Any business owner knows that turning a profit requires careful spending and a keen eye for where every penny is going. When selling on Amazon, there are a number of fees that sellers must take into account in order to be successful.
From product listing fees to packaging materials and beyond, it’s important to have a clear understanding of all the FBA seller fees associated with selling on Amazon so that you can make informed decisions about your business.
In this blog post, we’ll take a comprehensive look at all the different fees Amazon sellers should be aware of.
Why Do FBA Sellers Have So Many Fees?
As an Amazon FBA seller, you are required to pay fees to Amazon in order to use their fulfilment services.
These fees cover the cost of storage, packaging, and shipping your products to customers. While it may seem like a lot of money to shell out upfront, the convenience and peace of mind that comes with using Amazon’s fulfilment services is well worth the cost.
In addition, by using FBA, you are able to take advantage of Amazon’s vast customer base and world-class marketing capabilities.
All in all, paying Amazon FBA fees is a small price to pay for the many benefits that come with selling on the platform.
Standard Fees for Sellers
Product Listing Fee
The first, and most obvious, fee is the product listing fee. This is the fee charged by Amazon for each product you list for sale on their site. The good news is, this fee is usually very nominal – usually just a few cents per product. However, if you’re selling in high volume, those pennies can add up quickly!
Referral Fee
The second type of fee is the referral fee. This is the fee charged by Amazon for each item sold that results from a customer clicking on your product listing from Amazon’s search results page or from one of your sponsored ads. Referral fees vary depending on the category of the item sold, but are generally around 15%. So, if you sell an item for $100, you would owe Amazon a $15 referral fee.
Variable Closing Fee
The third type of fee is the variable closing fee. This is a fairly new fee that was introduced in 2017 and only applies to certain categories of products (specifically, media products such as books, music, DVDs, etc).
The variable closing fee is calculated as a percentage of the total sales price of the item being sold and ranges from $1.35 to $2.35 per item sold.
While this may not seem like much at first glance, it’s important to keep in mind that this fee is in addition to the other fees mentioned above and can quickly eat into your profits if you’re not careful!
Per-Item Fee
Now that we’ve covered some of the more common fees associated with selling on Amazon, let’s take a look at another type of fee – the per-item fee.
You may be thinking “I thought there was only a listing fee? What’s this per-item nonsense?” Well, the truth is there actually is a listing fee…it just doesn’t apply to everyone!
If you’re selling certain types of products (particularly large or heavy items), you may be required to pay an additional per-item fee in addition to the standard referral fee when those items are sold. These per-item fees range from $0.40-$0.80 per unit sold and are generally based on the size and weight of the item being sold as well as whether it requires special handling by Amazon fulfilment centres.
FBA Seller Fees
Amazon Sellers in the FBA program have access to a large and exclusive range of benefits.
From preferential treatment, to customer service taken care of and even to not handling, packaging and sending each order – the list goes on! However, every rose has its thorns, and as such, so too does Amazon FBA have its own Seller fees.
Inventory Charges
Under the FBA program, your inventory is handled at an Amazon warehouse and stored there until it is bought. Essentially your inventory charges are your “rent” based on the shape of your products and the total size that they take up on the shelves in the warehouse.
Long-term Storage Fees
If you haven’t optimised your supply chain, or have severely mismanaged your marketing you could end up with products being left on the shelves of the Amazon warehouse. To deter you from taking up too much wasted space, Amazon charges long-term storage fees.
These are only applicable if your products are in storage for over 365 days.
Non-compliance Fees
Just as Vendors face chargebacks for incorrectly preparing their labels, so too do Sellers face non-compliance fees.
If your products don’t arrive at the Amazon warehouse with the correct labelling, packaging and documentation, then Amazon will charge you for non-compliance. You may think it’s a pain, but actually it works in your favour. Their stringent conditions massively improve the speed at which Amazon can process products and get them directly to customers!
Pick and Pack Fee
Yes, there is a specific fee completely to do with packaging.
Well not just packaging. An Amazon employee must pick, prepare and pack each item that is being delivered to a customer.
Weight-handling Fee
It’s fairly self-explanatory isn’t it?
Amazon will charge you a weight handling fee determined by the weight of the shipped package.
Shipping Charges
Depending upon the shipping method and services chosen, Amazon will charge a varying shipping charge for each product or package sold.
Returns Processing Fee
Ideally, this will never happen. However, on the off-chance that a customer is dissatisfied at the products for a product (not delivery damaged) related reason, then they will charge a returns processing fee.
Prep Service Fee
Certain specialised items may well incur a prep service fee.
This is for items and packages that require a specialised, specific or personalised preparation before delivery.
Ready for FBA Seller Fees?
There is one way to never have FBA Seller fees catch you by surprise ever again.
With Seller Central Connect, you can view a product-by-product view of all your FBA Seller fees. You’ll have all the costs at your fingertips with just a couple of keystrokes allowing you to properly account for your profit margins.
- Along with that, it also allows you to:
- Bulk upload your entire product catalogue
- Reprice products automatically to win the Amazon Buy Box
- Synch Customer data and order metrics onto a single platform
- Integrate with your direct sales channels to improve inventory management
And much more. This cutting edge Amazon tool is only available from us. So get in touch with one of our professionals today! Remember to check out our ecommerce blogs and guides for the latest tips and tricks for business success.
