How Much Does Amazon Charge Third-Party Sellers?

When it comes to selling products on Amazon, understanding the fees associated with being a third-party seller is crucial for running a successful business. Amazon charges various fees that can impact your profitability, so let's break down the main types of fees and how they affect you.

1. Referral Fees

One of the primary fees that Amazon charges third-party sellers is the referral fee. This fee is a percentage of the total selling price of an item, including the item’s price, shipping costs, and any gift wrapping charges. The referral fee varies by category, with percentages ranging typically from 6% to 45%. For example:

• Electronics: 8%
• Clothing & Accessories: 17%
• Books: 15%

The exact percentage depends on the category your product falls into. This fee helps Amazon maintain its platform and is charged regardless of whether the sale is fulfilled by Amazon or by the seller themselves.

2. Fulfillment Fees

If you use Amazon's Fulfillment by Amazon (FBA) service, there are additional fees for storing and shipping your products. These fees include:

• Fulfillment Fee: This is charged per unit and covers picking, packing, and shipping your products. For standard-size items, the fee is approximately $2.50 to $5.00 per unit, while for oversized items, it ranges from $8.00 to $75.00 per unit depending on the size and weight.

• Storage Fee: This fee is for storing your inventory in Amazon’s warehouses. It is charged monthly and is $0.75 per cubic foot for standard-size items and $2.40 per cubic foot for oversized items from January to September. The fees double during the holiday season (October to December).

3. Closing Fees

For media products such as books, DVDs, and music, Amazon charges a fixed closing fee per item. This fee is $1.80 per item and is in addition to the referral fee.

4. Subscription Fees

Amazon offers two types of seller accounts:

• Individual Account: This type of account does not have a monthly subscription fee, but it does charge a $0.99 fee per item sold. This is ideal for sellers who list fewer than 40 items per month.

• Professional Account: This account requires a monthly subscription fee of $39.99. It is better suited for sellers who plan to sell more than 40 items per month and offers additional features such as access to more reports and bulk listing tools.

5. High-Volume Listing Fees

Sellers with a high number of listings might encounter high-volume listing fees. If you have over 100,000 active listings, Amazon may charge a $0.05 fee per listing in excess of this number.

6. Refund Administration Fees

When a customer returns a product, Amazon refunds the referral fee but retains a refund administration fee. This fee is 20% of the referral fee for each refunded item.

7. Advertising Fees

Many sellers opt to use Amazon’s advertising services to increase visibility for their products. Amazon offers various advertising options, including Sponsored Products, Sponsored Brands, and Sponsored Display. The cost for these ads is determined through a bidding process, and you are charged based on cost-per-click (CPC) or cost-per-impression (CPM) depending on the ad type. The spending on ads can vary widely based on competition and keyword choice.

8. Additional Fees

• Removal Fee: If you want to remove your inventory from Amazon’s warehouses, there is a fee of $0.50 per standard-size item and $0.15 per oversized item.

• Long-Term Storage Fees: For inventory that has been in Amazon’s warehouses for more than 365 days, a long-term storage fee of $6.90 per cubic foot or $0.15 per unit is charged.

Fee Structure Summary

To give a clearer picture of how fees can accumulate, consider this example for a product sold using FBA:

• Product Price: $30.00
• Referral Fee (15% for a book): $4.50
• Fulfillment Fee (Standard-size): $3.00
• Storage Fee (monthly, standard-size): $0.75

Total fees: $8.25

Net Revenue per Sale: $30.00 - $8.25 = $21.75

It's important for sellers to factor these fees into their pricing strategy to maintain profitability. The exact impact will vary based on the products sold, the chosen fulfillment method, and the advertising efforts.

In summary, Amazon’s fees for third-party sellers can be quite complex, with different fees applicable depending on the type of product, the method of fulfillment, and the type of seller account. Understanding these fees and planning accordingly is essential for optimizing your profit margins and ensuring a successful selling experience on Amazon.