How much does it cost to sell on Amazon? Here are all the costs

What are the costs of selling on Amazon? Everyone who starts selling on the marketplace asks themselves this question. There are several expenses to face, and knowing them in advance can be decisive for planning your growth strategy and avoiding unpleasant surprises. In this article, we will review all the main cost items for selling on the world's most famous marketplace.

Before signing up for Seller Central, knowing how much it costs to sell on Amazon is essential to evaluate the feasibility and profitability of the project. It is absolutely indispensable to perform a careful margin analysis to understand which items to focus on and what kind of revenue to expect from the platform.

TO SELL ON AMAZON?

How much does it cost to open a shop on Amazon

To summarize, the costs incurred by an Amazon seller depend on:

• account type (Individual or Professional);

• type of products to be sold and their category;

• shipping method (Amazon FBA or seller-fulfilled);

• Advertising and promotion;

• Purchase/production price of the product, which obviously does not depend on Amazon.

Going in order, the first choice to make when you start selling on Amazon is between an Individual or Professional selling plan. Let's briefly analyze the main differences.

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Differences between Amazon Individual and Professional accounts

The Individual selling plan is usually recommended for those approaching online selling for the first time and/or having few products to market. The plan has no fixed costs, but it has several disadvantages. We discussed this in more detail in this article, but the main ones are:

• a fee of €0.99 is applied to every unit sold;

• it does not allow you to obtain the Buy Box;

• it does not provide access to Amazon reports;

• it does not allow product promotion with Amazon Advertising;

• it does not allow product uploads in certain restricted categories;

• it does not allow for adding a secondary user.

All of this is instead possible with the Professional selling plan, which has a monthly cost of €39 + VAT.

In the table below, we list the full differences between the two types.

Generally speaking, we cannot say that one selling plan is strictly preferable to the other. However, it is clear that the basic one is very limited. For those who want to achieve concrete results selling on Amazon, the Professional plan is, in fact, the only solution. We recommend the individual rate only for small sellers who want to experiment with the platform and begin to understand its mechanisms. In any case, you can change your selling plan with just one click in your Seller Central settings.

Amazon fees for sellers

We have analyzed the difference between the two selling plans, but obviously, this is not Amazon's only source of revenue. The marketplace charges a cost for every unit sold. But how much are the Amazon commissions?

In addition to the €0.99 for sellers who choose the basic account, there are two other types of commissions:

• Referral fee for each product sold (applied to both Individual and Professional plan sellers) based on price and category. The fee varies from 6% to 20% depending on the category, but for most products, it corresponds to 15.45% of the final price;

• Closing fee: this is an additional cost (to be added to the referral fee) for products in the "Media" category, namely Books, Music, DVD, Video, Software, and Computer/Video Games and Game Consoles.

How much does it cost to sell on Amazon with FBA service

Fulfillment by Amazon (FBA) is a program that can be used by both Individual and Professional sellers. It is a service for storage, packaging, shipping, customer service, and returns of products that the seller entrusts directly to the marketplace.

Amazon FBA obviously has a cost that varies based on the product's size, weight, and characteristics. Furthermore, the price list increases during the period between October and December.

In particular, the costs charged to the seller for using Amazon logistics are:

● a fulfillment fee. The price list is very detailed and reporting it all would be impossible, but it can be consulted on this page. The fulfillment fee includes placing the product in Amazon-branded packaging, shipping the product, and handling most of the customer service for questions regarding logistics and returns. As mentioned, lighter and less bulky products will have more advantageous rates. For smaller items with a sale price under €10, Amazon created the Small & Light program, which we discussed in this article;

● a monthly inventory storage fee for storing items in Amazon fulfillment centers, detailed in the table below.

• a packaging and labeling fee. This is an optional cost, as these are operations that the seller can manage independently.

Amazon FBA also allows the Prime logo to appear on your items, which is synonymous with efficiency and guarantee. In this article, we analyzed the FBA program in even more detail.

Amazon Advertising: how much does advertising cost on Amazon

All the costs listed so far would allow you to calculate your margins in an ideal scenario without competition, where it is not necessary to sponsor your products to gain more visibility and increase sales on Amazon. Unfortunately, this does not always match reality. In fact, it is often necessary to resort to promotional tools such as Amazon ADV, coupons, lightning deals, and much more to ensure greater visibility for your products. We have also dedicated a specific article to Amazon advertising.

What we can anticipate regarding costs is that, being Pay-per-Click campaigns, it is by definition impossible to calculate beforehand how much they will impact profits. However, it is possible to set a daily budget and consider it as a fixed cost to be sustained. Furthermore, it remains vital to conduct a careful margin analysis to understand how much room can be given to promotion without running into a loss.

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Conclusions

Selling on Amazon is the ambition of most companies, but to do so, it is first necessary to analyze all the costs that the platform implies, as well as define your goals. There are many variables to consider, and it is not easy to calculate them all.

If you have other questions regarding Amazon rates or want to start selling your products