January 21, 2022

Amazon Seller Fees 2022 – Cost of Selling on Amazon

“I got my first sale on Amazon back in 2015 when Amazon was not the number 1 among marketplaces in Spain. In fact, I started selling on eBay before Amazon, which, at that time, was by far the leading marketplace in Spain.

My first order was a pack of "Ernie Ball Slinky 2221 guitar strings" that I sold using my online guitar store account. I quickly realized that something was wrong, as I had obtained the Buy Box of the product but, after doing calculations on fees and charges, I was losing money.

At that time, we did not have all the tools to calculate Amazon fees and FBA costs as we do now, and you had to do it with Excel. After that first sale, I dug into the expenses charged by Amazon using an Excel file and decided to remove all the guitar strings from Amazon. I left only the electric guitars, where I had way more margin, and I thought, lucky me, I took a look at those costs from the first minute, or I would have lost a lot of money. And that, among other things, is what I do on a daily basis for my clients.”

This is a real story shared by Jordi Ordonez, Ecommerce and Amazon consultant in Barcelona.

When you start selling on Amazon, you’re joining a retail destination that is home to a diverse range of sellers, from Fortune 500 companies to artisan merchants selling handcrafted goods. And they're all selling here for the same reason: to reach the hundreds of millions of people who purchase on Amazon.

Thousands of businesses around the world have used the platform to take advantage of and explore e-commerce prospects. Sellers can not only use Amazon to sell their items and grow their market share, but they can also make use of its numerous business solutions to boost their sales. To make it work, Amazon’s Seller fees act as a bedrock upon which its marketplace stands.

This article will discuss everything related to Amazon fees for sellers in 2022 with examples.

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Amazon Seller Fees

For brands, selling on Amazon can be a highly profitable channel. However, just like any other service, understanding the costs involved is critical if you want an accurate idea of your total profit and actual revenue. Selling on such a platform comes at a price. The selling fees on Amazon refer to the amount of money a seller has to pay to sell their product.

The extensive list of Amazon marketplace charges has confused numerous young Amazon entrepreneurs and continues to perplex seasoned sellers. Fees differ depending on your product and the plan you select (such as FBA or FBM).

To begin a profitable e-commerce business, you must first gain a thorough understanding of Amazon’s seller costs and what you can do to save more money. It is possible to lose all your earnings by not following this.

What Affects Selling Costs

The cost of selling is determined by a variety of factors, including your marketing strategy, product category, fulfillment strategy, etc. These categories allow you to select from a range of options to suit your goals.

The following are some of the main factors that affect Amazon fees for sellers:

  • Referral fee
    Regardless of your seller account, you are required to pay a referral fee (Amazon’s commission) on every item sold through the marketplace. However, the amount you have to pay depends on your product category and selling price. On average, most sellers pay an almost 15% referral fee on their products, with a range of 6% to 45%.

However, Amazon has also defined minimum referral fees for certain product categories. Amazon automatically calculates the referral fee and compares it to the minimum referral fee (if applicable) and charges the seller whichever is higher.

  • Per item fee
    Individual sellers (i.e., non-professional) pay $0.99 for each product sold. In contrast, professionals pay $0.
  • Charges for a monthly subscription
    Merchant fees are $39.99 if you are a professional seller (selling more than 40 goods per month). If you intend to sell fewer than 40 items each month, you will pay no upfront costs as you don’t need a professional level account. However, if you rely on third-party tools to assist your business, please note that many of them require you to become a professional seller.
  • Closing fees
    These only apply to books, music, movies, DVDs, video games, consoles, and software (BMVD items), and they vary by category, delivery destination, and shipping method.

Example: Fee of $1.80 per unit sold for items like music, movies, video games, etc. The seller is automatically charged $1.80 when a book is sold.

  • Fulfillment fee
    FBA fulfillment charges are determined by the dimensions and weight of the product. However, Amazon measures every package and puts it into a tier. You can increase your overall profitability by understanding the tier system as different dimensions are charged the same fee.

Example: Consider an example of an iPod cover (small standard weight of 6 oz or less).
The dimensions of the cover = 13.8 x 9 x 0.7 inches
Unit weight = 2.88 oz
Shipping weight = 2.88 oz
Fulfillment fee (per unit) = Small standard size with shipping weight of less than 6 ounces: $2.92

Amazon Seller Account Fees

A basic selling plan might be ideal for someone who wants to sell on Amazon occasionally. It gives you more freedom and comes with no long-term commitment. You can sell at your desired time and pay only when you make a profit.

You'll have access to your seller account once you've registered on Amazon. Consider the account to be your one-stop-shop when selling on an online marketplace.

There are two types of seller accounts available. The features and cost of each type are tailored to the needs of low-volume individuals and high-volume business suppliers.

Amazon Seller Fees: Cost of Selling in 2021 - 2022

Individual Seller Accounts

Individual seller accounts are perfect for new merchants, as they sell a smaller volume every month. With an individual account, you don't have to pay any monthly fees, but you do have to pay $0.99 every time you make a sale. While this may not appear to be much, it adds up over time.

There are several other limitations to consider as well. Individual sellers are unable to:

  1. Gain access to the necessary inventory reports
  2. Market things that fall within specific categories (health, beauty, grocery, jewelry, etc.)
  3. Use Ads to promote their products
  4. Create their own shipping rates
  5. Add more users to their account
  6. Make a large number of listings
  7. Become eligible for Buy Box

While these limitations might narrow down your experience, it’s still possible to profit from individual seller accounts.

Professional Seller Accounts

Professional sellers pay a $39.99 monthly subscription fee. Like those paid by individual sellers, subscription fees are deducted from your account balance. If your account doesn’t contain enough funds, the sum will be taken from your credit or debit card.

Some of the features of a professional seller account include:

  1. Allows you to upload a large number of items at once
  2. Offers integration with e-commerce platforms and order management software
  3. Offers gift wrapping
  4. Provides an unlimited number of product listings
  5. Allows you to become eligible for Buy Box

Which account to choose?

The number of sales on Amazon is the most important aspect in determining the best plan for each seller. Even a vague forecast improves the accuracy of a decision.

An individual seller is one who aims to sell a handful of items on the marketplace. It can also be a seller who is just trying out the platform and doesn’t require the extra features that come with a professional seller account.

Having a professional account will encourage you to take your business more seriously, especially when it comes to fulfilling the 40-item-per-month goal. If you want to sell more than 40 articles per month, you might consider choosing a professional seller account.

FBA Fees

Amazon charges sellers two specific types of fees that are applicable to both individual and professional sellers:

Fulfillment fees
This includes the entire process of picking, packing, and shipping the order items to the customer. FBA fulfillment fees include the cost of every step that leads to order fulfillment as the fee varies according to the product size and shipping weight.

There are two main categories of item size:

1. Standard Size

The standard size category includes products that are less than 20lbs in weight and have dimensions smaller than 18x14x8 inches. The fulfillment pricing ranges from $2.92 for items that weigh 6oz to $6.13 for items that weigh over 20lbs. However, Amazon charges an additional $0.30/lbs after the first 3lbs if the item weighs more than 20lbs.

There are two options to accommodate packages:

a. Small standard:

  • 6 oz or less = $2.92
  • 6+ to 12 oz = $3.07
  • 12+ to 16 oz = $3.59

b. Large standard

  • 6 oz or less = $3.54
  • 6+ to 12 oz = $3.77
  • 12+ to 16 oz = $4.52
  • 1+ to 2 lb = $5.14
  • 2+ to 3 lb = $5.79
  • 3+ lb to 20 lb = $6.13 + $0.30/lb above first 3 lb

2. Oversize

The oversize category includes items over 20 pounds in weight with dimensions bigger than 18x14x8 inches. Fees start from $8.94 for small oversize packages, which are over 70lbs with dimensions greater than 60 inches on the longest side. However, you can also be charged an additional $0.79/lb over the first 90lbs. There are four options to accommodate packages:

  • Small oversize: 70lbs or less; charged as $8.94 + $0.38/lb above first lb
  • Medium oversize: 150lbs or less; charged as $12.73 + $0.44/lb above first lb
  • Large oversize: 150lbs or less; charged as $82.58 + $0.79/lb above first 90 lb
  • Special oversize: Over 150lbs; charged as $150.94 + $0.79/lb above first 90 lb

As a seller, it’s essential to understand that your exact FBA fulfillment fee will be calculated according to the product category. You can also be charged an additional $0.40/item if you sell apparel items. There is no one-fee-for-everything with FBA. Also, your products will be shipped in branded boxes, even when you pay for packaging in FBA fulfillment fees.

Inventory management fees
This includes the cost of storing your products in fulfillment centers. Here are the inventory storage fees that Amazon marketplaces charges:

  1. Inventory removal fees
    If you decide that you no longer want to use FBA, removing your inventory from their fulfillment centers also comes with a cost. You will be charged $0.52 to $1.51 + $0.63/lb above 2 lb, depending on the item you want to remove or return. However, even if you want Amazon to dispose of your inventory, it will still cost you between $0.25 to $1.90 + $0.20 per lb above the first 10 lb per item.
  2. Unexpected preparation fees
    Amazon has strict seller rules enforced to ensure quality, and they also use fees to penalize sellers who fail to follow these rules. If you fail to follow the barcode label specifications for your FBA stock, you will be charged a labeling fee. Similarly, if your products are not prepared according to the strict packaging guidelines, you will have to pay an unplanned FBA prep fee.
  3. Long-term storage fees
    For any item from your inventory that has been in the fulfillment center for more than 6 months, you will have to pay a long-term storage fee of $6.90/cubic ft or $0.15/unit every month. Amazon calculates this fee by taking a snapshot of your inventory on the 15th of each month. The age of your inventory is calculated through first in, first out.

Your total payable fee will be calculated using the following two combinations:

FBA Fee Combination as an Individual Seller

As an individual FBA seller, here is the list of fees that you have to pay:

  • $0.99/item
  • Referral fees/item (according to product category)
  • Closing fees/item (if applicable)
  • FBA fees/item (combination of fulfillment and inventory storage fees)

FBA Fee Combination as a Professional Seller

As a professional FBA seller, you will pay the following fees:

  • $39.99/month
  • Referral fees/item (according to product category)
  • Closing fees/item (if applicable)
  • FBA fees/item (combination of fulfillment and inventory storage fees)

Use the free Sellzone FBA calculator in the Product Research tool to determine if a product is profitable.

Simply choose the preferred product, insert the cost of producing or procuring the product, and the price on Amazon. The tool will automatically calculate your Amazon fees, and show you how much you’ll make on every sale (​​Net, ROI, and Profit).

FBM Fees

With this fulfillment method, you as an Amazon seller will pick, pack, and ship your order items yourself or through a third-party logistics service provider. New merchants usually opt for FBM as a fulfillment method because FBA requires you to maintain a monthly order volume.

Like FBA, FBM also works through a fee-based structure and sellers will be charged in two combinations:

FBM Fee Combination as an Individual Seller

As an individual FBM seller, Amazon will charge you the following fees:

  • $0.99/item
  • Referral fees/item (according to product category)
  • Closing fees/item (if applicable)

FBM Fee Combination as a Professional Seller

With a Professional FBM seller account, you will have to pay the following fees:

  • $39.99/month
  • Referral fees/item (according to product category)
  • Closing fees/item (if applicable)

Weight Handling Fee (Shipping Fee)

Shipping rates vary by the types of products you sell, but they need to be handled carefully or they will eat up your margin. Amazon allows you to add shipping rates for your products in the following four ways. Amazon uses this information to display total shipping costs to your buyers when they add your items to their carts.

  1. Item-based shipping
    Amazon will apply a flat per-shipment and the appropriate per-item shipping rate for the order.
    Example: You define a per-shipment rate of $5.00 and a per-item rate of $1.50 as a shipping option. A customer orders 3 products, Amazon will automatically calculate the shipping as $9.5.
  2. Weight-based shipping
    Amazon will add the appropriate per-pound shipping rate to your defined flat per-shipment rate. This usually starts from $0.25/lb but can go as high as you want.
  3. Price-banded shipping
    You can create a range of order amounts, where each range has its own shipping rate. Amazon will review the order amount and identify the range to apply the appropriate shipping rate as a buyer purchases your products. For example, items priced between $50-100 can have a fixed $10 shipping rate.
  4. Weight-tiered shipping
    With the help of weight-tiered shipping, qualified sellers can create tiers according to the order weight for their freight, where every tier has its own shipping rate. As a buyer purchases your products, Amazon will review the total order to identify the tier to apply the appropriate shipping rate. For example, items weighing under 100lb can have a fixed shipping rate of $5.

Conclusion

Understanding Amazon commission rates is essential to maintaining a healthy margin for yourself and your business. If you are unaware of the various fees that Amazon can charge, your business could easily lose sight of its profits. If you’re setting up a new business, you can consider the Individual seller account as your sales will be slower since you only pay a flat rate on the number of items you sell.

Once your order volume increases, you can consider the pro subscription and the fulfillment method that suits your business better. You need to make your decision carefully as only one of the methods can help in increasing your sales volume to your planned levels.

Use the free Sellzone FBA calculator in the Product Research tool to determine if a product is profitable.

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