Introduction to Amazon Selling Fees
If you’re an Amazon seller, you’ve probably heard a lot about the pros and cons of using Fulfilled by Merchant (FBM) or Fulfilled by Amazon (FBA). You may not have considered that there are actually two types of Amazon sellers. Additionally, there are two selling plans you can sign up for: Either the Individual or Professional selling plan. Both of these business models have startup costs and Amazon selling fees associated with them. If you’re just getting started, here’s the difference:
When you sell on Amazon, there are two ways to do so: the Professional Selling Plan and the Individual Selling Plan.
- The Professional Selling Plan costs $39.99 per month, but there’s no per-item selling fee. Instead, Amazon charges you a variable closing fee as a percentage of each sale price based on your category size and product type (for example, books or electronics). You’ll also pay a referral fee for any products sold by someone else through your site or store, which is calculated at 3% of their sale price plus an additional fixed fee based on the item’s category size and product type (typically around a 15% marketplace fee in most categories.)
- In addition to paying these fees when customers buy from you (or when they buy from someone else though you), there are other Amazon selling fees that apply throughout the year such as inventory storage costs in certain regions where it has fulfillment centers—these vary from $0-$125+/month depending on where your inventory is stored and the quantity—and additional selling features like gift options..
Professional Selling Plan vs Individual Selling Plan
It’s important to note that there are two main plans: the Professional Selling Plan and the Individual Selling Plan. The Professional Selling Plan has a monthly fee, while the Individual Selling Plan does not. In addition to those two major differences, here are some other key factors you should consider:
- The Professional Selling Plan has no per-item fee for orders under $1,000 (including shipping). For example, if you sell something for $10 on Amazon using your Professional account, but it costs you $8 in shipping costs from UPS or FedEx (if they were used), then this cost will be deducted from your final payment by Amazon around 4-6 weeks after it ships out.
- The Individual Selling Plan charges a ~10% fee on all items sold through Amazon regardless of whether or not they are shipped by sellers themselves rather than Amazon warehouse workers.
Professional Selling Plan ($39.99 per month)
The Professional Selling Plan is an offering for those who wish to sell more than 40 items per month. The fee is $39.99 per month.
No per-item selling fee
You don’t pay a per-item selling fee.
While other sites may charge you to sell your items on their platform (like Etsy), Amazon does not. You only pay for the monthly subscription fee and if you want to use additional features such as Fulfillment by Amazon (FBA).
The only fees you will have to pay are those related to storage of your products in their warehouses, customer service and advertising costs when you utilize the FBA business model.
Order Processing and Customer Service Are Handled By Amazon With FBA
As a seller, you will not be responsible for handling customer service issues and returns if you choose the FBA model. Amazon handles this for you, so your customers will contact them instead of directly contacting you. This means that if there is a problem with an order that the customer has placed with you, it’s up to Amazon to resolve the issue by either replacing the item or issuing a refund.
Your products will also be stored at warehouses owned by Amazon where they can be fulfilled quickly and shipped out promptly. This allows sellers to avoid having their own warehouse space or third-party fulfillment partner which saves them money in terms of rent costs as well as monthly operational expenses. There are a lot of advantages to signing up under the Professional Selling plan and using the Amazon FBA model.
Access to Tools For Product Promotions
- Promotions tools. Amazon allows sellers to run promotions and discounts on products, as well as create special sales for certain customers or groups.
- Gift options. You can give your customers the option of receiving a gift card rather than having their purchase shipped directly to them in exchange for a small fee (1 cent per dollar). You will be charged a 25-cent fee per gift card sold through this program, but these costs are built into the price of your products and there is no additional cost for creating these custom options for buyers. This option is not available on all products, so make sure you check with Amazon before setting up this feature with your seller account.
- Amazon Prime membership access and other benefits available only through Fulfillment by Amazon (FBA). While you must pay an annual fee that ranges between $39-$119 per month depending on which program you’re using (FBA vs Seller Fulfilled Prime), this gives your customers access to advanced shipping features such as same day delivery in some areas if they live within certain zip codes; free 2-day shipping with no minimum order amount requirement; early access to deals and promotions available only through Prime members; etc.
Individual Seller ($0.99 per item sold)
If you’re on the Individual Seller plan, you’ll be responsible for:
- Shipping costs
- Customer service (e.g., responding to customer messages)
- Returns
- Inventory management and warehouse storage costs
- Fulfillment
- Any taxes or fees incurred during your Amazon selling experience
Fulfilled By Merchant (FBM) or Fulfilled By Amazon (FBA)
There are two options for selling on Amazon: Fulfilled by Merchant (FBM) and Fulfilled by Amazon (FBA).
- Fulfilled By Merchant (FBM): You handle the inventory, shipping, order fulfillment and management, and customer service.
- Fulfilled By Amazon (FBA): You ship your products to an Amazon’s warehouse, and they handle the rest.
Fees are minimal, however you can make them even lower by starting out with the Individual Seller account if you’re not ready to sell a large quantity of products yet.
Amazon’s selling fees, though low, can be reduced even further if you sign up for the Individual Seller account. The Individual Seller account has a $0.99 per item selling fee and no subscription fees. However, this comes at a cost: you’ll have to wait up to three business days or longer before your products are available in the marketplace.
This is ideal for sellers who aren’t ready yet to sell hundreds of products but still want to get their feet wet and see how much they can earn by selling on Amazon’s platform as an individual seller.
Wrapping Things Up
We hope you’ve found this breakdown of Amazon selling fees helpful. As we’ve explored, there are many ways to reduce your costs and increase your earnings on the platform. If you’re ready to get started with selling on Amazon, book a call with one of our Qualifications team members here at Elite Automation.
