Amazon Merch Fees in 2022: A Complete Breakdown

Hey there! If you‘re considering selling t-shirts, sweatshirts, and other customizable merchandise through Merch by Amazon, you probably have some questions around the fees.

And I get it – all the Merch costs like referrals fees, transaction fees, and royalties can be confusing to figure out when you‘re first getting started.

But understanding Amazon Merch fees is crucial for calculating potential profits…so let‘s break it all down!

In this detailed guide, I‘ll clearly explain:

• The 5 main types of Merch by Amazon fees
• How the royalty structure works
• Tips for minimizing fees and maximizing income
• How Merch compares to other print-on-demand platforms
• Recommendations for growing a profitable Merch business

So if you want to boost your Merch income, you’ll learn how to price products, manage inventory, and use promotions to increase sales.

Let‘s dive in!

A Quick Refresher: What is Merch by Amazon?

In case you‘re completely new to Merch by Amazon, here‘s a quick overview:

Merch by Amazon allows independent designers to upload their own t-shirt designs and artwork. When someone buys your shirt or product on Amazon, it gets printed and shipped on-demand.

Some key things to know:

• Amazon handles production, shipping, and customer service
• No upfront costs – only pay fees on each sale
• Earn royalties on merch sold globally on Amazon
• Make designs for t-shirts, sweatshirts, PopSockets, and more

It’s an awesome model that lets you tap into Amazon’s built-in traffic and fulfillment network. But Amazon does charge various fees in exchange for their services and platform access.

And it’s crucial to understand these fees so you can accurately forecast potential profits.

Alright, let’s go over the key Merch fees and costs you need to factor in…

Breakdown of All Amazon Merch Fees

There are 5 main types of Amazon fees to be aware of:

1. Merch by Amazon Transaction Fee

This is a flat per-item fee that Amazon charges for each product sold:

• Apparel (t-shirts, sweatshirts): $0.17 per item sold
• PopSockets: $0.85 per item
• Prints: $0.80 per item
• Phone cases: $1.20 per item
• Home goods (pillows, blankets): $1.80 per item

So if you sell a t-shirt for $25, Amazon will deduct a $0.17 transaction fee from your royalties.

This helps cover their operational costs for payment processing, website hosting, customer service, and more.

2. Merch by Amazon Referral Fee

In addition to the transaction fee, Amazon collects an 8-15% referral fee on each merchandise sale.

Here’s the breakdown by product category:

• Standard t-shirts: 8% referral fee
• Premium t-shirts: 10% referral fee
• Sweatshirts: 12% referral fee
• PopSockets: 15% referral fee
• Phone cases: 15% referral fee
• Home goods: 15% referral fee

The referral fee applies to the item price before any shipping or taxes.

For example, if a sweatshirt sells for $35, Amazon takes a $3.50 referral fee (12% of $35) before paying royalties.

This helps Amazon cover costs related to attracting customers, handling payments, and managing the platform.

3. Variable Closing Fee

Important note – the variable closing fee does NOT apply to Merch by Amazon products!

This extra fee only applies to regular apparel and shoe products sold directly on Amazon.

But since Merch uses a print-on-demand model, you don’t have to worry about variable closing fees.

4. Merch by Amazon Storage Fees

Another fee you can skip with Merch by Amazon is storage fees.

With traditional Amazon selling, you pay monthly storage fees to keep inventory in Amazon’s warehouses before products are sold.

But again, because Merch is print-on-demand, you don’t get charged storage fees! Amazon only prints the item when an order comes through, so there‘s no finished product inventory sitting around.

5. Removal Order and Refund Administration Fees

If you delete a product listing from Merch by Amazon, there’s no removal order fee, so feel free to remove designs anytime.

However, if a customer returns a Merch item, Amazon charges a $2.50 refund administration fee to process the logistics.

Other Potential Merch by Amazon Fees

In some limited cases, Amazon may charge sellers additional fees:

• Chargeback fees – if a buyer payment dispute results in a chargeback, Amazon charges a fee to cover their costs.

• Unplanned service fees – if you request help for an issue caused by you as the seller, Amazon may charge an unplanned service fee.

But in general, these extra fees are pretty rare for Merch sellers.

Okay, so now that you know the main Merch by Amazon fees, let‘s talk about…

How the Merch Royalty Structure Works

The royalty you earn from each merch sale mainly depends on 3 factors:

1. Base royalty rate

This base rate varies based on the type of merchandise:

• T-shirts: 17% base royalty
• Sweatshirts: 13% base royalty
• PopSockets: 37% base royalty
• Home goods: 13% base royalty

2. Product price

Higher priced items will earn you more in royalties. Amazon has preset pricing tiers for each product category.

3. Amazon fees

The transaction fee, referral fee, and any other charges get deducted before royalties are paid out.

Here are the typical royalties you can expect to earn for some popular Merch products:

Product	Base Royalty	Price Range	Royalty Amount
Standard T-Shirt	17%	$12.99 – $19.99	$2.20 – $3.40
Premium T-Shirt	17%	$20.99 – $27.99	$3.57 – $4.76
Standard Sweatshirt	13%	$27.99 – $74.99	$3.64 – $9.75
PopSocket	37%	$14.99	$5.54
Throw Pillow	13%	$19.99 – $24.99	$2.60 – $3.25

Amazon pays out all accumulated royalties around the 15th of each month after deducting applicable fees.

And remember, the more designs you can upload and sell, the greater your royalty earning potential!

Now let’s go over some tips to maximize income and minimize fees…

Tips to Boost Your Merch Profit Margins

When using Merch by Amazon, you want to maximize royalty income while keeping fees low.

Here are some smart tips sellers use:

Price products competitively

Price your shirts and merch at attractive price points within Amazon’s predefined tiers. Underpricing too much eats into margins.

Experiment with promotions

Occasional promotions can increase sales volume and royalties to offset fees. Just avoid going too low.

Delete slow-selling products

Cut any underperforming designs quickly to avoid accruing transaction fees without sales.

Drive external traffic to listings

Getting external traffic to your shirts from social media, etc. boosts sales without added Amazon fees.

Prioritize evergreen, niche designs

Focus on designs with long-term appeal so you can maximize sales before deleting.

Level up to premium shirt tiers

The base royalty rate is slightly higher on premium shirts, so upgrade top sellers.

Branch into other merch types

Add stickers, blankets, hoodies once tier limits allow. Alternative products have higher base royalties.

Monitor royalty reports frequently

Stay on top of your statements to make smart financial decisions and avoid wasted spend.

With the right combination of great designs, targeted promotions, and ongoing optimization, you can build a solid merch income on Amazon!

Next let‘s compare Merch to other print-on-demand options…

How Merch by Amazon Compares to Other Print-on-Demand Platforms

Merch by Amazon isn’t the only print-on-demand (POD) service out there. The most popular options include:

Printful – Integrates with Shopify, Etsy, and other ecommerce platforms. Also fulfills orders through FBA. Offers posters, clothing, mugs, and other customizable products.

Teespring – Specializes in campaign-based selling, mainly focused on t-shirts. Sellers promote each campaign and only print orders once goal met.

GearLaunch – Specializes in merch for influencers and brands. Also handles printing and order fulfillment.

TeePublic – Marketplace for independent artists to sell their designs on t-shirts, stickers, and phone cases.

Let’s compare some of the key differences:

	Merch by Amazon	Printful	Teespring
Fulfillment Method	FBA only	FBA + other channels	Direct to consumer
Product Selection	Apparel, home goods	Posters, leggings, mugs, etc.	Mainly t-shirts
Order Minimums	None	None	Campaign based
Platform Reach	Amazon only	Multi-channel	Self-marketed
Ease of Use	Very easy	More complex setup	Simple campaign creation

Some key takeaways:

• Merch by Amazon is incredibly easy to use and leverages Amazon‘s traffic and fulfillment. But you‘re limited to their platform.

• Printful has a much wider product catalog but requires more customization and cross-channel marketing.

• Teespring focuses solely on campaign style selling, so may be a better fit for influencers with engaged followings.

Ultimately it comes down to your goals, target audience, and preferred business model. But it’s good to understand the landscape!

Now let’s shift gears and talk about growing a profitable Merch by Amazon business long-term…

7 Expert Recommendations for Scaling Your Merch Business

If you want to take your Merch by Amazon sales to the next level, here are some proven tips from successful sellers:

1. Diversify into multiple product types

Once your account tier is raised, introduce long sleeve shirts, sweatshirts, mugs, phone cases, and other products. More products equal more earning potential.

2. Tap into evergreen niche themes

Instead of just trendy designs, focus on evergreen niches and themes that will continue selling for years to come. Think space, nurse life, teacher quotes, etc.

3. Promote externally with Amazon influencer program

You can earn an extra 7% on purchases by promoting your listings externally and sending traffic to Amazon through their influencer program.

4. Experiment with Amazon PPC ads

Well-targeted Amazon PPC ads can help get your shirts in front of high intent buyers. Just watch your ad spend vs. profits.

5. Analyze designs that convert best

Use Merch Reports to identify your top selling shirts. Make more merch in those niches and build on those themes.

6. Outsource additional design work

Hiring freelance designers multiplies output. Worth it once you have the sales volume to support costs.

7. Stay on top of merch trends

Continuously research new trends and themes that could work well. Time new uploads around major events like holidays or pop culture crazes.

And if you hit occasional roadblocks, remember that most successful Merch businesses took time to build. Stick with it!

Okay, let’s wrap things up…

The Bottom Line on Merch by Amazon Fees and Profits

Selling customized merch through Amazon does come with fees – there‘s no way around it.

But by focusing on high-quality evergreen designs, smart pricing strategies, targeted promotions, and relentless optimization, you can definitely build a solid Merch by Amazon income stream.

It may take some trial and error to figure out which shirts sell best…but the more you learn about your merch analytics and dial in your process, the more success you‘ll have!

So now that you know the full scoop on Merch fees and how the royalty structure works, you can make informed business decisions if you want to sell shirts on Amazon.

I hope this guide gave you everything you need to get started with Merch by Amazon! Let me know if you have any other questions.