How Much Do Sellers Pay to Amazon? The Comprehensive 2020 Reference with Real Cases Highlighted
Online shopping is being actively developed nowadays. The Amazon gross global impact might approach fifty per cents by the next year. There is no doubt that a lot of salespersons dream about coming to Amazon, as this almost guarantees their business steady development.
The prices at Amazon are pretty competitive. Therefore, it is essential to offer goods without unjustified markups. It is also important to account for seller fees before you get started in the marketplace. With this guide, you will quickly learn how much you need to deduct from your profits to fund the seller account at Amazon.
1. Subscription Options Overview
The first-ever thing that a seller is expected to do at the Amazon marketplace is account creation. You have just two available options to make life easier. One of them is for full-time salespersons, whereas the other one is for beginners.
The individual subscription costs nothing. Nonetheless, you will have to pay 99 US cents higher commission per every committed sale. This is added to the applicable referral fees described below. Contrary to what you could have thought after the first glance at the terms and conditions, this plan is only profitable for those occasional individuals who never sell more than forty items per calendar month.
No gift function is possible as long as you are on the free plan. You will also be banned from selling certain goods, such as food and jewelry. This list is routinely updated by the company, so you need to read the conditions very attentively before you make a choice.
Professional subscription costs some money monthly. Now the price amounts to 39.99 USD. You will have no restrictions on what you may distribute. You will additionally enjoy some useful and handy salesperson management tools.
2. Closing Fee
This charge applies to the media category only. It does not depend on the price of an item processed. The media shelf in the marketplace contains books, DVDs, games, and consoles for them.
3. Referral Fees
When you perform a sale, the fee is automatically calculated based on the actual price. This percentage is kept in the 6%-20% range and depends on the nature of goods that you offer to your customers. Say, for prepaid cards, a 20% charge is always applicable, whereas other categories, e.g. electronic devices, are significantly cheaper.
The deducted percentage is applied to the final price, with any taxes excluded. This amount is ultimately paid by a consumer. Amazon also has a minimum referral fee. This applies to most, but not all products in the list.
Let’s consider an example. If you sell some accessories for just 1 dollar, you might have considered that you would pay 15 cents. In reality, you will be charged 30 cents, because 30 cents is the minimum fee per item for Amazon in the case of office products. More information for all supported categories is given on the official website.
Keep in mind that certain categories are charged in two tiers. Furniture is charged at 15% on the first $200 of price. Above $200, the percentage gets down to 10%. For instance, a wardrobe offered at $400, incurs $30 on $200 and $20 on the remainder ($400 minus $200 equal to $200). A total payment, therefore, amounts to $50.
4. Expenses for FBA
We have already mentioned in other articles that you can select the FBA (fulfillment by Amazon) program. It is very convenient, particularly, for small salespersons. There are also some cons. Anyway, before making a decision, consider the following:
- Fulfillment means picking, packing, and delivering.
- The storage charge helps the marketplace to maintain the warehouse.
- Long-term storage is only paid by a seller if an item is kept in the warehouse for more than one year.
The fulfillment fee accounts for the size (shape) and weight of the processed product. In turn, the storage payment is based on the required space. Some helpful considerations are summarized in the below list:
- A higher rate will always be chosen. For instance, even if your item is very small, but it is heavy, you will have to pay for the mass.
- The storage fee is not the same throughout the year.
- The cost of delivering goods to Amazon will also be included in the invoice.
- The FeesTaking service that collects taxes is paid for separately.
5. Additional Expenses
In this guide, we described and exemplified all principal fees that you will face at the Amazon marketplace, in this or that way. There are also some less common charges that you would better be aware of in advance.
- If you return money to a customer for whatever reason, the platform charges 20% of the total price as its commission. However, for costly items (which are more expensive than 25 dollars), you will pay only 5 USD.
- If you fulfill orders yourself, Amazon will motivate you by giving credits. Note, however, that these credits are generally smaller than the actual expenses.