What are Amazon Seller Fees? A Beginner’s Guide
According to a Statista report, the net income from Amazon’s retail business was about $33.36 billion in 2021. Today the eCommerce platform has the highest number of sellers, with a record-high count of over 6 million. While a large section of the Amazon sellers generate high revenue and profit, a large part of it goes towards Amazon Seller Fees. But what are Amazon Seller Fees?
In recent times, this topic has become more relevant considering the hike in the Amazon Seller Fees during the holiday season, owing to inflation. If you’re a new seller on the platform or someone who wants to know all about seller fees and how to calculate them, this article is just for you.
Let’s dive in!
What are Amazon Seller Fees?
Amazon Seller Fees are the cost a seller on the platform has to incur right from creating an account to fulfilling and completing an order. There are four main types of Amazon Seller Fees. These include Selling Plan, Referral Fees, Fulfillment Fees, and Other Costs.
So, how much are Amazon Seller Fees, and is there an Amazon Seller Fee Calculator to determine the number?
The exact number is not possible to calculate, given the fact that there are too many factors such as shipping, fulfillment options, types of products sold, and more. However, in this section, I will dissect the four types of fees and help you understand each of them in a simple manner.
Amazon Seller Fee: Selling Plan
There are two main types of Selling plans:
- Individual: $0.99 per item sold
- Professional: $39.99 per month
Both of these have specifications that can help you determine which one you’re eligible for. Furthermore, both of these come with their own perks. For example, if you’ve just started out on the platform, then the Individual plan is more suitable for you. On the other hand, if you’re a small to medium business, a Professional plan can come in handy. You can check out the features for both and make your decision.
Amazon Seller Fee: Referral Fee
The referral fees are charged based on the product category. There are about 19 categories listed in the Fees and Pricing section of the portal. It’s calculated and charged in terms of percentage and varies between 6% and 45%. However, a majority of the categories and the various products that fall underneath them are charged somewhere between 8% to 15%.
The referral fee can be calculated with a simple formula:
Total Referral Fee = Item Price x Referral Fee Percentage
Amazon Seller Fee: Fulfillment Fee
The fulfillment fees are multiple categories and sub-categories. Overall there are two categories: ‘Fulfillment by Amazon’ and ‘Fulfilment by Seller’. In the latter case, the platform charges shipping rates based on the product category. Furthermore, these charges are passed on to the sellers as shipping credits.
In the case of FBA, there are three multiple sub-categories with the storage fees. These are as follows:
- Small and Light
- Storage Fees
For non-apparel and apparel, there are six tiers where each tier represents the item’s size. For each size, there are multiple shipping weight categories, and each of them is associated with a fulfillment fee and surcharge. In general, the shipping weight is determined by the item’s weight and dimensional weight. For small and light items, there are only two tiers.
Considering this part is pretty complex and has too many factors, one can use Amazon Seller Fees calculators. This way, you could, at the very least, get an idea of the approximate fees.
Amazon Seller Fee: Other Costs
Other costs include inventory fees, rental book service fees, high-volume listing fees, and refund administration fees. Based on the category, your fees vary but will most likely be between $0.005 and $5.
While these are the fees that the Amazon portal discusses, there are other overhead costs you’d incur as you start selling more on the platform. For instance, you’d need to invest in liability insurance.
In fact, your seller fees also have an impact on the insurance. For instance, the recent news about the rise in seller fees will have a significant impact on product liability claims you might get.
Here’s where platforms such as Spott come into play. Let me show you how.
How Does Spott Relate to Amazon Seller Fees?
Spott is an eCommerce insurance company that enables Sellers on platforms such as Amazon and eBay to cover their losses through liability insurance, suspension coverage, and more. However, beyond this, it also helps sellers and businesses with inventory boost so they can focus on their core aspect of making sales and generating revenue.
One of the most important aspects of selling on eCommerce platforms like Amazon is the numerous challenges sellers face. This can be with accounts being suspended, claims of refunds, claims of compensation for numerous reasons, and more.
All these challenges disrupt the operations of businesses and affect their existing revenue and sales. Thus companies have to incur losses that might be unnecessary. Spott helps you with solving these challenges with just a few clicks.
Spott will get you the best-priced liability insurance in record time to ensure that you don’t have to pay more than you need. With Spott, you can sleep easy knowing that you are fully covered and that you have up-to-date, comprehensive liability insurance, that is tailored to your eCommerce store.
With all this information, you can get back to selling by selling your products on Amazon and letting your business grow