Being on Amazon can be a real plus for your business. This can allow you to give additional insight into your products, or even just start your e-commerce business without worrying too much. But you have to keep in mind that there is a counterpart to all the benefits that Amazon can offer you. This is how the famous American platform chose to impose a certain number of fees and commissions on sellers. What are the costs of selling on Amazon? Is it worth it? Find answers to your questions in this article.
How is Amazon paid?
First of all, to understand where these fees come from, you need to know how Amazon compensates itself. When you have a list of all the fees that Amazon charges, you will quickly understand how Jeff Bezos became a billionaire.
It’s a bit like Amazon’s business: the fees. In fact, this makes perfect sense when you think about it. The platform has a certain vision and a certain reputation, If you want to sell it, you pay for. Until then, nothing rocket science. Amazon is a the shop, or in the French “market”. This allows us to quickly compare the market in which you have to pay for your site to sell your products. Obviously we are on the same principle here.
However, it is not that simple. Yes, we have to Pay for a subscription to sell on Amazonbut besides that there Many additional costs, which means that we are not only really “paying for our site”. Already, in addition to signing up, Amazon gets a commission on every sale. And, Depending on the product you sellAmazon takes a large share or less. You also have to take into account that you face minimal selling costs, which penalizes you severely when you sell items at very low prices.
Amazon is also compensated through advertising fees. This means, summing up, that some sellers pay more for their offering than others. We can also calculate the difference FBA related fees Where Amazon manages all the logistics of the products sold. Even if it costs them money to build warehouses, store and ship your products, they still cover their costs. Otherwise, they certainly wouldn’t deliver.
Now find out in detail what costs you may incur when selling on Amazon. Some are mandatory, others only happen in certain situations (subscription type, product type, additional features, etc.).
Subscription / Sales plan: Pay for your presence on the Marketplace
Let’s start with the basic graphics. It is of course about Subscription, without which you will not be able to publish your products. It is one of the costs that occur before the sale and that It doesn’t change completely. Whether you sell children’s products or musical instruments, the price will remain the same.
When you want to start selling your products on Amazon, you can choose between two types of accounts: individual account and professional account. If you are a company with minimal goals and ambition, in 99.99% of cases it will be better to choose the Professional plan. And if you are an individual, a single account can be practical, but it remains very restrictive. Here are the points that distinguish these two types of accounts:
- Individual: With this plan you don’t pay a monthly subscription, but you have Flat fee payable for each item sold. This is added to the classic selling costs which we will see later.
– €0.99 (excluding VAT) per item
– Less than 40 items are sold per month
– You do not intend to advertise
– Don’t plan to use in-depth sales tools
– It is possible to use FBA (not very profitable here)
– Many features not available
In other words, there are not many situations in which this plan would be useful or relevant.
- Professionals: This is kind of Plan is preferred if you plan to sell professionally, as its name indicates. In addition to this monthly price, all additional costs (sales, etc.) must also be taken into account.
– €39 (excluding VAT) per month
– More than 40 items are sold per month
– Ability to advertise and access to advanced selling tools
– Ability to sell in restricted categories
– Improved references on the site
– Unlocks all features not available with the Single plan (API, inventory management, bundled offers, promotions, multiuser, custom shipping costs, etc…)
In most cases, this is the plan that works best for your business if you have serious goals on the platform. If you sell 400 products per month, you can tell yourself that this fee is only 10 cents per item.
Selling Fee: Amazon Commission
Now let’s move on to the more complex fee for discussion: the selling fee. They are automatically added to the sales plan you chose when you create your account.
The accuracy of these fees, as mentioned earlier, is that it depends entirely on the type of product you want to sell on the platform. The percentage varies according to the products Between 7.21% and 46.35%. This is to show how much it has changed.
You can consult them here.
According to the shipping method which you choose, the selling fee will not depend on the same. Concretely, if you sell on FBA, i.e. you send your inventory to Amazon so that it takes care of the logistics, the percentage will be based on the article’s selling price.
Conversely, if you sell at FBM, i.e. you are the one managing the shipment, the ratio will be based on the item’s price + shipping costs.
You should also pay attention to Amazon Minimum Selling Fee In most categories. They can penalize you if you sell a product at a very low cost (example: 1 or 2 euros).
In all cases, Fee rates change by category and the same categories regularly, so it pays to stay informed of everything that’s going on. Here is the current selling fee schedule on Amazon.
FBA Fee (Fulfilled by Amazon)
You can choose to sell products on Amazon through their FBA system. Concretely, this means that you send them your inventory so they can take care of it andThey handle shipping, returns, etc… This is very useful if you do not have the time or means to manage this on your own. In addition, your products will therefore be eligible for Prime delivery, which can be an advantage when selling.
FifthHere are the costs you incur when selling by FBA (Fulfilled by Amazon) :
- Storage costs
- Long-term storage fee
- Shipping costs
- Removal application fee
- Returns processing fee
- Unexpected service fee
- Optional Service Fee
- breakage/loss costs
- Payment Fee
Let’s take a closer look at these fees:
Storage and long-term storage fees
Storage costs cannot be avoided if you entrust them with logistics. These charges will be billed to you in the middle of the month following the month for which the charges apply.
They depend not only on the type of product but also on the time of year Where your products are stored. From October to December, prices are higher, probably because of holidays. In France, it will cost between 15.60 euros and 36 euros per cubic meter per month depending on the time of year and category (for non-hazardous products). Note that clothes storage is a little less than standard products, as are oversized products. For hazardous materials, our prices range from €25.75 to €41.23 per month and per cubic meter (in France).
It is also necessary to planPotential long-term storage costs. We’re talking about how long once your item has been kept for more than 365 days in the Amazon warehouse. Here we are facing very high costs, we advise you to successfully sell your products one year before stocking. The price is actually €175.10 per cubic meter per month, which is on top of basic storage costs.
As of April 2022, a change in shipping rates and weight classes should be noted. These rates will not be taken into account here.
Returns processing and refund fees
In the event that a customer wants to return a product that was sold in FBA, they have 45 days to do so. If it is done at the right time, then it is The seller is responsible for paying the return costs which is equal to the basic shipping cost.
Then, if the client wishes to receive compensation for his article, Then Amazon keeps 20% of the various costs. However, this amount cannot exceed 5 euros per item.
Direct Debit Fee
Collection charges may arise if the product needs to be returned to you. For example, this can happen when a customer returns a broken product that cannot be put back into stock. These vary by item weight. For a standard size product, you pay between 25 and 50 cents less for 1 kg and then 40 euro cents for a kilogram. For a bulk product, the price is set between 50 cents and 3 euros for less than 5 kg, then 40% for a kg.
You can also order the liquidation of the product, that is, its destruction. The price is the same for standard size samples.
Occasionally, Amazon or one of its associated carriers may lose your valuable product. It’s a very common thing in logistics after all. Either Amazon offers to replace your product with another with a similar reference, or it compensates you.
Other optional fees
In addition to the various “compulsory” fees we saw above, there are also other types of fees, which are slightly more optional.
For certain types of products, there is a so-called “closing cost”. It is 61 cents per item and applies to the following categories:
- a musician
- Video games
There is actually no explanation regarding these fees.
If you want to sell in very large quantities on Amazon, you will obviously have to factor in the new costs. We’re talking here at SKU: “Stock Keeping Unit”. 1 SKU corresponds to the product’s unique reference, a code that identifies it and allows inventory tracking. If you import less than 1.5 million SKUs, you will not pay any fees. Above this figure, you will incur costs of around €0.0004 per reference.
Amazon advertising costs
As we explained at the beginning of the article, it is complete You can pay to improve your vision on the platform. There are different types of ads on Amazon, which operate on a cost-per-click basis. We can see some similarities between running Amazon ads and those of Google ads. In fact, Amazon is a kind of search engine. Here are the different types of ads that are possible:
- Sponsored Products: Sponsored Products in search results
- Sponsored Brands: The product banner in search results that highlights the brand
- Trailer: Sponsored display on custom spaces
Now you know what you have to pay to get the privilege of selling on Amazon. If you have any comments to share about this cartoon, feel free to tell us in the comments or on our social networks.