If you’re considering selling on Amazon, you’re probably wondering how the costs are going to fit into your budget and whether the opportunity for sales is worth the expense. Well, not to fear: here you’ll find Amazon seller fees explained in full.
The costs you can expect to pay depend on a number of factors, including how you decide to sell (as a Vendor or Seller), how you choose to manage fulfillment, and the volume of products you’ll be selling, among others.
Here are some of the typical costs associated with setting up and selling on Amazon to help you get up and running as quickly and cost-effectively as possible.
Considering becoming an Amazon Seller?
Find out everything you need to know in our beginner’s guide to selling on Amazon.
This is the first factor you need to take into consideration. How much does Amazon take from sellers?
There’s no getting around the fact that these fees add up, and it may feel frustrating when you see what your profit margin is when all is said and done. Many sellers weigh the benefits of selling on Amazon vs. eBay or other online platforms, because they can find smaller fees elsewhere. In fact, Where to Sell Online ran a side-by-side comparison of Amazon vs. eBay, and found that profit margins were somewhat better on eBay. However, their study was limited, and the fees will vary greatly on what you are selling, where your customer base shops, and what type of seller account you set up. Your best bet is to compare the two platforms yourself, using your own products to determine if you’d be better off selling on Amazon vs. eBay.
In addition to the seller fees, you’ll need to consider various costs to set up shop:
Both Individual and Professional sellers on Amazon can choose to use Fulfillment by Amazon (FBA) to stock, pack, and ship products. Although FBA comes with fees, many Amazon sellers find them to be reasonable and worth the cost in terms of reducing time spent packing orders and handling shipping. Using FBA can also make you eligible for Prime shipping, which is an additional incentive for potential customers.
FBA fees include boxes and packaging, and even cover returns handling if your buyers return items to Amazon.
There are two fees associated with Fulfillment by Amazon:
Picking, packing, and weight-handling fees – covers the entire pack-through-shipment process, including the cost of shipping.
Monthly storage fees – covers the cost of storing products in Amazon’s warehouses.
FBA fees are based on the size of the product you’re storing and shipping. Size includes any packaging for your product, such as shoe boxes, blister packs, or retail packaging.
There are two size categories:
Standard-size products – any fully packaged item weighing less than 20 pounds and not exceeding 18″x 14″x 8″.
Oversize products – any item over 20 pounds and/or exceeding 18″x 14″x 8″.
As with any business venture, selling on Amazon is all about proper planning and research to ensure doing business is as cost-effective and efficient as possible.
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