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Comprehensive Guide to Amazon Seller Fees

Comprehensive Guide to Amazon Seller Fees

Meta Description: Amazon fees can add up fast. Learn about referral fees, FBA vs. FBM costs, storage charges, and tips to reduce fees. A beginner’s guide to Amazon seller tips for maximizing profit on Amazon.

Introduction:
Selling on Amazon gives you access to a huge customer base, but it’s crucial to understand the fees involved so there are no surprises. Between Amazon’s commission on each sale (referral fees), shipping and fulfillment costs, and various optional services, fees can eat into your profit if you’re not careful. In this guide, we’ll break down the main types of Amazon seller fees in 2025 and show you how to plan for them. We’ll also share smart strategies to minimize costs – from bundling products to negotiating with suppliers – so you can keep more of your earnings. Understanding these fees is a key part of being an Amazon seller.

Account Types and Selling Plans

First, note that Amazon has two selling plans that affect how some fees are charged:

  • Individual Seller Plan: No monthly subscription fee, but you pay $0.99 per item sold. This plan also lacks some advanced seller tools. It’s best for hobbyists or those selling fewer than 40 items a month.
  • Professional Seller Plan: $39.99 per month (flat fee) with no per-item fee. You get full access to all seller tools (bulk uploads, detailed reports, advertising options, etc.). If you plan to sell more than ~40 items a month or want access to more tools, the Professional plan is worth it.

Aside from the difference above, all other fees (like referral fees and shipping fees) generally apply to both plans.

Amazon Referral Fees (Commission per Sale)

The referral fee is the percentage Amazon takes from the total sales price of each item (item price + shipping, if you set shipping). This fee varies by category of product. In most categories it’s between 8% and 15%. A few examples:

  • Electronics (like TVs, cameras): 8%
  • Toys & Games: 15%
  • Clothing & Accessories: 17% (and Amazon has lower rates for very low-priced clothing items to help those sellers)
  • Books: 15%
  • Jewelry: 20% (on the portion up to $250, then it drops to 5% on any amount over $250)

Amazon also has a minimum referral fee of typically $0.30. This means if your item is super cheap, you’ll still pay at least 30 cents. For instance, selling a $1.00 item in a 15% category would normally be $0.15 fee, but Amazon will charge $0.30 due to the minimum.

Quick math example: Imagine you sell a kitchen gadget for $20 and the referral fee for that category is 15%. Amazon will keep $3.00 as the referral fee, and you’ll have $17.00 left before other costs.

Fulfillment Options: FBA vs. FBM

Beyond referral fees, how you fulfill orders affects your costs significantly:

  • FBA (Fulfillment by Amazon): You ship your inventory in bulk to Amazon’s warehouses. When orders come in, Amazon picks, packs, and ships them to customers. They also handle customer service and returns for those orders. You pay FBA fees for these services.
  • FBM (Fulfillment by Merchant): You list on Amazon, but you store your products and ship each order yourself (or via a 3PL warehouse you manage). You handle customer service and returns. You don’t pay FBA fees, but you have your own shipping costs and time to consider.

Prime eligibility: Products fulfilled by Amazon (FBA) automatically get the Prime badge (fast shipping for Prime members). FBM items can get Prime if you enroll in Seller Fulfilled Prime (which has strict requirements), otherwise they won’t be Prime-eligible. Prime items often sell better due to customer trust and fast shipping, so many sellers use FBA for that advantage.

There are trade-offs: FBA adds fees but can boost sales and save you time; FBM gives you more control and can be cheaper for very large items or slower sellers (to avoid storage fees). You can even do a mix and see what works best for your business.

FBA Fulfillment Fees

If you choose FBA, you’ll pay a fulfillment fee for each unit sold. This covers picking and packing the order, shipping it out to the customer, and handling basic customer service/returns. The fee is based on your item’s size and weight:

In general, fulfilling a small item might cost around $3, while a heavier or oversize product could cost $9–$10 or more. Amazon publishes detailed fee tables by size and weight, but the key point is: bigger/heavier = higher fee.

For example, a standard-sized item under 1 lb may have a ~$3 FBA fee. A 5 lb item might be around $5–$6. If you sell an oversized item (say a large microwave), the fee might be around $10 or more. Apparel items have an extra surcharge of about $0.40 per unit due to special handling (clothing tends to need bagging, etc.).

2025 Update: Amazon kept FBA fees stable and even introduced some incentives (like waiving certain inbound shipment fees for new products). In short, FBA costs in 2025 are similar to 2024, with small improvements for sellers. For instance, new-to-FBA products enrolled in Amazon’s program get free inbound processing for the first batch, and some bulky item fees were slightly reduced. Always check Amazon’s latest fee announcement pages for any recent tweaks.

Storage Fees (FBA Warehousing)

Using FBA means Amazon is storing your inventory, and they charge you for that space. Storage fees are charged monthly based on volume (cubic feet) your products occupy, and they vary by season:

  • Standard-size products: Roughly $0.75–$0.87 per cubic foot per month for storage from January through September, rising to about $2.40 per cubic foot in October–December (holiday season peak).
  • Oversize products: Around $0.55 per cubic foot off-peak, increasing to about $1.40 in Q4.

These fees are calculated on your average daily volume in Amazon’s fulfillment centers each month. Amazon provides tools to see your inventory volume.

In practice, small items cost only pennies per month in storage. But large items or holding a lot of inventory that isn’t selling can rack up costs, especially during Q4 when rates increase.

Long-Term Storage Fees: If an item sits in Amazon’s warehouse for over 365 days, Amazon applies an extra fee to that item. It’s about $6.90 per cubic foot (or $0.15 per unit) for long-stored goods, charged monthly for items aged 365+ days. This is basically a penalty to discourage sellers from using Amazon as a long-term storage solution. To avoid this, you can use Amazon’s Inventory Age report and plan to remove or dispose of old stock that isn’t selling, or run a sale to clear it out.

Other Common Amazon Fees

  • Closing Fee (media items): If you sell media products (books, DVDs, CDs, video games), Amazon charges an additional flat $1.80 closing fee per item sold. This is on top of the referral fee. (This only applies to media categories.)
  • Refund Administration Fee: When you issue a customer a refund for an order, Amazon gives you back the referral fee you paid minus a small portion. Specifically, they keep 20% of the referral fee (up to a maximum of $5). Example: if you refunded an order where you paid a $3 referral fee, Amazon would keep $0.60 and return $2.40 to you.

These fees are just part of doing business and should be considered when you set your prices.

Optional Service Fees

These are fees you only pay if you opt into certain services or conveniences:

  • Labeling Service: Amazon requires each FBA item to have a scannable barcode (either the manufacturer’s UPC or an Amazon FNSKU). If your products don’t have barcodes or you prefer to use Amazon’s barcode, you can have Amazon label each unit for you for $0.30 per unit. You can avoid this fee by printing and applying your own FNSKU labels before shipping your inventory to Amazon.
  • Prep Service: If your products need poly bagging, bubble wrapping, or other prep to be warehouse-ready, Amazon offers to do it for a fee (typically about $1–$2 per unit, depending on what’s needed). For example, a glass item might need bubble wrap – Amazon will charge for that. You can also do this prep yourself according to Amazon’s guidelines to save money.
  • Advertising (PPC): While not a fee in the same sense (it’s more like optional spending), it’s worth mentioning. Amazon’s Sponsored Products ads run on a pay-per-click model. You might spend, say, $0.50 every time someone clicks your ad. Advertising can increase your sales, but you should monitor it so that it doesn’t eat all your profits. Many sellers aim for their ad spend to be around 10%–15% of their revenue, but it can vary widely.

Example: Fees on a $20 Sale

For a product sold at $20 via FBA, suppose the referral fee is $3 (15%) and the FBA fulfillment fee is about $3.20. If your item cost $5 to produce and storage was $0.05, you’d have about $8.75 left (before advertising). If you spent roughly $2 on PPC ads for that sale, your final net profit would be around $6.75. That’s roughly a 34% profit margin.

In this scenario:

  • Amazon’s cut (referral+FBA) is about $6.20.
  • Your costs (product + ads + storage) are $7.05.
  • You keep $6.75.

This example shows why you need to account for all fees and costs when pricing your product. It can still be very profitable to sell on Amazon (a 34% margin is pretty good), as long as you plan for these fees in advance.

Special Case Fees

  • Unplanned Service Fees: If your FBA shipment arrives and isn’t prepared according to Amazon’s requirements, Amazon will fix it and charge you. For example, if units needed poly bags or labels and you didn’t do it, Amazon will do it and charge the same fees mentioned in the prep/labeling section (like $0.30 to label an item, $1+ to bag or bubble-wrap an item). Avoid these by following Amazon’s FBA prep guidelines carefully before sending your shipment.
  • High-Volume Listing Fee: Amazon charges this only if you have an extremely large catalog. It’s a fee of $0.001 per SKU per month for each active SKU beyond 1.5 million SKUs. Most small/medium sellers will never reach that level of listings, but very large retail catalog sellers might.
  • Removal/Disposal Fees: Not mentioned earlier, but if you decide to remove inventory from FBA (have it sent back to you or disposed of), Amazon charges a small fee per item (around $0.25–$0.60 depending on size) to do that.

By being aware of these, you can avoid surprise charges. For instance, regularly check inventory age to avoid long-term fees, and prepare shipments correctly to avoid unplanned prep fees.

Tips to Reduce Amazon Seller Fees

Amazon’s fees are mostly fixed, but there are ways to minimize their impact:

  • Bundle Products: Selling a multi-pack or kit can lower fees per unit. For example, instead of selling one item for $10 each (and paying referral and FBA fees on each sale), you sell a 2-pack for $20. You still pay a referral fee on $20 and one fulfillment fee for one package – which is often less than the fees for two separate sales. Bundling is a clever way to increase your average order value and dilute the per-unit fee cost.
  • Manage Inventory Levels: Avoid sending in drastically more stock than you can sell in a reasonable time frame. Excess inventory leads to higher storage fees and potential long-term fees. It’s a balance – you want enough stock to avoid running out (which can hurt sales rank), but not so much that it sits for a year. Use the tools Amazon provides (like the Inventory Performance Index and Inventory Age reports) to guide you. Remove or liquidate stale inventory that isn’t moving.
  • Negotiate with Suppliers: Reducing your product cost (cost of goods) is one of the best ways to improve your margins, since Amazon’s percentage-based fees won’t change with your cost. If you can order larger quantities or find more efficient manufacturing, do it – a lower unit cost means fees take up a smaller percentage of your selling price, leaving you more profit room. Also consider negotiating better shipping rates if you fulfill some orders yourself.
  • Optimize Product Size & Weight: If there’s a way to slightly redesign or repackage your product to make it smaller or lighter, that can bump it down to a cheaper FBA fee tier. For example, if your item is just over a size threshold, see if a more compact packaging brings it under. This can save you maybe $0.50 or $1 per sale, which adds up. Similarly, avoid unnecessarily heavy packaging materials.
  • Use a Profit Calculator/Analytics: It’s hard to reduce fees if you don’t know where your money is going. Use Amazon’s own Revenue Calculator (available in Seller Central or via search) to plug in your item price, cost, and see all the fees broken down. There are also third-party tools and spreadsheets that can track your actual profits after fees. By closely monitoring this, you might discover, say, one product has much slimmer margins than you thought once ads and fees are accounted for. You could then decide to raise the price, lower ad spend, or even drop that product in favor of a more profitable one.

Implementing these strategies can significantly improve your bottom line on Amazon. Lowering costs and raising efficiency is just as good as increasing sales when it comes to profit.

Final Thoughts

Amazon’s platform provides incredible reach, but it’s essential to factor in all the fees so you can price products correctly and run a profitable business. The good news is Amazon’s fee structure is transparent – once you learn it, there’s no mystery. Treat fees as a predictable part of your cost of doing business on Amazon, and work them into your margins from day one.

By managing inventory wisely, cutting unnecessary costs, and optimizing every part of your operation, you can maximize profit on each sale. And remember, boosting your sales can also offset fees due to volume and better economies of scale. One way to boost sales is by maintaining a great product rating. If you’re being hindered by manipulated or unfair negative reviews, Review Magic can help. We specialize in white-hat Amazon review removal to keep your product’s reputation clean – and we only charge when a removal is successful. Higher ratings often lead to higher conversion rates, which means more sales and profit to counter those Amazon fees.

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