How Much Profit Does Amazon Take from Sellers?

When it comes to selling on Amazon, many potential sellers are curious about how much the platform takes from their sales. Amazon, being one of the largest e-commerce platforms in the world, offers a variety of selling options and fee structures, which can make understanding the exact amount Amazon takes from sellers somewhat complex. This article aims to break down these fees in a clear and detailed manner to give sellers a better idea of what to expect.

Amazon's Selling Plans

Amazon provides two main selling plans: the Individual Plan and the Professional Plan.

1. Individual Plan: This plan is suited for sellers who list fewer than 40 items per month. Sellers using the Individual Plan do not pay a monthly subscription fee but are charged a per-item fee of $0.99 for each item sold.

2. Professional Plan: This plan is designed for sellers who expect to sell more than 40 items per month. It costs $39.99 per month as a subscription fee, but it does not include the per-item fee.

Referral Fees

In addition to the selling plans, Amazon charges referral fees. These are a percentage of the total sales price (including the cost of the item and any shipping or gift wrapping charges) and vary by category. Here are some typical referral fees:

• Books: 15%
• Electronics: 8%
• Clothing: 17%
• Health and Personal Care: 15%
• Home and Kitchen: 15%

Fulfillment Fees

If sellers use Amazon's Fulfillment by Amazon (FBA) service, there are additional fees involved. FBA allows sellers to store their products in Amazon's warehouses, and Amazon takes care of packing, shipping, and customer service. The fees for FBA include:

• Fulfillment Fees: These are based on the size and weight of the item. For standard-size items, the fee is $2.50 per unit, and for oversized items, it is $3.31 per unit.
• Storage Fees: Amazon also charges for storing inventory in their warehouses. The standard storage fee is $0.75 per cubic foot from January to September and $2.40 per cubic foot from October to December.

Additional Fees

Besides the primary fees mentioned above, Amazon may also charge other fees based on various circumstances:

• High-Volume Listing Fee: For sellers with a large number of listings, a fee of $0.05 per listing might apply.
• Closing Fees: For media items like books, music, videos, and DVDs, there is a closing fee of $1.80 per item.
• Refund Administration Fee: When a customer returns an item, Amazon may refund the referral fee to the seller, but will charge a $5.00 refund administration fee.

Example of Fees Calculation

To illustrate how these fees impact a seller's profit, let’s consider an example of selling a product for $50 in the Books category:

• Referral Fee: 15% of $50 = $7.50
• Fulfillment Fee (Standard Size): $2.50
• Total Fees: $7.50 (referral) + $2.50 (fulfillment) = $10.00
• Net Profit: $50 (sale price) - $10.00 (fees) = $40.00

If the seller is on the Individual Plan and sells fewer than 40 items a month, they would not have a monthly subscription fee. However, if they were on the Professional Plan, the $39.99 subscription fee would need to be considered as well.

Conclusion

Understanding the fees associated with selling on Amazon is crucial for any potential seller. With costs ranging from selling plans and referral fees to fulfillment and storage fees, sellers need to carefully calculate their costs to determine their profitability. While Amazon's fees can seem daunting, the platform's vast reach and customer base can make it a valuable marketplace for sellers who effectively manage their costs and optimize their listings.

By familiarizing themselves with these fees and planning accordingly, sellers can better navigate the complexities of selling on Amazon and maximize their profits.