon’s platform can put your product in front of millions of users, but these customers don’t come cheap. Amazon asks you to pay a “commission” for the sales they help you get.
Referral Fees
Typically referral fee percentages are 15% or lower, however, the percentage could be anywhere from 5% to 45% based on the category the listing falls under. For example, Amazon’s referral rates chart says if you sell a product under the Device Accessories category, your referral fee is 45% per unit sold.
About half of the categories have a referral fee percentage that changes depending on the price you set for your listing. For example, if you sell fine art, the referral fee will be 20% for paintings priced below $100.00; 15% for paintings between $100.00 to $1,000; 10% for paintings priced between $1,000.00 and $5,000; and 5% for paintings priced greater than $5,000.00.
Applicable Minimum Referral Fee
Amazon will keep you on your toes with the applicable minimum referral fee. This fee means that your referral fee is raised to $0.30 if the fee percentage is lower than that. It doesn’t apply to a few items though, such as the collectible card products under the Toys & Games category.
Variable Closing Fee
If you want to sell media products, expect to fork out an additional $1.80 per unit sold. Here are the products that have this fee:
- Books
- DVD
- Music
- Software & Computer/Video Games
- Video Game Consoles
- Video Game Accessories
FBA Fees
Fulfillment by Amazon (FBA) is an option that sellers can choose where Amazon does all of their fulfillment. This covers everything from storage to pick, pack, and shipping. They even handle customer service tasks, such as returns. Not to mention it also includes some helpful tools, like spreadsheets, charts, and other management functions. This eliminates the need for storage space and staff, so sellers can focus on more important parts of their business.
As you might have guessed, there are some pretty hefty fees attached to this hands-off, stress-free option:
FBA Fulfillment Fee
The FBA fulfillment fee is based on a product’s dimensions, unit weight, shipping weight, and category type. FBA puts products into two size tiers:
- Standard size is any product that weighs less than 20 lb. and is smaller than 18x14x18in. These fees are less expensive, starting at $2.92 for products 6 oz or less and ending at $6.13 + $0.30 for every pound above 3 lb.
- Oversize is any product that is heavier than 20 lbs. and is larger than 18x14x18in. These fees are more expensive, starting at $8.94 for products that weigh 70 lbs and ending at $170.74 + $0.79/lb above the first 90 lb for products that weigh more than 150 lbs.
Keep your eyes peeled for other, add-on charges:
- Fuel and Inflation Surcharge: As of April 28, 2022, Amazon began adding a 5% fuel and inflation surcharge. This could change over time depending on if inflation goes up or down.
- Dangerous Goods: Amazon tacks on an additional fee for products that are risky to store, handle, and ship. These are products that could be flammable, pressurized, toxic, corrosive, etc. Many of these items are not really thought of as being “dangerous”, such as cosmetics, cleaning supplies, cell phones, and arts and crafts (see chart below).
- Apparel: Products that fall under the apparel category incur an additional fee (see chart below).
Standard-size product tiers
| Product type | Size tier | Shipping weight | Fulfillment fee per unit | Surcharge | Fulfillment fee (including surcharge) 1 |
|---|---|---|---|---|---|
| Most products (non-dangerous goods, non-apparel) | Small standard | 6 oz or less | $2.92 | $0.15 | $3.07 |
| 6+ to 12 oz | $3.07 | $0.15 | $3.22 | ||
| 12+ to 16 oz | $3.59 | $0.18 | $3.77 | ||
| Large standard | 6 oz or less | $3.54 | $0.18 | $3.72 | |
| 6+ to 12 oz | $3.77 | $0.19 | $3.96 | ||
| 12+ to 16 oz | $4.52 | $0.23 | $4.75 | ||
| 1+ to 2 lb | $5.14 | $0.26 | $5.40 | ||
| 2+ to 3 lb | $5.79 | $0.29 | $6.08 | ||
| 3+ lb to 20 lb | $6.13 + $0.30/lb above first 3 lb | $0.31 + $0.02/lb above first 3 lb | $6.44 + $0.32/lb above first 3 lb | ||
| Apparel | Small standard | 6 oz or less | $3.27 | $0.16 | $3.43 |
| 6+ to 12 oz | $3.43 | $0.17 | $3.60 | ||
| 12+ to 16 oz | $3.95 | $0.20 | $4.15 | ||
| Large standard | 6 oz or less | $4.22 | $0.21 | $4.43 | |
| 6+ to 12 oz | $4.40 | $0.22 | $4.62 | ||
| 12+ to 16 oz | $5.07 | $0.25 | $5.32 | ||
| 1+ to 2 lb | $5.81 | $0.29 | $6.10 | ||
| 2+ to 3 lb | $6.50 | $0.33 | $6.83 | ||
| 3+ lb to 20 lb | $6.68 + $0.30/lb above first 3 lb | $0.33 + $0.02/lb above first 3 lb | $7.01 + $0.32/lb above first 3 lb | ||
| Dangerous goods | Small standard | 6 oz or less | $3.85 | $0.19 | $4.04 |
| 6+ to 12 oz | $4.08 | $0.20 | $4.28 | ||
| 12+ to 16 oz | $4.16 | $0.21 | $4.37 | ||
| Large standard | 6 oz or less | $4.29 | $0.21 | $4.50 | |
| 6+ to 12 oz | $4.52 | $0.23 | $4.75 | ||
| 12+ to 16 oz | $5.09 | $0.25 | $5.34 | ||
| 1+ to 2 lb | $5.71 | $0.29 | $6.00 | ||
| 2+ to 3 lb | $6.23 | $0.31 | $6.54 | ||
| 3+ lb to 20 lb | $6.57 + $0.30/lb above first 3 lb | $0.33 + $0.02/lb above first 3 lb | $6.90 + $0.32/lb above first 3 lb |
Monthly Storage Fee
Storage fees are based on size tier, time of year, daily units in storage, volume per unit, and whether or not your product is classified as a dangerous good.
Watch out for holiday months and dangerous goods because they will make your storage fees go up. See the chart below:
| Month | Standard-size | Oversize |
| January – September | $0.83 per cubic foot | $0.53 per cubic foot |
| October – December | $2.40 per cubic foot | $1.20 per cubic foot |
Dangerous Goods
| Month | Standard-size | Oversize |
| January – September | $0.99 per cubic foot | $0.78 per cubic foot |
| October – December | $3.63 per cubic foot | $2.43 per cubic foot |
Pay attention to your inventory turnover. If your product sits in Amazon’s warehouse for over 365 days, you’ll be hit with a monthly, long-term storage fee in addition to the monthly storage fee. This fee is either $6.90 per cubic foot or $0.15 per unit, whichever is greater.
FBM Costs
Fulfillment by Merchant (FBM) is an option that sellers have to store, package, and ship orders themselves. This option is attractive for sellers that want more control over customer service, returns, and other parts of the fulfillment process that tend to get messy.
How to Save Money With FBM
FBM doesn’t have separate Amazon fees like FBA does. However, whether it’s less expensive than FBA is up to you since you’re in control of how you store, package, and ship your product. Discounted shipping rates can help you save a lot of money. You can’t find these rates by taking a trip to your local post office. Only shipping technology companies, like eHub, that keep close relationships with shipping carriers can help you lock down worthwhile discounts.
FBA vs. FBM
If you’re trying to decide whether FBA or FBM would be the best option for your business, take a look at what our Amazon experts had to say:
“… I find that FBA is the better 3PL option for most brands we work with … just did a case study with a client where simply converting from FBM to FBA increased sales by 1.65x.” said Joshua Rawe, Co-Founder of eSpark. Unlike FBM, FBA sellers automatically get the Prime badge, which means customers are more likely to choose your listing for faster shipping. FBA sellers are also eligible to get the Buy Box (the white box on the right side of the screen where you add items to your cart). It’s much, much harder for FBM sellers to get the buy box.
Weight, size, and type of product are huge factors in whether you should choose FBM or FBA. “Do you sell big, bulky, heavy things? You’ll be hit hard with Amazon fees if you attempt to FBA” said Eric Smith, Director of Alliances at Pattern. Ryan Moffet, Director of Ecommerce at Pattern, adds to Eric’s statement, “FBM is a great option for things that require special handling (i.e. items that need to be cold-packed, are glass)”.
Is It Worth Selling on Amazon?
After learning about how expensive Amazon seller fees can be, you might be wondering if it’s even worth the trouble. Our Amazon experts say selling on Amazon can be very lucrative for your business so long as you have the right business strategy.
Here are some words of advice from our experts on how to be a successful Amazon seller:
- “..people aren’t budgeting enough for Amazon. They tend to be surprised at the costs of selling on Amazon.” said Rawe.
- “If Amazon is too expensive, it might be a COGS pricing issue. Of course, it’s brand-specific, but I wouldn’t launch a brand + product with a COGS over 30%.” said Rawe.
- “Brands that we work with generally spend anywhere from 5% to 15% of total top-line revenue invested back into Advertising. We’ve found that of course this varies depending on your ad strategies, category, etc… but is a good rule of thumb.” said Moffet.
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