Amazon offers a huge opportunity to gain profit and have a successful e-commerce career. But a price goes along with it, which are minimal fees that go to the company for every product you sell. Moreover, the benefits that an online seller gains from a huge marketplace like Amazon are far better than other e-commerce platforms. Why? Since 2016, Amazon, specifically, has approximately 310 million active buyers all around the world.
This 2020, a lot has changed. The way people buy and sell based on what we call “the new normal.” Here are the updates on Amazon seller fees this 2020.
Monthly Subscription Fee
It is the first payment that you need to do upon signing up for a seller account. You can either select an INDIVIDUAL account or a PROFESSIONAL one. Each has its specific characteristics, benefits, etc.
The fee for a PROFESSIONAL account stayed at $39.99 per month. This fee has the following benefits.
- Free per-item see for every product purchased from you
- Order management updates
- Access to Amazon Marketplace Web Service for API services, such as report generation, and real-time feeds
- Inventory handling and monitoring
- Entitlement to win the Buy Box
- The ability to put your rate to ship media products like music, books, and videos.
- You also have the ability to:
- Provide gift wrap to your customers on specific items with no additional charge
- Upload items in bulk
- Compute US sales and include tax calculations per order
- Place special listing promotions
However, take note that if you go for a PROFESSIONAL account, you should be selling more than forty items monthly. Why? Let us look at it this way. An INDIVIDUAL seller account charges you $0.99 for every item a customer purchases from your listing. Therefore, if you are on a PROFESSIONAL plan and sell fewer than forty, you will be spending more than what you paid for your subscription fee.
In this case, you might want to think about going for an INDIVIDUAL account if you have a start-up business. Here are the features under this plan.
- Free of charge monthly subscription fee, instead each item sold is charged $0.99
- Follows Amazon’s standard shipping rates for all items
- Manual uploading of listings
- No option for free gift-wrapping
- Limited product category allowance, cannot sell jewelry, bags, food, shoes, art, etc.
This category involves fees that are applied for every item purchased from your listing. Here are the updates on these fees this 2020.
Amazon Referral Fees
It is equivalent to the commission that Amazon gets every time a product is sold on their marketplace. As a general rule, the referral fee is 15% (or less) of the product price. It may vary depending on the classification of the product. Also, there are some items where there is no minimum referral fee requirement. These products include collectible items (books, art, and entertainment products), gift cards, music, grocery and gourmet food, etc.
This year, online sellers noted that the minimum Amazon referral fee requirement went down to $0.30 from $1 on almost all categories, except for some classifications. However, this fee drop does not apply to jewelry items, including watches, where the referral fee stays at $2.
Some categories also saw some adjustments in their percentage charges, which are now progressive. It means the fee may differ based on the portion of the price higher than a specific amount. For example, for items under the FURNITURE and DECOR category, the referral fee is now 10% of the portion of the selling price for all products priced at more than $200. Items under the JEWELRY category also follows the progressive rule for the new referral charges.
On the other hand, some categories have more product-specific fee computations because of the tiered system. For example, in the shoes, handbag, and sunglasses category, the referral fee was lowered to 15% (from 18%) if the total sales cost is above $75. Multiple changes are applied to various categories. Therefore, check those under your listings to learn more.
Amazon Variable Closing Fee
If you sell media products, such as video and computer games, gaming consoles, gaming software, and many more, note an additional $1.80 payment to Amazon as a variable closing fee.
Amazon Refund Administration Fee
The refund administration fee applies when your buyer wants to return an item. You will get back the fees you paid, but you need to pay 20% of the referral fee or $5, whichever costs less.
Yes, we know. Sometimes, the fees can be quite confusing, which is why seller tools, such as an FBA calculator, are necessary to help you understand the charges you need to pay. However, the list is far from over. Here are some minor fees that you need to know when you put up your listing on Amazon.
- Goods under the regulated (or dangerous) products category have an additional FBA fee of about $0.06 to $0.16 per item but may vary depending on the product’s size.
- If you are offering textbook rentals, you have to make a payment to $5 to Amazon for every rental.
- If you are under the FBA (Fulfillment By Amazon) program, Amazon can handle the storage and inventory of your products, plus manage your item’s shipment to the buyer. If you want to use the company’s boxes, a box costs $ 0.10 from January to October and $0.15 per unit during peak months (November and December). Labeling and preparing each product also costs $0.50 to $1.20 for standard to large items and $1 to $2.20 for oversized ones. If you choose to place barcodes on your products, Amazon can do it at $0.30 per item.
- If the original box is damaged and needs replacement during a return process, Amazon can do the repackaging at a certain fee.
You must know every fee of your item on the marketplace to better understand the profit you can have from selling on Amazon. Additionally, it is best to utilize the power of automated repricers to keep up with the competitive market. Keep in mind that to succeed in e-commerce, specifically in a vast marketplace like Amazon, you always have to be updated on what’s new. Don’t stop learning and ace e-commerce this 2020.