It is no surprise that Amazon is the first marketplace platform that most sellers consider using, as it makes up about 40% of global online sales. If you’re trying to increase your sales and make your brand more popular, Amazon should be the first option to think of, but like all online marketplace platforms, you’ll be required to pay selling fees. While many sellers have complained that the selling fees on Amazon can be quite high, there are a few things that you need to understand first before you opt for another marketplace platform.
In this guide, we will discuss Amazon’s selling fees and how they can be calculated.
Account Fees
The first thing you’ll have to pay for is the Amazon account fee, which is a monthly fee that you’re required to pay in order to sell on Amazon. If you have an Amazon Professional account, you’ll have to pay a monthly $39.99 fee with unlimited listings and access to 30 categories. The Amazon Individual, on the other hand, requires no monthly fees, with 40 listings per month and more than 20 categories supported.
FBA vs. FBM
FBA (Fulfilled by Amazon) means that you sell the product, but it is going to be fulfilled by Amazon. While FBM (Fulfilled by Merchant) means that you’re the one who sells and ships your products, but it’s Amazon that stores them and handles the fulfillment process. The FBA service is mostly why many sellers complain about losing money to Amazon, but in order to calculate these fees, you need to know about the costs of storage, shipping, and other additional fees you’ll have to pay. There are plenty of online FBA calculators that can help you calculate these costs as well as any hidden fees. However, if you want to calculate the FBA or FBM costs manually, you can ask yourself the following questions.
- How popular is the item?
- Can you ship at a lower cost?
- Will there be any additional storage fees?
- Will there be any additional monthly fees?
- What are the costs of shipping units to Amazon?
It should be noted, though, that using FBM has more benefits over FBA, like having more control over your products and being able to access your inventory at any time. You might also pay lower fees, as Amazon’s fees are charged according to the size of the item. You can also use a seller-fulfilled prime, which allows you to have the benefits of FBA without paying FBA and storage fees.
Sales Fee
Amazon typically charges sellers for every item sold. So, you’ll have to pay a per-item fee, high-volume listing fee, closing fee, or referral fee according to the category of the item. For Amazon Individual users, per-item fees cost $0.99, referral fees cost from 6-45% of the selling price, closing fee costs $1.80 per item, and high-volume listing fees cost $0.005 per ASIN.
One the other hand, an Amazon Professional account has no per-item fees but has referral fees that cost 6-45% of the selling price, closing fees that cost $1.80 per item, and $0.005 per ASIN as well. So, there isn’t really much of a difference between the Amazon Professional and Amazon Individual sales fees except for the per-item cost. However, you still have to take these costs into account when calculating all your selling fees.
Additional Seller Fees
In case you refund a customer, Amazon will charge you 20% more of its referral fees. If you’re shipping your own items, you will have additional costs. Amazon will help you with paying up the shipping credits for every sale you make. While shipping credits and costs do not count as selling fees, they’ll surely affect your overall seller fees, even if this credit is lower than the actual shipping fees you pay for order shipment. So, it’s important that you factor them into the overall selling fees.
Is It Really Worth It?
Sure, Amazon’s selling fees can be drastically high sometimes, but if you think about it, Amazon is the best way to make your brand more popular, bring more consumers, and have a higher selling rate. Selling your products on Amazon, despite it being an expensive marketplace, is a profitable investment in the long run. You’ll also have the opportunity later on to reduce your selling fees.
Selling your products on Amazon might be challenging at first, but once you’ve calculated your fees and started expanding your brand and selling more products, increasing your profits will become easier than ever. To maximize your profits, be sure to reduce selling costs and increase your brand’s visibility through online marketing.