Amazon occupies over 40% share of online sales worldwide. This is major reason companies are increasingly looking to sell on Amazon.com. But then, the bigger question is, what is the cost of starting an Amazon FBA business in 2021?
Typically, Amazon seller fees are relative, varying across various factors, including the cost of a product, such product’s category, its weight, your plan, and a few other fulfillment processes. In essence, it is almost impossible to know the exact cost of selling on Amazon.
Nonetheless, you can use this guide to familiarize yourself with the various Amazon seller fees. Knowing these fees will help you have an estimate of the cost of starting an Amazon business in 2021!
Albeit, if you are ready to become an Amazon seller, consider using the Zon Hack product research tool to launch your services on the marketplace, optimize your listings with unlimited access to useful data and insights. Visit our “contact us” page to speak with the experts at Zon Hack.
So, let us get straight into it!
How much is the cost of selling on Amazon?
As mentioned earlier, the cost to start selling on Amazon depends on various factors, up to 10, including the type of account you intend to operate. Selling on Amazon makes you vulnerable to certain fees. The totality of these fees makes up for your cost of starting an Amazon FBA business. Below is a detailed outline of these fees.
1. Selling plan subscription
There are two selling plan options available for sellers who are looking to start selling on Amazon, an individual selling plan and a professional selling plan.
The individual selling plan is the best option for persons looking to sell less than 40 items monthly. It is free to subscribe to this plan, although, Amazon will charge you $0.09 per item sold as a selling fee.
The professional selling plan, on the other hand, isn’t free. It is the best option for persons or businesses looking to sell more than 40 items monthly, both inside and outside the United States. The professional selling plan allows subscribers to customize their bulk-list products, shipping rates, etc. This plan costs $39.99 monthly.
2. Selling services fee
Amazon implements the Selling Services program to allow verified companies (sellers) to find new customers at no upfront cost. There are 2 fees associated with the Amazon Selling Services, namely, pre-packaged and recurring fees.
The pre-packaged service allows users to buy your service(s) at estimated rates. Amazon charges 20% for products or services up to $1000 and 15% if more than $1000.
The recurring service typically applies to services that Amazon users purchase on a subscription basis. Such services include house cleaning, lawn care, etc. Amazon charges 15% of each service as a recurring service fee.
However, note that the Amazon selling services fee doesn’t include signup fees, lead fees, subscription fees, and advertisement fees.
3. Per-item fees
The per-item fee only applies to sellers who subscribe to the individual selling plan. These persons pay $0.99 for every product they sell. However, Amazon waives this fee if you are an active subscriber on the professional selling plan.
4. Referral fees
This fee applies to both users on the professional selling plan and individual selling plan. Amazon charges this fee whenever they refer users to your products or business through their brand reputation or website. Hence, for every product that you sell due to such a referral, Amazon charges you a referral fee. However, this fee depends on such a product’s minimum referral fee and referral fee percentage. In essence, Amazon charges whichever amount is higher to your account.
5. Rental book service fees
This Amazon fee is particularly for sellers (companies) that provide rental books. Amazon charges such sellers $5 per textbook rental sold. Ensure you are mindful of this fee whenever you are pricing your textbooks and setting shipping rates because of the accumulation of this charge over time.
6. Refund administration fees
This Amazon fee applies to sellers who refund customers after payment from Amazon. The refund administration fee is always lesser than the referral fee with about $5 or 20% of your referral fee. Amazon refunds the referral fee charged on that product after deducting the refund administration fee.
7. Variable closing fee
The variable closing fee applies to companies selling products such as books, music, DVDs, video games, Software, computers, Video game consoles, and accessories, etc. Amazon charges $1.80 per product sold as a Variable closing fee.
8. Shipping fee
Amazon shipping fee depends on various factors, including the product to be shipped, your subscription plan, whether individual or professional, order fulfillment solution, delivery address, etc. Albeit, the primary baseline for shipping costs is your selling plan.
Individual selling plan subscribers pay already set prices to ship their products. The prices range from $16.95 to $46.50 for international orders and $3.99 to $14.95 for domestic orders. Products that exceed the weight of your selected type of shipment are charged about $0.50 to $0.99 per overweighted pound.
Professional selling plan subscribers are allowed to set their shipment prices. This freedom, therefore, makes it extremely important to research your competitor prices, setting rates that do not make you lose your potential customers.
9. FBA Fees
The Fulfilment by Amazon fee applies to Amazon sellers who use Amazon FBA. Amazon implemented the FBA program to help sellers manage their inventory, shipping, and customer service. Amazon charges the following FBA fees:
- Inventory storage fee
- Fulfillment fee
- Per-unit fee
Amazon charges an inventory storage fee to help you store your products. It is charged monthly, depending on your type of product, whether dangerous or non-dangerous. Amazon also charges Long-term Storage Fees for products that have been stored for over 365 days.
The fulfillment fee cuts across the following services rendered by Amazon on your behalf:
- Customer support service
- Product returns
- Picking & packing orders
- Order handling
- Shipping orders
10. Multi-Channel Fulfilment Fees
This fee is for persons who are looking to sell both on and off Amazon. The Multi-Channel fulfillment program helps you to ship and store your items at an Amazon fulfillment center. Amazon charges about $5.85 to $143.30 per item sold. The MCF fees depend on unit weight, unit order, and shipping speed.