Let find out the cost of selling on Amazon

Cost of selling on Amazon? This is probably the question many sellers are most interested in when it decides whether to trade on the floor or not? Join AGlobal to find out what kinds of costs sellers need to pay when doing business on Amazon.

1. Sales account maintenance fee

Amazon offers 2 types of Amazon sales accounts. The fees and features of each are geared towards the specific selling needs of individuals and businesses.

Along with the difference in fees, each account type offers features that meet the specific needs of large or small merchants.

Personal seller account
For occasional and low volume sellers, individual Amazon seller accounts require little setup and have $0 monthly fees, but they come with some additional limitations compared to specialist merchant accounts. 

• Up to 40 products can be sold per month, not the number of products on the sale list but the actual products sold.
• Need to create listings manually in Amazon Seller Central dashboard, bulk upload is not supported.
• Limited to certain categories
• Unable to offer gift wrapping on Amazon

Professional seller account
The Amazon Professional Seller account is designed to meet the needs of businesses and offers a variety of bulk selling features for $39.99 per month.

• There are unlimited listings
• Offers bulk upload of products
• Connect to e-commerce platforms and order management systems
• Has inventory management and FBA inventory management
• Can give gift wrapping

2. Fees related to selling on Amazon

There are three types of fees Amazon sellers can pay when selling products on Amazon: referral fees, minimum referral fees, and closing fees. These fees vary depending on item category and sale price, so getting an accurate picture of specific costs takes a lot of research. ShopMetric has compiled some notes on the following types of expenses:

Referral fee
All Amazon sellers (both Personal and Professional accounts) pay a referral fee for every item sold in the marketplace. Two factors determine the referral fee: product type and selling price.

Referral fees are charged as a percentage of the product's selling price. Most merchants pay an average of about 15% referral fees. These fees can range from 6% to 45%, depending on the merchant product category.

Sellers can check their category referral fees by checking Amazon's Seller Fees Schedule.

Minimum referral fee
Amazon specifies a minimum Referral Fee for some product categories. Take for example products in the “Pet Supplies” category with an Amazon Seller Fee Schedule referral fee of 15% and a minimum referral fee of 0.3USD.

It can be seen that the 15% referral fee of the "rope" is 0.27 USD which is less than the fixed referral fee of 0.3 USD, so Amazon will apply a fixed referral fee for this case. And the referral fee of "cloud ball" is 0.57 USD, which is larger than the minimum fee, so Amazon will charge a fee of 0.57 USD.

Closing fee
Sellers also have to pay a closing fee of 1.8 USD for each item sold in the categories: Books, DVDs, Music, Software & Computers/Video Games, Video Game Consoles and Video Game Accessories .

3. Shipping fee

This fee is not part of the cost the seller has to pay to Amazon, but it will still cost a large amount if the business does not research or calculate it carefully, this cost will greatly affect the business process. Amazon has a policy of paying a credit for shipping per order delivered by a seller. Although the cost covered by Amazon will usually be lower than the actual cost paid by the seller.

Sellers can refer to the Amazon Shipping Credits Chart to calculate shipping costs for products.

4. Order Fulfillment Fee by Amazon (FBA)

The FBA service is popularly used by sellers outside of the US when it comes to many benefits such as reasonable cost, product participation in Amazon's Prime program, and many other benefits.

Two types of goods affect FBA fees that sellers need to be aware of:

• For full-size products: Standard-sized items, fully packaged, must weigh less than 20 pounds and not exceed 18″ x14″ x8″.
• For Oversize products: Any item over 20 pounds, over 18 ″ x14 ″ x8 ″, or both is considered oversized.

Storage fee: calculated based on the product size in cubic feet or cubic feet, especially in the last months of the year, the cost will increase due to the increase in the amount of goods purchased at the end of the year.

Long-term storage fees: Sellers can reduce storage costs when Amazin will reduce fees for products stored for more than 365 days.

Fulfillment Fees: Amazon charges a cost based on pickup and packaging, shipping and handling, customer service, and return processing.

Service Charges: If products are shipped to Amazon warehouses without adequate preparation or labeling, Amazon charges an additional fee for this service.

Order processing fee: Applies to orders with free returns.

Removal request fee: Amazon has a regulation that all products must have a shelf life of more than 6 months, if the product is less than 6 months old, Amazon will automatically remove the product and the seller must pay this cost. It can also be a cost because the seller wants to de-stock the product and Amazon will calculate the cost on a per-product basis.

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