Amazon New Seller? Know The Costs You'll Incur
When you are starting an Amazon business, you must be aware of the costs you will incur, to plan your profit margin.
So to make your job simpler, I have listed the costs you must know before starting to sell on Amazon.
1. Seller's Fees
A seller fee is something that is levied on all the sellers by Amazon. But it will vary with the type of sellers.
The professional seller must pay a monthly subscription of $ 39.99. The individual seller should pay $ 0.99 per item.
Though it is high, all the sellers believe that the money paid is worth it. As Amazon is an e-commerce giant, you can earn great profits when you carry out business on their platform.
2. Referral Fees
As per Amazon's rules, every seller should pay referral fees for the products they sell. But the percentage varies with the products. However, the maximum level of fees does not exceed 50% of the selling price of the products.
You have to be careful while choosing your product and plan accordingly. I'll list out the categories with their referral fees from Amazon's official article.
Referral Fee Schedule (effective June 8, 2021) |
||
|
Categories |
Referral Fee (including the Digital Services Tax) |
Per-item Minimum Referral Fee |
|
Additive Manufacturing |
12.24% |
£0.25 |
|
Amazon Device Accessories |
45.9% |
£0.25 |
|
Baby Products (excluding Baby Clothing) |
|
£0.25 |
|
Beauty |
|
£0.25 |
|
Beer, Wine & Spirits |
10.2% |
£0.25 |
|
Books, Music, VHS, DVD**** |
• 5.1% for products with a total sales price up to £5.00 • 15.3% for products with a total sales price greater than £ 5.00 |
N/A |
|
Business, Industrial & Scientific Supplies |
15.3% |
£0.25 |
|
Car & Motorbike |
For remaining Car & Motorbike products:
|
£0.25 |
|
Clothing, Shoes, and Handbags* |
For Fulfillment by Amazon (FBA) and Seller Fulfilled Prime selections:
For all other selections:
|
£0.25 |
|
Computers |
7.14% |
£0.25 |
|
Computer Accessories |
|
£0.25 |
|
Consumer Electronics |
7.14% |
£0.25 |
|
DIY & Tools |
13.26% |
£0.25 |
|
Education Supplies |
15.3% |
£0.25 |
|
Electronic Accessories |
|
£0.25 |
|
Flow Control & Filtration |
12.24% |
£0.25 |
|
Fluid Transfer |
12.24% |
£0.25 |
|
Food Service |
15.3% |
£0.25 |
|
Furniture |
|
£0.25 |
|
Grocery & Gourmet |
|
N/A |
|
Health & Personal Care |
|
£0.25 |
|
Home and Kitchen |
15.3% |
£0.25 |
|
Industrial Electrical Supplies |
12.24% |
£0.25 |
|
Industrial Tools & Instruments |
12.24% |
£0.25 |
|
Jewelry |
|
£0.25 |
|
Large Appliances (except for Accessories, Microwaves, and Range Hoods) |
7.14% |
£0.25 |
|
Material Handling |
12.24% |
£0.25 |
|
Metalworking |
12.24% |
£0.25 |
|
Musical Instruments & DJ |
12.24% |
£0.25 |
|
Personal Care Appliances*** |
|
£0.25 |
|
Renewable Energy Supplies |
12.24% |
£0.25 |
|
Software |
15.3% |
N/A |
|
Sports & Outdoors |
15.3% |
£0.25 |
|
8.16% |
£0.25 |
|
|
Tire |
7.14% |
£0.25 |
|
Video Games - Games & Accessories |
15.3% |
N/A |
|
Video Games-Consoles |
8.16% |
N/A |
|
Watches |
|
£0.25 |
|
Handmade** |
12.24% |
£0.25 |
|
Everything else |
15.3% |
£0.25 |
3. Returns Processing Fees
This fee is charged by Amazon for certain product categories. Amazon has reduced the referral fees on certain categories like Apparel and shoes.
It has also eliminated the fees for Watches, Jewelry, Luggage, Handbags, and Sunglasses categories. This was implemented from June 1, 2021.
4. Shipping cost
Always remember that you should research before jumping to a conclusion. Likewise quote an estimation of the cost you will be incurred, if you ship the products by FBA and by yourself.
Compare it and act accordingly. Because you may not be aware of the cost any shipping service will ask.
And my suggestion is to take FBA. Because it is comparatively cheaper for international priority shipping.
FBA also increases the visibility of your products in the market. When you adopt FBA, you can enjoy many deals on Amazon Prime Day.
5. Inventory cost :
Amazon will charge a monthly inventory storage fee for the space your products occupy in fulfillment centers. Your products will be stored safely in Amazon's warehouse.
This monthly storage fee is calculated on your daily average volume, based on the size of a unit. These units are the place where your products are properly packaged and made ready to ship per FBA policies and requirements.
Fees may vary based on product size and time of year. If your inventory is classified as dangerous goods, the fees are assessed using a different rate card.
Conclusion
When you plan these costs properly, you can master Amazon's business.
Also, you can source more profitable products through Amz Online Arbitrage. Its deals list comprises the shipping cost of the products.
Follow Amazon Seller Talk Blogs for more Amazon tips and enjoy great profits.
