Navigating Amazon Seller Fees in 2023: A Comprehensive Guide

Introduction

When you're an Amazon seller, you'll encounter a variety of fees to consider. These fees fall into different categories: sale-related fees, which typically range from 8% to 45% of your product's selling price, with an average of around 15%; account fees, where Individual accounts have no monthly fee but charge 99 cents per item, while Professional accounts require a $39.99 monthly subscription; fulfillment and shipping fees, contingent on your product and fulfillment method (Fulfillment by Merchant, Seller-fulfilled Prime, or Fulfillment by Amazon); and miscellaneous fees, which may apply depending on your specific circumstances, such as high-volume listings, currency conversion, textbook rentals, refurbished items, or repackaging services. Our goal is to simplify the understanding of these Amazon seller fees and provide guidance on estimating costs for each product you list.

Amazon's Fees Related to Sales

When you engage in selling products on Amazon, you'll encounter two main categories of fees associated with your sales: referral fees and closing fees. Additionally, in the event of product returns, refund administration fees may also apply.

These fees are not standardized but instead fluctuate based on the category to which your item belongs and its selling price. Achieving a precise understanding of your individual costs may necessitate some research, and we will guide you toward the appropriate resources for this purpose.

Below, we offer a concise overview of these fees, and in the following sections, we'll delve into each one in greater detail. 

Seller Fee	Amount	Based on	Example
Referral Fee	Ranges from 8%–45% (most sellers pay 15%), charged if minimum referral fee is less than referral percentage of sale	Category	Home and Kitchen products:   Referral fee percentage: 15%   Minimum referral fee: 30 cents
Closing Fee	$1.80	All Media Categories	Books, music, video, and DVD products:   $1.80 closing fee + referral fee
Refund Administration Fee	Lesser of $5 or 20% of referral fee	Original selling price of refunded items	A refunded item with a $10 referral fee:   Refund administration fee is $2 (20% of $10)

 Referral Fees

Every Amazon seller, whether they have an Individual or Professional account, is subject to a referral fee for each item sold on the platform. This referral fee is determined by two key factors: the product category and the selling price of the item.

Referral fees are calculated as a percentage of the product's selling price. Typically, most sellers face referral fees ranging from 8% to 15%. However, these fees can climb as high as 45%, depending on the specific categories in which your products are listed.

To precisely determine the referral fees applicable to the products you offer, Amazon provides a Seller Fee Schedule. This schedule outlines the referral fees associated with various Amazon categories.

Minimum Referral Fees

Additionally, Amazon establishes Minimum Referral Fees for certain categories. If the category in which you are selling has a designated minimum referral fee, you will be charged the higher of the two fees, based on your product's selling price.

For a clearer understanding, let's consider an example involving two items listed in Amazon's Home and Kitchen category. This category carries a 15% Referral Fee but also imposes a minimum referral fee of 30 cents. Here's a breakdown of the fees sellers would encounter for these two items, each with different selling prices. 

	Single Drink Coaster	Set/4 Throw Pillows
Selling price	$1.50	$24.99
15% Referral Fee	22 cents (not applied since it is less than the minimum referral fee)	$3.75 (applied since it is greater than the minimum referral fee)
Minimum Referral Fee	30 cents (applied since it is greater than the 15% referral fee)	30 cents (not applied since it is less than the 15% referral fee)

Closing Fees

Amazon imposes a supplementary cost known as the Closing Fee on items falling within its media categories. This fee is a fixed charge of $1.80, and it is applied in addition to the Referral Fees for products belonging to any media category. These media categories encompass items like books, DVDs, music, software, computer/video games, videos, and video game consoles. It's worth noting that Amazon previously calculated the closing fee as a percentage of the sale price, but it has now transitioned to a set amount. Some sellers may still refer to it as the "variable closing fee" due to its historical calculation method. 

Amazon Seller Account Fees

Amazon provides two distinct types of seller accounts: individual and professional, each tailored to cater to the unique requirements of different sellers based on their sales volume and business scale.

Account Type	Best for	Monthly Fee	Listing fee
Individual Seller	Individuals and occasional business sellers	$0	99 cents per item sold
Professional Seller	Businesses and volume sellers	$39.99	Varies

Along with the differences in fees, each type of account offers features that accommodate small or large sellers’ particular needs.

Individual Seller Accounts

Individual Seller Accounts on Amazon are designed with occasional and low-volume sellers in mind. These accounts are easy to set up and do not involve any monthly fees. However, individual sellers are subject to a 99-cent fee for each item they sell. It's important to note that there are certain limitations and restrictions associated with individual accounts:

• Sellers are limited to selling up to 40 products per month (this limitation is based on the actual number of products sold, not the number of product listings).
• Individual sellers are not allowed to utilize paid advertising or advanced selling tools.
• Manual listing creation is required through the Amazon Seller Central dashboard; bulk uploads are not supported.
• Some product categories may be restricted or off-limits to individual sellers.
• Individual sellers cannot offer gift wrapping services as part of their listings.

Professional Seller Accounts

Amazon Professional Seller accounts cater to the requirements of larger businesses and offer various features suitable for high-volume selling. These accounts come with a monthly fee of $39.99 and provide several benefits:

• Unlimited product listings are available, and access to restricted categories is granted.
• Sellers can use paid advertising and advanced selling tools to enhance their listings.
• Bulk product uploads are supported, streamlining the listing process for numerous products.
• Integration with ecommerce platforms and order management systems is facilitated, simplifying order processing.
• Inventory management tools are provided, including Fulfillment by Amazon (FBA) inventory management, which can help streamline order fulfillment.
• Sellers have the option to offer gift wrapping services to customers, enhancing the shopping experience.

Which Amazon Account Is Best for You?

For established ecommerce sellers transitioning to Amazon, the Professional Seller account is the preferred choice due to its comprehensive features, making it well-suited for high-volume operations. In contrast, the Individual Seller account offers limited functionality and demands more manual oversight. However, if you're new to Amazon and in the process of selecting your products or testing the platform, the Individual Seller account is a viable option. It doesn't require any upfront costs, and fees are only deducted from your earnings, eliminating the need for out-of-pocket expenses.

Amazon Fulfillment & Shipping Fees

Your Amazon fulfillment and shipping costs are contingent on your product type and the fulfillment method you choose. Amazon offers three distinct fulfillment options:

1. Fulfillment by Merchant (FBM): With FBM, you are responsible for storing, packaging, shipping, and handling all of your orders independently, covering all associated expenses. While this method incurs fewer Amazon fees, it does not qualify for the Prime badge.
2. Seller-Fulfilled Prime (SFP): SFP allows you to offer Prime shipping on your orders, but you are still in charge of storing, packing, and shipping them yourself. However, you must adhere to Amazon Prime's specific packaging and delivery speed requirements. Additionally, a 2% fee is applied per order.
3. Fulfillment by Amazon (FBA): FBA involves sending your products to Amazon, which then handles the storage, packing, shipping, and customer service for your items. While FBA grants your products the coveted Prime badge and maximizes their visibility in search results, it comes with higher Amazon fees.

Below, we provide a detailed breakdown of the costs and fees associated with each of these Amazon fulfillment methods. Keep in mind that these expenses are in addition to your other Amazon selling fees. 

Amazon FBM Fees

In the case of Fulfillment by Merchant (FBM), sellers are responsible for covering the expenses associated with storage, packaging, and shipping, as Amazon does not impose any shipping or fulfillment fees. While this might initially appear as a cost-saving option due to fewer Amazon fees, sellers must consider additional expenditures such as rent for storage facilities, packaging materials like boxes and tape, postage for shipping, and potentially hiring personnel to assist with order fulfillment. It's worth noting that FBM does not provide access to the sought-after Prime badge, which could result in slightly slower sales compared to other Amazon selling methods. To optimize shipping costs, sellers can explore the use of shipping software; you can find more information in our buyer's guide to the best shipping software for small businesses.

Amazon SFP Fees

If you opt for Seller-fulfilled Prime (SFP), you'll be responsible for managing storage, packing, and shipping, similar to Fulfillment by Merchant (FBM). However, you must adhere to Amazon's specific packaging and quick delivery requirements to qualify for the Prime program. Amazon imposes a 2% fee for each of your SFP orders, allowing you to display the coveted Prime badge, which is highly effective in attracting customers. It's important to note that this fee is an additional cost on top of your fulfillment and shipping expenses, as well as your standard Amazon fees, which can impact your overall profitability. Nevertheless, participating in SFP offers the advantage of leveraging Amazon Prime's 24/7 customer service, which can help reduce your workload as a seller. 

FBA Fees

Both Individual and Professional sellers have the option to utilize Fulfillment by Amazon (FBA) for storing, packaging, and shipping their Amazon products. Although FBA involves higher fees compared to other Amazon fulfillment methods, numerous sellers consider these costs reasonable for a wide range of items. Moreover, FBA relieves sellers from the burdens of daily order packing and shipping, offering a valuable time-saving benefit. Additionally, FBA can enhance a seller's visibility on the marketplace and make their listings eligible for the Prime program, which can significantly attract customers and potentially justify the costs associated with FBA.

Here’s an overview of Amazon FBA fees:

FBA Storage Fees

The price for keeping your products in Amazon’s FBA warehouses changes with the season, notably shooting up by as much as 200% from October to December. This price varies based on your product’s size and classification, especially if it’s considered a “dangerous good” by Amazon. Such items—including laptops, smartphones, household cleaners, cosmetics, and spray paints—come with a heftier storage fee.

Non-dangerous goods
Month	Standard-size	Oversize
January–September	87 cents per cubic foot	56 cents per cubic foot
October–December	$2.40 per cubic foot	$1.40 per cubic foot
Dangerous goods
Month	Standard-size	Oversize
January–September	99 cents per cubic foot	78 cents per cubic foot
October–December	$3.63 per cubic foot	$2.43 per cubic foot

FBA also charges long-term storage fees for inventory held at an FBA warehouse longer than 181 days. This added surcharge ranges from $0.50 per cubic foot for items aged 181–210 days, up to $690 per cubic foot for items aged 365+ days. 

FBA Fulfillment & Shipping Fees

Fulfillment by Amazon’s fee structure covers a range of services, from picking an order from storage to packaging, shipping, and even handling customer service and returns. The cost begins at $3.22 per unit and increases up to $200+ for certain oversized items.

Factors determining this fee include the product’s size, weight, quantity, and category. Multichannel sellers should note that FBA charges greater fulfillment fees to fulfill non-Amazon orders. It also tacks on a greater fee for items in certain categories such as apparel and dangerous goods, regardless of sales channel.

Here are FBA’s base fulfillment fees for non-apparel items:

Size Tier	Shipping Weight	Fulfillment fee per unit
Small standard	4 oz or less	$3.22
	4+ to 8 oz	$3.40
	8+ to 12 oz	$3.58
Large standard	12+ to 16 oz	$3.77
	4 oz or less	$3.86
	4+ to 8 oz	$4.08
	8+ to 12 oz	$4.24
	12+ to 16 oz	$4.75
	1+ to 1.5 lb	$5.40
	1.5+ to 2 lb	$5.69
	2+ to 2.5 lb	$6.10
	2.5+ to 3 lb	$6.139
	3+ lb to 20 lb	$7.17 + 16 cents/half-lb above first 3 lb
Small oversize	70 lb or less	$9.73 + 42 cents/lb above first lb
Medium oversize	150 lb or less	$19.05 + 42 cents/lb above first lb
Large oversize	150 lb or less	$89.98 + 83 cents/lb above first 90 lbs
Special oversize	Over 150 lb	$158.49 + 83 cents/lb above first 90 lbs

 

Miscellaneous FBA Fees

In addition to the two primary FBA fees, you may also be charged other FBA fees depending on your products, packaging, and sales:

• Stock Removal Fees: For retrieving or disposing of unsold Amazon inventory, fees are set by the item’s size and weight.
• Labeling Fees: Items sent to FBA must meet barcode standards. Mislabeled items incur a 55-cent fee per unit.
• FBA Prep Service & Unplanned Prep Service Fees: FBA requires specific packaging. You can pay Amazon for this, or if items aren’t prepped correctly, an additional fee applies.
• Return Processing Fees: While most returns are included in the fulfillment fee, some categories (like apparel) aren’t. For these, FBA charges a return fee plus potential repackaging costs. 

Miscellaneous Amazon Fees

In addition to the primary selling fees on Amazon, there are several miscellaneous charges that may be applicable depending on your specific selling circumstances, the types of products you offer, and the choices you make:

1. High-volume Listing Fee: Sellers with an extensive inventory, typically 100,000 listed products or more, may incur an additional monthly charge of .005 cents per qualifying item. This fee is synchronized with the timing of regular FBA storage fees.
2. Amazon Currency Converter for Sellers (ACCS) Fees: If you operate outside of the United States and sell to US customers, you have the option to use the Amazon Currency Converter for your disbursements. These fees range from 0.75% to 1.50% and are calculated based on net proceeds over a 12-month period.
3. Textbook Rental Fees: For sellers involved in the textbook rental niche, Amazon imposes a $5 fee per rental, which is deducted from your earnings when a rental sale is completed.
4. Refurbished Items: Amazon's refurbishment program generally does not have an associated fee, but certain product conditions or situations may result in additional charges.
5. Repackaging Service Fee: In cases where buyers do not adequately package items when returning them, Amazon may step in and repackage the product on your behalf. This service incurs a fee, the specific amount of which depends on the particular circumstances. 

Conclusion

Amazon dominates the e-commerce landscape, accounting for nearly 40% of online sales and consistently attracting more than 2 billion visitors each month, even during slower periods. While Amazon's immense popularity and customer-focused reputation make it an appealing platform for sellers, it's crucial to recognize that these advantages come with a substantial and intricate cost structure.

The line between turning a profit and incurring a loss on every item sold through Amazon can be razor-thin. Therefore, a deep understanding of the various fees and expenses associated with selling on the platform is essential. Armed with this knowledge, sellers can make informed decisions about sourcing and selling products, ultimately positioning themselves for success in this vast and continuously expanding marketplace.