Amazon Fees Explained

Table of Contents

When selling on Amazon, there are several types of fees that sellers may encounter, which can vary depending on the selling plan, product category, fulfillment strategy, and other factors:

  1. Subscription Fees: Amazon offers two types of selling plans: Individual and Professional. In the US, individual sellers pay no monthly subscription fee but instead pay a $0.99 fee per item sold. Professional sellers pay a monthly subscription fee (usually $39.99) regardless of how many items they sell.
  2. Referral Fees: Sellers pay a referral fee on each item sold, which is a percentage of the total transaction amount (including the item price, shipping cost, and any gift-wrapping charges). The percentage varies by category, typically ranging from 6% to 45%, with most categories falling between 8% to 15%.
  3. Fulfillment Fees: If you use Amazon’s Fulfillment by Amazon (FBA) service, you will pay fulfillment fees based on the size and weight of the product. These fees cover the cost of storage, packing, and shipping. Sellers using Fulfillment by Merchant (FBM) handle shipping themselves but must still account for shipping costs, which may be covered by the buyer or the seller, depending on the seller’s shipping settings.
  4. Inventory Fees: FBA sellers also pay for inventory storage. Monthly inventory storage fees are charged based on the volume (in cubic feet) occupied by the inventory. There are also long-term storage fees for items in fulfillment centers for an extended period (over 365 days).
  5. Closing Fees: For media items (books, DVDs, music, etc.), Amazon charges a closing fee in addition to the referral fee.
  6. High-Volume Listing Fees: If you list a large number of SKUs on Amazon, you may be subject to high-volume listing fees, depending on how many of your listings are active and how many sell each month.
  7. Refund Administration Fees: If a customer returns an item, Amazon refunds the amount of the referral fee you paid, minus a refund administration fee.
  8. Additional Fees: Depending on your selling practices and account status, you may encounter additional fees. These can include fees for using Amazon advertising tools (like Sponsored Products or Sponsored Brands), rental book service fees, or fees for optional services like labeling or prep services for FBA inventory.

It’s important for Amazon sellers to familiarize themselves with the current fee structure relevant to their account and to regularly monitor their account for changes to Amazon’s fee policies. Fee structures are detailed in Amazon Seller Central and should be reviewed carefully to understand the full cost of selling on Amazon and to price products accordingly.

Perishable Goods

If perishable goods stored in an Amazon fulfillment center go past their expiry date, this situation is covered by Amazon’s FBA policies regarding unsellable inventory. Here’s what typically happens:

  1. Identified as Unsellable: Amazon regularly scans inventory for expiry dates. Items that are within a set time frame of their expiry date or past it are automatically identified as unsellable.
  2. Removal Required: Once inventory is identified as unsellable, Amazon requires sellers to submit a removal order to have the items returned to them or disposed of. If a removal order is not created by the seller within a specified time, Amazon may automatically dispose of the items.
  3. Disposal Fees: Sellers may be charged fees for the disposal or return of their unsellable inventory. These fees are typically less than the standard fulfillment fees but can add up if there is a significant amount of unsellable inventory.
  4. Inventory Management: It’s crucial for sellers to actively manage their perishable inventory on Amazon. This involves monitoring stock levels, sell-through rates, and expiration dates to reduce the risk of inventory becoming unsellable.
  5. Preventive Measures: Sellers dealing in perishable items should consider setting conservative restock levels, running promotions as expiry dates approach, or only sending limited quantities to Amazon’s fulfillment centers to reduce the risk of loss due to expiration.

Failing to adequately manage perishable goods can lead to financial loss due to waste, removal fees, and lost sales opportunities. Hence, it’s essential for sellers to have robust inventory management practices, especially for items with a limited shelf life.