Amazon Marketplace Fees 2022: A Detailed Breakdown for Sellers
Selling on Amazon Marketplace can be an extremely lucrative sales channel. But as a seller, you need a solid understanding of Amazon‘s fee structure to calculate profits accurately.
In this comprehensive 2800+ word guide, we‘ll explore the key Marketplace fees you need to know for 2022 and how to minimize costs.
Introduction: Why Understanding Fees is Crucial
With over 300 million active customers, Amazon offers access to more buyers than any other ecommerce platform. This makes their Marketplace attractive for third-party sellers looking to scale.
However, Amazon charges fees for this high-volume sales channel and ecosystem. As a seller, you pay referral fees, account fees, storage fees and more.
These costs can really eat into margins if you don‘t account for them properly. That‘s why understanding Amazon‘s Marketplace fees is so important.
With more detail on how fees are calculated, you can set prices strategically. This helps maximize sales and profits.
In this guide, we‘ll break down the main types of Amazon Marketplace fees for 2022 so you know exactly what to expect as a seller.
Overview of the Main Amazon Marketplace Fees
Amazon Marketplace fees fall into five main categories:
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Referral Fees – Amazon‘s commission on each product sale
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Closing Fees – Additional fixed fee for media items
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FBA Fees – Fulfillment costs for storing, picking, and shipping items
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Storage Fees – Monthly inventory storage fees at Amazon warehouses
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Seller Account – Monthly fee for Professional selling account
Within each fee type, there are different rates based on factors like product category, size, and weight.
Let‘s look at each fee in more detail so you know how it works and what to expect…
Referral Fees: Amazon‘s Commission Rate
The Amazon referral fee is essentially their commission. It‘s a percentage charged on the sales price of each item sold.
Referral fees range from 6% to 45% depending on product category. The most common referral fee is 15%.
In addition, categories have a minimum referral fee if the percentage doesn‘t meet a threshold. For instance, a $10 item with a 15% referral fee would only be $1.50. If the minimum is $1 for that category, you would pay $1 instead.
Referral Fee Rates Vary Widely
Referral fees vary quite a bit depending on the product category. For instance:
- Books/DVDs are charged 15%
- Electronics are 8-10%
- Jewelry has a higher 20% fee
This table summarizes the range of referral fee rates:
| Product Category | Referral Fee | Minimum Fee |
|---|---|---|
| Electronics | 6-10% | $0.30-$2 |
| Home & Garden | 15% | $1 |
| Toys | 15% | $1 |
| Jewelry | 20% | $2 |
| Automotive | 12% | $1 |
| Books/DVDs | 15% | $1.35 |
As you can see, rates are all over the map. It‘s essential you check the specifics for your product categories.
Prime Items Get Lower Fees
One perk available only to sellers using Fulfillment by Amazon (FBA) is slightly lower referral fees on some Prime eligible products.
For instance, the referral fee on jewelry drops from 20% to 17% for Prime items. Amazon gives the 3% discount to incentivize sellers to offer Prime shipping.
So if you sell high volume, having Prime-eligible inventory can save on fees. But you need to be using FBA to qualify.
How to Calculate Referral Fees
Figuring your referral fees is straightforward:
Referral Fee = Sale Price x Referral Rate %
However, you also need to check if the fee meets the category minimum. If not, you‘ll pay the minimum instead.
For example:
- $20 toy with a 15% referral fee would be $3
- But if the category minimum is $1, you would pay $1
Be sure to factor referral fees into your pricing calculations to account for Amazon‘s commission.
Variable Closing Fees for Media Items
In addition to referral fees, Amazon charges a closing fee on media-related products. This is an extra fixed fee on top of the percentage referral fee.
The closing fee is currently $1.80 per item sold. It applies to products in these categories:
- Books
- Music CDs
- DVDs & Blu-ray
- Video
- Software
- Video Games
- Video Game Consoles
So a book sale would entail a $1.80 closing fee plus the 15% referral fee. Downloadable media is not charged the $1.80.
This extra fee originated because buyers of physical media were more likely to return items. So consider it a restocking fee of sorts to discourage returns.
But for sellers, it represents an additional cost per order to factor into pricing and profit calculations.
FBA Fees: Costs for Fulfillment By Amazon
Sellers who use Fulfillment by Amazon (FBA) pay fees for picking, packing, shipping and handling returns.
Here are the main components of FBA fees:
FBA Order Handling
Amazon charges $2.90 to $5.90 per order shipped for fulfillment services based on product size:
| Item Size | FBA Order Handling Fee |
|---|---|
| Standard | $2.90 |
| Large | $4.90 |
| Special | $5.90 |
Standard size is less than 16 oz or 20 inches long. Large is between 16 oz to 2 lbs or 18-25 inches long. Special handling is for oversized items.
So FBA fees cost around $3 to $6 per order depending on size.
FBA Pick & Pack Fees
Amazon also charges for picking and packing your orders at their warehouses:
- Picking fee: Around $0.60 per unit
- Packing fee: Around $0.40-$1.90 per unit
The exact rate depends on product dimensions. Smaller items are around $1 total, while larger items may be $2 to $2.50.
For high order volume, pick & pack costs add up. But sellers would pay similar costs to fulfill themselves.
FBA Weight Handling
Next is a fee based on total shipment weight:
| Shipment Weight | FBA Weight Handling Fee |
|---|---|
| 1-2 lbs | $0.51/lb |
| 2-20 lbs | $0.42/lb |
| 20-150 lbs | $0.30/lb |
| 150+ lbs | $0.15/lb |
A 10 lb shipment would be around $4.20 for handling. Again, volume orders see costs multiply.
FBA Monthly Storage Fees
We‘ll cover storage fees separately in the next section. But it‘s one part of the overall FBA costs.
FBA Return Processing
When customers return items, Amazon charges $0.50 to $3 per return for processing plus disposal fees if items are unsellable.
How FBA Fees Compare to Self-Fulfillment
FBA fees may seem high, but so are the costs to handle fulfillment internally:
- Warehouse space for storage
- Staff or time for picking/packing
- Shipping supplies and labels
- Customer service to handle returns
This table compares 10,000 orders fulfilled internally vs. via FBA:
| Cost | Self-Fulfillment | FBA |
|---|---|---|
| Pick & pack | $15,000 | $0 |
| Warehouse space | $8,000/mo | $0 |
| Shipping labels | $20,000 | $0 |
| Returns | $10,000 | $0 |
| Total | $53,000+ | $29,000 |
Even with FBA fees, most sellers come out ahead by letting Amazon fulfill orders. But run the numbers for your specific product and volume.
Service fees can eat into margins on low-priced, lightweight items. But order volume is what makes FBA costs worthwhile for serious sellers.
FBA Inventory Storage Fees
In addition to fulfillment fees, Amazon charges monthly storage fees to hold your inventory at their fulfillment centers.
Here are some key points on FBA storage fees:
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Fees range from $0.48 to $2.40 per cubic foot, depending on season.
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Charged monthly based on average daily volume that month.
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Free storage tier for first cubic foot per ASIN.
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Long-term storage over 1 year is $11.25 per cubic foot.
Storage fees are in addition to fulfillment costs, so factor them into your total FBA expenses.
FBA Inventory Storage Fee Rates
Here is a breakdown of Amazon‘s current FBA storage fees for 2022:
| Month | FBA Storage Fee per Cubic Foot |
|---|---|
| Jan – Sept | $0.48 |
| October | $0.86 |
| Nov – Dec | $2.40 |
| 1+ Years | $11.25 |
Rates more than quadruple in Q4 for peak holiday sales. Plan inventory needs accordingly.
Amazon bases fees on average daily volume that month. So even if you remove inventory before month-end, you pay for the days it was stored.
Storage Fee Example
Let‘s look at a sample scenario to see how storage fees add up:
- You sell widgets that take up 1.3 cubic feet per unit
- Monthly sales volume varies from 700 units to 2500 units
- Average storage per month ranges from 1000 to 4000 units
Here are the estimated monthly storage fees:
| Month | Avg. Volume | Cubic Ft | Fee per CU FT | Est. Fees |
|---|---|---|---|---|
| Jan | 1000 | 1300 | $0.48 | $624 |
| Feb | 1500 | 1950 | $0.48 | $936 |
| Mar | 2500 | 3250 | $0.48 | $1560 |
| … | … | … | … | … |
| Nov | 4000 | 5200 | $2.40 | $12,480 |
| Dec | 3500 | 4550 | $2.40 | $10,920 |
As you can see, fees add up quickly at over $1000+ per month on average. And that‘s just 1-2 products.
Many sellers don‘t account for these costs when pricing items, eating into their margins. Understanding storage fees is crucial.
Amazon Seller Account Fees
To sell products on Amazon Marketplace, you need a seller account. There are two main options:
- Individual: Free account for low-volume sellers
- Professional: $39.99 per month paid account with added features
Individual Seller Account
An Individual seller account allows you to sell up to 40 products per month on Amazon. It‘s free, but has limited features.
With an Individual plan, key things to know:
- Can list up to 40 items per month for free
- Charged $0.99 per item sold after first 40 sales
- No volume pricing tools or marketing features
- Good for testing or occasional sales
This account works well for sellers just starting out on Amazon. But inventory and selling restrictions make it impractical for serious volume.
Professional Seller Account
To unlock more features and sell at scale, a Professional selling account makes sense despite the $39.99 monthly fee.
Benefits of a Pro account include:
- No limits on number of products listed
- Lower referral fees on some FBA inventory
- Volume pricing tools for bulk uploads and repricing
- Marketing features like A+ Content and product display ads
- Priority listing in product categories
For context, one extra product sale per month covers the $40 fee. So the expanded tools quickly pay for themselves in added sales.
If you plan to sell more than just occasionally on Amazon, the Professional account is likely worth the monthly investment.
Other Potential Amazon Fees
In addition to the major fees we‘ve covered, there are some optional services that also come with fees:
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Sponsored ads: Pay-per-click fees for Headline Search, Product Display and Sponsored Brands ads run through Amazon.
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Product imaging: Special services like 3D Spins ($10-$30), enhanced content ($1-$5 per image), and infographics ($500 design fee) to showcase products visually.
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Prep services: Labeling, bagging, bubble wrapping and other prep to get products “ready to fulfill” costs $0.20-$0.80 per unit.
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Returnless refunds: Allowing customers to keep products they return costs $6 per return.
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Specialty fees: Any hazardous materials, oversize/heavy products, or other special handling incurs added fees.
These types of services all have associated fees if you choose to leverage them. Use judiciously based on value.
6 Tips to Minimize Amazon Fees
Here are some tips sellers can use to reduce Marketplace fees:
1. Compare FBA costs vs DIY fulfillment: Use an online FBA calculator to estimate total fulfillment fees based on your product details and order volume. Compare to your current fulfillment costs to see which method is more cost-efficient overall.
2. Analyze slow-moving inventory: Routinely check your inventory reports for slow-moving ASINs. Liquidate or remove these products to avoid storage fees accumulating.
3. Review storage needs seasonally: Look at past sales data to forecast inventory needs month-by-month through peak and non-peak periods. Stock just enough to meet demand and avoid overpaying for unused storage space during low-sales months.
4. Factor fees into pricing: Calculate your total landed cost per unit including product cost, referral fees and FBA fees. Determine pricing based on competitors and customer demand, while covering your costs. Don‘t just price by gut feel and end up losing money.
5. Promote strategically: Only pay for optional advertising if you‘ve calculated a positive ROI. Leverage native traffic from Amazon search first, then expand to ads cautiously.
6. Request fee adjustments: If you have a high sales volume or fast shipment times, you can contact Amazon to request reductions in referral or FBA fulfillment fees. Never hurts to ask!
Getting lean on fees requires close analysis of sales, costs and profitability. But keeping Amazon expenses in check is crucial to success as a seller.
The Bottom Line: Weigh the Benefits Against the Costs
Amazon Marketplace fees can seem excessive at first glance. When you add up referral fees, FBA costs, and more, margins get slimmer.
However, the enormous customer reach, trust, logistics infrastructure and tools Amazon provides are unmatched. These things dramatically boost sales potential for sellers.
It comes down to a tradeoff:
- Higher fees per item
- But exponentially more scale and volume
You sacrifice per-unit profit but make up for it with massively greater transaction volume and total profit.
Amazon is transparent about their fees so sellers can make informed decisions. Do the diligence to calculate your true costs and potential sales.
For most sellers, the sheer size of the opportunity outweighs the higher fees. But you need hard data on your numbers.
Understand exactly what you‘ll pay Amazon for their selling platform. Then thoughtfully weigh the benefits versus the costs for your specific business.