Get an overview of all costs involved in selling on Amazon, from referral fees to FBA, and learn how to maximise your profit.
Jens Vittrup
If you are considering starting to sell on Amazon, it is crucial to understand the platform’s fee structure. Amazon charges various fees for access to their vast customer base, but the exact costs can vary significantly depending on your business model, product category and sales strategy. In this article, we dive into all the details about Amazon fees and give you a clear overview of what it actually costs to sell on Amazon.
As a seller on Amazon, you will encounter a range of different fees, including referral fees, monthly account fees, fulfilment costs and more. By understanding these costs in advance, you can better plan your pricing and ensure that your Amazon business remains profitable.
The first choice you need to make as an Amazon seller is which subscription plan best suits your business. Amazon offers two primary account types, each with its own cost structure:
For most serious business sellers, the Professional Seller plan is the obvious choice, as the monthly fee quickly pays for itself by eliminating per-item fees and providing access to more Amazon Seller Central features that can help boost your visibility and sales.
Regardless of which seller plan you choose, you will always have to pay a referral fee to Amazon. This is essentially Amazon’s commission for connecting you with their customers. The Amazon referral fee is a percentage of the total sales amount (including product price and shipping) and varies depending on the product category.
Most categories have a referral fee of around 15%, but it can range from 8% for PC components up to 45% for Amazon devices and accessories. Here are some examples of Amazon referral fees for popular categories:
These referral fees are one of the main ways Amazon earns revenue from their marketplace. When calculating your product pricing, it is essential to factor in these fees to ensure you can still achieve your desired profit. The Amazon referral fee is calculated by multiplying the total sales price by the relevant percentage for your category.
Fulfilment by Amazon (FBA) is a service where Amazon handles warehousing, packaging, shipping and customer service for your products. This is a popular option for many sellers, but it comes with additional costs on top of the basic seller fees and referral fees.
Amazon FBA costs mainly consist of two types of fees:
There may also be additional FBA fees if your products remain in storage for a longer period (long-term storage), or if they require special handling. FBA is great for scaling your business, but it is important to calculate whether these extra costs still allow you to maintain a healthy profit margin on your products.
In addition to the basic referral fees and any FBA costs, you may encounter several other fees depending on how you structure your Amazon business:
These extra fee types do not affect all sellers, but it is important to be aware of them so you are not caught out by unexpected costs. Amazon provides a detailed fee overview in Seller Central, where you can view all current rates for your specific marketplace and product categories.
Creating an Amazon seller account is free, but you must choose a subscription plan to start selling. As mentioned, the Professional plan costs €39 per month, while the Individual plan has no monthly fee but instead charges €0.99 per item sold.
To set up a seller account, you will need the following information ready:
There are no direct costs for opening an Amazon seller account, but you should be prepared to start paying the relevant fees (monthly subscription or per-item fee) as soon as your account is active. For businesses considering selling on Amazon, it can be beneficial to consult with Amazon consultants, who can guide you through the entire setup process and optimise your fee structure.
One of the most common questions from new Amazon sellers is “What percentage does Amazon take?” The answer varies depending on product category, sales volume and your fulfilment method, but we can provide a general overview of Amazon’s share of your sale.
Let’s look at an example:
If you sell a product for €100 in the Home & Kitchen category:
In this scenario, Amazon takes between 15% (just referral fee for Professional sellers with their own fulfilment) and 21% (referral fee + FBA + per-item fee for Individual sellers) of your €100 sale.
On average, you can expect Amazon to take around 15-40% of your sales revenue, depending on product category, price and whether you use FBA. This percentage may seem high, but it is important to remember that Amazon provides access to millions of customers and handles much of the infrastructure necessary to run an online business. By implementing effective Amazon marketing you can increase your sales volume and therefore offset these fees.
In short: No, it is not free to sell on Amazon. Although there is no fee to create an account, Amazon will always take a share of your sales through referral fees and other charges.
The myth of free selling on Amazon may stem from the fact there are no upfront costs for creating a basic seller account (on the Individual plan). But even on this plan you pay €0.99 per item sold plus referral fees.
There is no way to completely avoid Amazon fees when selling on their platform. These fees are part of the business model and, in return, you gain access to one of the world’s largest online marketplaces with an infrastructure that would be extremely expensive to build yourself.
For Professional sellers, there is no extra cost to create and list products on Amazon – it is included in your €39 monthly subscription. For Individual sellers, it costs €0.99 per item sold, but there is no direct fee for creating the product listing itself.
However, there can be indirect costs associated with preparing quality product pages, such as:
These investments are not direct Amazon fees, but are often necessary to create competitive product listings. A strong product page with optimised content can dramatically improve your conversion rate and reduce your acquisition cost per sale, making your Amazon fees more manageable in the bigger picture.
While you cannot avoid Amazon fees entirely, there are several strategies you can use to reduce their impact on your bottom line:
By implementing effective Amazon advertising you can also improve your sales and spread your fixed costs over more units sold, effectively reducing your cost per sale.
When considering starting an Amazon business, it is important to look at both the direct Amazon fees and the broader business costs. Here is an overview of what you can expect to invest to get started:
Many new Amazon sellers start with a budget of around €3,000-5,000 for a smaller operation, while more ambitious launches may require €10,000 or more. These figures are, of course, indicative and depend heavily on your business model (private label, arbitrage, wholesale, etc.) and product category.
To minimise risk, you can start by selling on Amazon on a smaller scale, get to know the platform’s dynamics, and then gradually scale up as you gain experience and cash flow. Many successful Amazon sellers began with a single or a few products and reinvested profits to expand their range over time.
Calculating the Amazon referral fee is relatively straightforward, but it requires knowing the percentage for your specific product category. Here is a step-by-step guide:
For example:
For certain categories, there may be minimum referral fees, which means that even if the product is sold at a very low price, there will be a fixed minimum fee. For most categories, this minimum fee is around €0.30.
Amazon also offers a fee calculator tool in Seller Central, where you can get a more precise estimate of all fees, including referral fees, FBA costs and other relevant charges for your specific products.
When evaluating whether it is cost-effective to sell on Amazon, it’s helpful to compare their fee structure with other e-commerce platforms. Here is an overview comparison:
Amazon’s referral fees (typically 15%) are generally higher than eBay’s final value fees (around 10-12% for most categories). However, Amazon often offers better conversion rates and higher average order sizes for many product categories. eBay has lower monthly subscription costs but may require more active advertising.
With your own webshop, you don’t pay referral fees (15-45%), but instead have other costs:
Amazon’s advantage is the built-in customer base and trust, which often results in higher conversion rates. Your own webshop gives you greater freedom and control but requires significant marketing investment to achieve the same traffic level.
In many cases, businesses choose to use both Amazon and their own webshop in a multichannel strategy, giving them the best of both worlds. By taking an Amazon course, you can learn more about balancing different sales channels and optimizing your costs across platforms.
To provide a more concrete picture of the total costs of selling on Amazon, let’s walk through a detailed example with all relevant fees:
Let’s assume you are selling a kitchen product for €50 with the following parameters:
Cost breakdown:
Total costs: €15 (product) + €7.50 (referral) + €4.50 (FBA) + €0.39 (subscription) + €0.30 (storage) = €27.69
Net profit: €50 – €27.69 = €22.31
Profit margin: (€22.31 ÷ €50) × 100 = 44.6%
In this example, Amazon fees (referral, FBA, subscription, storage) amount to about €12.69 or around 25.4% of your sales price. This is a healthy profit margin, leaving room for additional costs such as returns, PPC advertising and any price reductions.
It is important to note that this analysis does not include costs for shipping products to Amazon’s warehouse, marketing expenses, or other business costs such as accounting and customer service. These factors should also be considered in a complete cost analysis.
Amazon regularly adjusts its fee structure, and historically there has been a tendency for fees to rise over time, especially for FBA services. Here are some strategies to future-proof your business against increasing costs:
Working with an Amazon agency can also be a valuable investment, as they stay up to date with all fee changes and can help optimise your strategy to minimise costs and maximise profit.
The ultimate question many potential Amazon sellers ask is: “Are the fees worth it?” The answer depends on your specific situation, but here are a few factors to consider:
For many businesses, Amazon’s fees are absolutely worth it due to the unrivalled exposure and sales volume the platform can provide. For products with healthy margins, where you can absorb 15-40% in fees and still remain profitable, Amazon can be a fantastic growth driver.
For low-margin or very heavy/large products, however, the fees can make it challenging to achieve profitability. In these cases, other sales channels may be more advantageous.
To maximise the value of your Amazon fees and effectively reduce their impact on your bottom line, you can implement these strategies:
By focusing on these areas, you can increase your Return on Investment (ROI) for the fees you pay to Amazon and build a more profitable and sustainable Amazon business.
Remember, Amazon’s fee structure is designed to reward high-quality sellers who deliver excellent customer experiences. By focusing on customer satisfaction and efficient operations, you can get more value from the platform and justify the costs.
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