How much does it cost to sell on Amazon? This is a frequent question for entrepreneurs looking to jump into the Amazon marketplace, which currently includes more than 2.3 million active sellers worldwide (Marketplace Pulse, 2021). Sellers can choose an Individual or Professional selling account in any locale and expect to incur a percentage of referral fees for each item, but there are other Amazon fees, too.
There are a number of ways to sell on the Amazon platform, but the most common method is Fulfillment by Amazon, known as FBA. This method simplifies the process, allowing sellers to create a listing, send it to an Amazon warehouse, and then let Amazon handle the rest (getting it to the customer, returns, etc).
But how viable is FBA in 2021? Amazon FBA will cost sellers an additional portion of their profit, but how much depends on the locale, the product category, and what sort of seller fees you initiated upon sign-up to Seller Central.
Professional or Individual seller?
When a business creates an Amazon selling account, they can sign up for a Professional account or an Individual account. The difference is whether you will pay a monthly subscription fee or a smaller fee per transaction.
For the Professional selling plan, you are charged a non-refundable monthly subscription fee, regardless of whether you list or sell anything that month. Your first month is charged at sign-up. You do not pay a per-item account fee when an item sells. You also unlock access to some additional reports and selling tools, such as batch uploads.
If you are a brand owner or manufacturer, you are required to have a Professional selling account before you register for the Amazon Brand Registry. Even if you are a small business selling relatively few items, you will need a Professional account in order to use Brand Registry tools, such as A+ Content, Amazon Vine, Brand Stores, and more. You can also choose to sign up and downgrade your account later if you end up not needing these services or simply do not sell enough to justify them.
US: In the United States, Professional sellers will pay $39.99 per month.
UK: In the United Kingdom, Professional sellers will pay a £25.00 monthly subscription fee
The Individual selling plan is for sellers who do not need access to inventory tools and reports for volume selling that larger businesses might. Under the Individual selling plan, you do not pay a monthly subscription fee. You pay a per-item fee in addition to other fees you might incur.
US: American sellers with Individual accounts will pay a $0.99 fee for each item sold.
UK: British sellers with Individual accounts will pay a £0.75 per-item fee when an item sells.
If you’re wondering which level of account to choose at sign-up, you may want to use Individual if you are not selling more than 40 items per month. Or, choose Professional if you are registering for the Brand Registry.
What are Amazon referral fees?
On top of the fees already outlined, sellers are responsible for referral fees. This fee is a commission paid to Amazon for using their third-party marketplace platform to sell your items. This is where Amazon fees can be somewhat mysterious until you get started and see your full breakout.
How much are Amazon referral fees? Items in most categories have a per-item minimum referral fee, usually around $0.30 (US) or £0.25 (UK). But usually, the fee charged is a percentage of the item’s sale price and based on the category type (categories being any substore in the Amazon browse tree, such as Watches, Sporting Goods, Automotive, etc). Sellers pay the greater amount listed, whether percentage or minimum, so this will depend on your sale price.
For 2021, the latest Amazon referral fees can be seen in Seller Central with a breakdown by category:
Referral fees for Amazon US, broken down by category. The percentage of the sale price for most US categories is around 15%, with most consumer electronics categories sitting at 8%, and clothing and accessories at 17%.
Referral fees for Amazon UK, broken down by category. The percentage of the sale price for most categories is between 12.25% and 15.3%, with media at 5.1%.
Amazon FBA fees
When choosing Amazon FBA for your fulfillment method, there are additional fees to cover the cost of storing your products in Amazon’s warehouses; including picking, packing, and shipping orders; and providing customer service for products sold. These are the fee types you may see charges for:
Fulfillment fees for FBA orders: An overview of FBA fees for order fulfillment and related services. This fee will be charged based on size and weight, with “standard” size items running you $2.50 to almost $6, or £0 to £9 in the UK.
Monthly inventory storage fees: Storage fees are charged for all items stored in an Amazon fulfillment center based on the calendar month and your daily average volume of inventory.
Long-term storage fees: Inventory in Amazon fulfillment centers is assessed a long-term storage fee in addition to the monthly storage fee.
Removal order fees: You can have Amazon return or dispose of your inventory in Amazon fulfillment centers. A per-item fee applies.
Removal orders: You can remove inventory from Amazon fulfillment centers by having the inventory returned to you.
Returns processing fees: A returns processing fee is charged for orders for which Amazon offers free return shipping.
Unplanned service fees: When inventory arrives at a fulfillment center without proper preparation or labeling, Amazon provides those services for you. A per-item fee applies.
For sellers in the UK or EU countries, VAT obligations will also apply. To learn more about VAT requirements, go to Europe tax and regulatory considerations.
When calculating these fees, the total amount will depend on the size, weight of your item, category, and particular situation (such as where your inventory is located, how long it is stored, if it was properly labeled when it arrived at the FC, etc).
(Example breakdown of FBA fees for Amazon.co.uk products, according to Seller Central help pages.)
How much in total will I pay per item?
The total fees will depend on the product category, item size and weight, type of product (dangerous, liquid, perishable, and breakable items will incur higher charges), and of course, since referral fees are a percentage, the overall sale price of the item. Amazon Seller Central has a handy fee calculator (US calculator and UK calculator) to help you estimate this.
How to make your Amazon business profitable
Because it is quite easy for anyone to set up an Amazon selling account, you can expect a lot of competition (and this is only increasing year over year as the marketplace grows). But in order to be successful and reap a lucrative payday, you will have to research your products, know the market, know Amazon rules and policies, and proceed carefully. Use the fee calculator to set your price and understand your margins.
Though many Amazon businesses are profitable, you also cannot expect to win the Buy Box or rake in the sales without having a quality product, properly optimising your listings, running ads, understanding the marketing levers, and protecting your brand. If you would like assistance with your Amazon account, please check out our range of services and feel free to contact us for more information.