Gain insight into the costs of selling on Amazon, including fees, commissions and other expenses, to optimise your business on the platform.
Thomas Hjul Alstrup
We are often asked by businesses who are new to Amazon as a platform: “What does it actually cost to sell your products on Amazon?”
This question is entirely understandable and natural to ask. However, there is no simple, one-size-fits-all answer, as the cost of selling on Amazon can vary considerably from case to case. Below, we highlight some of the most common costs associated with selling your products on Amazon that we believe you should pay particular attention to.
Monthly seller account fee
When you create a Professional Amazon Seller Central Account, Amazon charges a monthly fee of 39.99 USD. If you estimate that you will typically sell fewer than 40 units per month, you also have the option to forgo the monthly fee and instead pay a fee per item sold of 0.99 USD. However, by opting out of the monthly fee, you also lose certain benefits (such as advertising options), which is why we almost always recommend setting up a professional seller account and paying the monthly fee to Amazon.
For every unit you sell through Amazon, you must pay a fee (the so-called “Referral fee”). The amount of this fee depends, among other things, on the product category your items belong to. Within your Seller Central Account, you can always see the exact referral fee for each of the SKUs you have created in your inventory.
If you – like most of our clients – choose to sell your products using FBA (Fulfilment by Amazon), where you send your products to one of Amazon’s warehouses and Amazon’s staff handle all practical order processing (handling, dispatch, returns), Amazon charges you a fee for these services. The amount of this fee depends on the size and weight of the package. You can always choose to handle all logistics yourself by selling your products as FBM (Fulfilment by Merchant). In addition to the extra resources you would need to allocate for this, you will not be able to offer Amazon customers Prime (free shipping and guaranteed delivery within two days), which is something Amazon customers generally value highly. Therefore, as a rule, we recommend opting for the FBA solution.
To give yourself the best possible chance of success on Amazon, we strongly recommend allocating resources for advertising on Amazon. The organic sales you can achieve through well-written, SEO-optimised copy and attractive content on your product pages and in your brand store will almost never be enough on their own. You will therefore need to set up well-structured campaigns to attract even more Amazon users to your product pages. How much you should allocate for this part of your Amazon sales journey depends largely on the competition for the keywords or advertising space you are targeting on Amazon’s platform.
We often find that business owners underestimate the resources required for the daily management of their Amazon seller account. All sellers will inevitably encounter various unforeseen challenges on Amazon that can hinder their sales and need to be resolved. Depending on your level of experience as an Amazon seller, many challenges can quickly consume a significant amount of time that you may have planned to use elsewhere. That is why we always recommend, before you begin selling on Amazon, considering partnering with an experienced Amazon agency such as WeMarket, who can help you solve these challenges more quickly and efficiently than if you go it alone. At the same time, even basic tasks such as account or product setup can quickly become extremely resource-intensive if you do not have much prior experience with Amazon.
If you would like help to increase your sales on Amazon, feel free to email us at kontakt@wemarket.dk/coukxx or call us on 70 44 42 88.
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