In 2019, Amazon predicts that it will make somewhere in the neighborhood of $229.96 billion in sales, in its United States market alone. To put that enormous figure into perspective, that $229.96 billion is nearly double the amount of Amazon sales from 2017. With numbers like that, it’s no wonder why sellers big and small are continuing to gravitate to the platform as if it were a modern-day Gold Rush of sorts.
And, popular fulfillment programs, like FBA, have allowed Amazon to give unprecedented support to its sellers to ensure that their speedy delivery promises are fulfilled. It’s a win-win for sellers and Amazon alike – sellers need the exposure and support and Amazon needs the sales.
All of that said, joining and working within the Amazon Marketplace as a seller does come at a price. Unfortunately, the fees are not always as simple-to-understand as they should be. In fact, it’s not unusual for fees to fluctuate greatly from seller to seller. Let’s take a look at some of the most common selling fees and when they apply.
Subscription Fee
Screenshot via Amazon
The very first fee that a new seller encounters is the $39.99 monthly subscription fee for Professional Sellers. Professional sellers are sellers who plan on retailing 40+ items per month. Individual sellers (those who plan on selling fewer than 40 items per month) are charged $0.99 per item in addition to referral fees and variable closing fees.
Similar to the annual Amazon Prime fee for buyers, the subscription fee provides sellers a certain status and a specific view into the marketplace that they wouldn’t see otherwise. It also serves as the baseline, compulsory fee that is to be paid before all others. Professional sellers should expect other fees (we’ll go into those later), but they will never be charged a “per-item” subscription fee like individual sellers.
Referral Fees
Sellers are responsible for paying Amazon a percentage for every item sold; this is called a referral fee. The referral fee varies by product category, but in all instances, it’s calculated by deducting the percentage from the total sales price, excluding any of the Amazon tax calculation service figures. The fee can vary from anywhere between 8 and 51%, based on the product’s category.
Screenshot via Amazon
Please note that referral fees are treated differently for sellers using FBA (Fulfillment By Amazon) and registered Amazon Business sellers, as well as those affected by a “Categories Requiring Approval” scenario. If you use FBA, an Amazon FBA calculator will help you calculate your fees.
Closing Fees
This fees category includes sellers who have media products listed in the following categories and sub-categories:
- Books
- DVD
- Music
- Software & Computer/Video Games
- Video
- Game Consoles
- Video Game Accessories
If a product falls into one of these categories and/or subcategories, the seller is responsible for paying a closing fee of $1.80 for each media item sold, regardless of its listing price. Individual sellers receive a standard shipping credit based on what Amazon charges the buyer for shipping (based on the product category and the shipping method the buyer selects), and the seller is responsible for shipping the product even if the credit is less than the actual shipping costs. (Different rates apply for domestic and international shipping.)
Screenshot via Amazon
High-Volume Listing Fee
For non-media products who are associated with a High-Volume Listing ASIN (Amazon Standard Identification Number), Amazon charges a fee of $0.005, per ASIN. In order to be considered, the ASIN must have:
- Been created more than 12 months ago
- An active offer which has been made on the ASIN in the current month
- Not been sold in the previous 12 months
For serious sellers, this fee could become a hefty one. However, it should be noted that Amazon waives the High-Volume Listing fee for the first 100,000 ASINs. This is a monthly fee that is calculated by Amazon and shown on each statement.
Refund Administration Fee
One of the great things about Amazon is that it provides standardized, round-the-clock customer service (although Amazon has strict expectations of sellers when it comes to providing customer support). While it’s helpful to know that Amazon has your back should you be unable to respond to a customer promptly, this luxury does come at a price. Especially when it concerns the handling of buyer refunds.
Whenever a buyer requests a refund on a product whose payment has already been received by the seller, the referral fee will be paid back. However, a Refund Administration fee will be tacked on. Currently, this fee is set at “lesser than $5.00 or 20% of the applicable referral fee.”
Seller fees can vary greatly from seller to seller, so do your due diligence. Included in this are popular programs, namely FBA (Fulfillment By Amazon).
For a full view of the current 2019 Amazon seller fees, take a look at the Selling on Amazon Fee Schedule. There, you’ll find the important fine print that will help you get a better sense of what you should expect to owe, by product and by category. If you’re selling on Amazon.ca, refer to the Amazon.ca Fee Schedule.
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