selling on Amazon

What Does Amazon Take From Sellers?

If you’re selling on Amazon your profits make could be greater than the costs of selling to cover for selling on the platform. But selling on Amazon can be quite heavy on your budget! Amazon has different kinds of fees, which are classified differently based on the methods used to make the selling. That’s the way Amazon earns its earnings that amount to millions of dollars!

Did you have the knowledge that Amazon unique visitors count has already passed the mark of 200 million within the first month of the US? July reports from Statista have revealed that the total monthly number of visitors in the US increased by 213.56 million on Amazon. Learn more about the various fees Amazon demands from its sellers!

Amazon Seller Fees

Amazon will charge sellers a significant amount for its services. Here’s a look at the different types of charges you will be required to pay should you choose to utilize Amazon’s platform to boost your revenue and sales.

1. Monthly Subscription

A monthly fee for subscription is the initial cost that you pay when you sign up as an seller. The amount you pay for this fee will depend on the kind of account you’ve created with the enterprise account Professional or Individual account. Both accounts are set on a monthly schedule. The Professional account is $39.99 each month. For Individual accounts, however, Amazon will charge the retailer $0.99 per sale.

Here’s some interesting facts The proportion of direct traffic that is registered through Amazon.com is 57.09 percent.

The Professional account offers certain advantages over the individual account, such as order and inventory management using reports, performing API functions via Amazon Marketplace Web Services, uploading items in bulk and offering gift wrapping options for items, the option to determine US sales, and applying tax on orders that are received and so on. It is not recommended to join an account that is professional if the number of number of items sold each month is under 40. If you are using individuals accounts, there is no fees for subscriptions since the sellers are paid in accordance with the amount of products sold.

Read more: What Does Amazon Take From Its Sellers 

2. Fees relating to sales

There are three kinds of sales-related charges that sellers must pay to Amazon. The first one is called that of the Referral Fee. The fee for referrals is paid each time you sell an item via Amazon and is greater than the commission you earn per transaction. The fee for referrals isn’t set and it is contingent on the product being sold. It’s generally a flat fee that is calculated at 15 percent or less according to the item. Certain categories of goods are assigned schedules of referral fees. In these cases the fee percentages will be calculated as dollars based on the amount of sales.

The other type of sales-related fee is the variable closing fee that is charged to sellers who sell items in the category Media. This includes video and computer games as well as gaming consoles, software, BMVS (Books, Music videos, DVDs, and Books) and many more. Selling these items costs vendors an additional $1.80 as a adjustable closing cost. Did you have the knowledge the fact that Amazon Prime Video has crossed more than 150 million users by 2021? The Business of Apps reports claim that there will be 175 million users on Amazon Prime Video as of 2021.

The third category is called the Refund Administration Fee, which is charged on items returned. If any of the items sold by you are rejected by buyers, you will receive the referral fee along with any other charges you paid Amazon for the sale. You will need to pay the refund administration cost which is $5.00 or calculated at 20 percent on the amount of referral fees for the item. Amazon will collect the lesser amount.

3. Fulfilled through Amazon (FBA) Costs

It is the FBA (Fulfillment via Amazon) charge is one comprised of three kinds. The first kind that is part of the FBA fee is called the charge for order fulfillment and is based on the dimensions of the product being sold. The weight and size of the item are considered when calculating the fee. Products that weigh less than or equivalent to 10 ounces are assessed $2.41 every item. Items that weigh more than 90 pounds are assessed $0.79 for each pound.

The other type will be the storage cost that Amazon charges for the storage of your items within their facilities for storage. Amazon doesn’t offer the same price throughout the year. Instead, it splits it into two times from January to September, where costs for the month are $0.69 for each cubic foot and from October until December when charges rise from $2.40 for every cubic foot. However, the charges are lower in the case of large-sized items.

The third kind of FBA fee is the one that is charged if products are kept in the Amazon warehouses for too long. They are FBA storage charges for long-term storage that are charged twice per year, if you aren’t in a position to sell your items. The fees are calculated on the 15th of February and 15th of August in the event that the product has been stored by Amazon for more than 6 and 12 months, respectively.

4. Fulfilled By Merchant (FBM) Fees

FBM also known as the Fulfilled by Merchant fees are like the FBA fee, but they are less expensive because the seller is accountable for the process of shipping. The FBM fees may be an expense for sellers who have individuals accounts since at times the total cost of shipping that sellers are required to pay could be more than the amount of shipping credits.

In the case of Professional accounts The FBM fee isn’t so strict since as a seller, you have the option of choosing the shipping costs you want to use. But, this applies to items offered within BMVD. BMVD category. In this instance, sellers are given the credit for shipping by Amazon. The credit is the equivalent to the shipping rate and the flexibility of the cost is dependent on the shipping method used.

Have you heard that Amazon profits grew to $10 billion in only two years? According to figures published from Business of Apps, the annual total profit for Amazon during 2018 was less than $10 billion, and it grew to $21.33 billion by the end of 2020.

5. Additional Fees

Apart from the four types of fees charged by sellers There are additional charges that can be classified as non-essential, and are generally considered minor charges by Amazon since they aren’t required to be paid for all sellers. The most common fees are like this:

  • Shipping service charge This cost is charged to repackage specific items that might be returned by buyers, and the original packaging might be damaged. Amazon will repackage the item and collects a fee from its seller.
  • A second FBA fee A further amount in addition to the FBA fee could be imposed by sellers for items classified as hazardous. For items that are standard in size the fee ranges from $0.06 up to $0.16 for each unit.
  • Rentals of textbooks Textbook rentals in HTML2 –This cost is imposed by the sellers who distribute textbook rentals via Amazon. For each sale, each rental is charged $5.00 per.
  • Categories for refurbishment This charge applies to products that are intended to be resold as they aren’t brand new. However, if the item isn’t eligible for refurbishing, a cost is charged by the seller.

Here’s some additional interesting data According to Macrotrends Amazon recorded an increase in its valuation of 67% between March 2020 through March 2021. In addition, the valuation increased between $172 billion and $1.5 trillion by March 2021.

Also Read: 5 Ways in Which E-commerce Has Revamped The Way We Market 

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