How Much Does Amazon Charge To Sell – You may have noticed that some Amazon fees are not explained well in Seller Central, or worse – not explained at all.
You can bookmark this page to come back and look up any charges you’ve been charged that you want to know more about.
How Much Does Amazon Charge To Sell
Referral fees are a basic fee charged to all third-party sellers who sell on Amazon. Amazon charges you a percentage of the sale and in return allows you to use their online marketplace.
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For example, if you sell a pet supplies item for $10, Amazon will charge you a $1.50 referral fee (which is 15% for pet supplies). You’re basically paying for the privilege of being listed on Amazon’s marketplace, getting traffic and exposure, while doing nothing other than listing your item for sale. It’s like Amazon is your affiliate and you pay them a commission for every sale they bring you.
Referral fee percentage may vary. Most product categories charge 15%, but in some categories it can be as low as 6% or as high as 45%.
FBA stands for Fulfillment by Amazon. If you store your products in an Amazon warehouse and Amazon ships them to your customers for you, you pay an FBA fee. This includes shipping, return management and support, inventory picking and packing, warehousing, counting, delivery, loading, etc.
Prime is what Amazon calls the majority of the price a customer pays for your product, before shipping and taxes. Usually this amount is the price your customer paid.
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When your price includes sales tax (such as VAT), your principal is the price minus the sales tax. Amazon separates the two to show sales tax as a separate item in your transaction details:
The closing fee is typically an additional Amazon referral fee charged on media items such as books, DVDs, video games, and music.
Amazon is constantly changing how they charge closing fees, it used to be based on a percentage of the price, later it had minimums and maximums, then it was just a flat charge. So sometimes they call it a variable, sometimes a constant – but it’s everything. About the same thing, closing costs.
Regardless of the calculation formula Amazon uses, the closing fee is an additional referral fee they charge for media items.
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I’m not too sure why Amazon charges extra for all media items. Maybe it’s because they originally started as an online bookstore and felt they were the best place to sell books and video games, so charge a premium for that?
For example, if you sell a book for $9.99, you get a flat $1.80 closing fee in addition to the referral fee and FBA:
It’s very difficult to make money with media items for less than $10. Amazon fees, shipping fees, and storage fees usually eat up all of your profit margin, leaving you with nothing in the end.
The shipping cost is the amount the customer pays for shipping to deliver the purchased product to his home. This fee is called the same, whether you do the shipping or Amazon.
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If Amazon is doing the shipping, you’ll also see a shipping chargeback entry on the same order.
Basically, if you do Merchant Fulfilled (MFN) and ship products to customers yourself, Amazon will pay you this shipping fee along with your sales revenue.
Your customer pays Amazon for shipping, so Amazon shows it as revenue on your transactions. But since you are not doing the actual shipping, they will also show a shipping refund in the same transaction. That means Amazon gets back the shipping revenue it gave you.
Unfortunately, adding the cost of shipping to revenue will inflate your revenue numbers if you’re not doing the shipping yourself:
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Inflated earnings are something you might want to avoid, especially if you’re showing your numbers to potential partners or doing any kind of financial analysis. Therefore, it is best not to use Amazon reports to derive your revenue numbers.
This normalizes your income, while still showing you all the transactions related to the shipment of a particular order. It basically shows your income – just like you would on your financial statements:
Numbers will not increase your income like Amazon. Include shipping reimbursement in your income calculation, rather than showing it in expenses.
An Amazon shipping promotion is a shipping discount that Amazon offers to customers, without you as the seller involved.
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For example, the customer does not have a Prime membership, so they must pay for shipping. Because of this, he may be reluctant to shop on Amazon. So Amazon encourages customers to buy more and offers them special shipping promotions.
There are different types of shipping ads that Amazon runs. But in general, none of them will affect you as a seller, except for inflated income. such as shipping charges and refunds for shipping charges.
If you click on the plus icon to expand it for more information, you’ll see the specific Amazon ad name used:
Here’s a list of some random Amazon ad IDs so you can see what they usually look like. These Amazon Advertising IDs appear in apps like Amazon because apps can read more detailed information through the Amazon API.
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As you can see, in the Seller Center, you often don’t see a specific Amazon Advertising ID. Only the shipping fee and promotional shipping discount will be applied.
A gift wrapping fee is the fee your customers pay to wrap their purchased products in gift wrap and also send a card along with it.
To enable Gift Wrap on your listings, you must check these boxes in the Seller Center:
If your listing is Fulfilled by Amazon (FBA), Amazon will do the gift wrapping and they will also retain the gift wrapping fee. All you have to do is enable the gift wrapping options in your listings as above and it will automatically be available to your buyers.
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Buyers will then be shown your gift wrapping options, and Amazon will send you all collected gift wrapping fees with your payment.
In cases where Amazon does gift wrapping, it will appear in your transactions along with the cost of the gift wrapping.
That is, when your listing is FBA (Amazon-Fulfilled), Amazon charges your customers for gift wrapping and it appears as your revenue in your transactions. But since you’re not the one doing the gift wrapping, Amazon also adds a gift wrapping chargeback to immediately charge you the gift wrapping fee collected.
If you want to do a financial analysis, or present your numbers to investors/partners, you really shouldn’t be using the inflated income that Amazon shows in their downloadable reports. Better to use programs like these that normalize your earnings and still show all relevant transactions from Amazon:
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Using high income directly from Amazon reports can be both good and bad. A higher revenue number means you can appear to be making more money to investors, potential business buyers, your followers, potential hires, etc.
But it can also be bad if you charge for some things based on revenue. It also adds to accounting complexity and confusion as to whether you should show gift wrapping reimbursement as an expense or just ignore all that math and declare income without showing the gift wrapping activity. I recommend showing all the same jobs, because it’s easier to track the numbers Amazon reports if you track all the transactions they make.
Ultimately, if you’re a small company, these details aren’t that important. Just do what’s easiest for you.
A gift wrapping commission is basically a referral fee charged on all gift wrapping services provided by you, the seller. If Amazon packs it, you don’t get a commission.
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Here’s what a typical gift wrapping commission fee looks like when you, the merchant (MFN), do it:
If you run a promotion and offer your customer a 100% discount (so that the final price the customer pays is 0.00) – Amazon will charge you a gift wrapping commission. As well as a small referral fee and referral fee.
Amazon cannot charge you more than the minimum referral fee because the referral fee is based on sales revenue. Earnings are now 0.00. So they charge you two other small minimums – the shipping fee and the gift wrapping commission fee. This is their way of monetizing zero sales that happen on their platform:
A freight handling fee is usually a referral fee charged on shipments completed by you, the seller (MFN). If Amazon ships, there is no restocking fee.
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Back in the day, Amazon only charged a referral fee based on the price of the item – and sellers took advantage of that. Some sellers charge around $0.50 for the product and an inflated amount for shipping (eg $18). This way they can avoid Amazon’s referral fees and just get paid