Warning: Undefined variable $base_urls in /home/digibigadmins28d/public_html/blogtemplete.php on line 79
Comprehensive Guide to Amazon Seller Commission Charges and Fees for Maximum Profitability
Explore our detailed guide on Amazon seller commission charges and fees. Understand different types of fees, learn how to calculate them, and discover strategies to optimize your profits on Amazon.
Table of Contents
Amazon Seller Commission Charges and Fees: A Comprehensive Guide
Selling on Amazon can be highly profitable, but understanding the various commission charges and fees is crucial to managing your costs and maximizing your profits. This guide will provide you with a detailed overview of the fees you may encounter and offer strategies to optimize your profitability.
Referral Fees
Amazon charges a referral fee for each item sold. This fee is a percentage of the total sales price, including the item price and any shipping or gift wrap charges. The percentage varies by category, typically ranging from 6% to 45%.
Fulfillment by Amazon (FBA) Fees
If you use FBA, you'll incur additional costs. These include fees for storage, order handling, picking and packing, weight handling, and returns processing.
Closing Fees
For media products like books, DVDs, and video games, Amazon charges a closing fee in addition to the referral fee. This fee is a flat rate per item sold.
Subscription Fees
Professional sellers pay a monthly subscription fee, while individual sellers are charged per item sold.
High-Volume Listing Fees
Sellers with high volumes of active, non-media product listings may incur additional monthly fees.
Refund Administration Fees
If you refund a customer, Amazon retains a portion of the referral fee to cover administrative costs.
Calculating Your Fees
To manage your finances effectively, you must accurately calculate the fees associated with selling on Amazon. Use Amazon's fee calculators and regularly review your fee statements to ensure transparency and control over your expenses.
Optimize Your Pricing
Ensure your pricing strategy accounts for all fees. Consider using dynamic pricing tools to remain competitive while covering your costs.
Leverage FBA
While FBA fees can be significant, the service can boost your sales through better visibility and Prime eligibility. Calculate whether the increased sales outweigh the additional costs.
Minimize Returns
Implement quality control measures and provide detailed product descriptions to reduce the likelihood of returns, thus avoiding associated fees.
Monitor Your Inventory
Manage your inventory efficiently to avoid long-term storage fees and ensure a steady cash flow.
Utilize Promotions and Advertising
Invest in Amazon’s promotional tools and advertising services to increase visibility and sales, helping to offset commission costs.
FBA Fulfillment Fees
Sellers who register for fulfillment by Amazon pay appropriate Amazon FBA fees. These cover shipping, storage, handling, exposure on Amazon and also removal and disposal fees all of which add to the cost to sell on Amazon. As you will see, e-commerce seller fees may, in some cases, exceed what you earn from a transaction. For more information refer "https://services.amazon.in/services/fulfilment-by-amazon/pricing.html" to know about Amazon seller commission and other charges as applicable to your product category.
FBA Fulfillment Fees for Small Size Items
Amazon selling plans and fees are structured. The FBA fulfillment fee for small sized items is Rs 10 for regional pick and pack fee per unit and Rs 20 per cubic foot per month as a storage fee.
FBA Fees for Standard Size Items
For standard size items, the pick and pack fee is Rs 15 and storage fee per cubic foot per month is Rs 20. Weight handling fee for first 500 grams is Rs 24 for local, Rs 30 for regional and Rs 55 for national. Each additional 500 grams up to 1 kg attracts fee of Rs 15, Rs 19 and Rs 25 respectively. Thereafter each additional kg attracts the fee of Rs 7, Rs 8 and Rs 13 respectively.
FBA Fees for Oversize Items
Similarly, pick and pack fees for oversize items are Rs 25 as pick and pack fee and Rs 20 as a storage fee. Weight handling fees up to 5 kgs are Rs 70 for local, Rs 85 for regional and Rs 135 for national shipping. Each additional kg attracts the fee of Rs 7, Rs 8 and Rs 13 respectively.
FBA Fees for Oversize Heavy and Bulky Items
Amazon FBA fee for oversize heavy and bulky items is Rs 50 as pick and pack fee and Rs 20 as storage fee per cubic foot per month for local and regional shipment. Weight handling up to 12 kgs is Rs 160 for local and Rs 240 for regional. Each additional KG carries a charge of Rs 3 and Rs 4 respectively.
FBA Fees for Removal Orders
Amazon FBA fees for removal are split into self-pickup, standard shipping, and expedited shipping. Small size items attract the charge of Rs 5, Rs 5 and Rs 15 respectively. Standard size items carry a charge of Rs 10, Rs 10 and Rs 30. Oversize items are charged at Rs 25, Rs 25 and Rs 50. Oversize heavy and bulky items are charged Rs 25 for self-pickup. It is charged on a per unit basis.
FBA Disposal Fees
FBA sellers must know Amazon selling plans and fees to price products right. This also means having an understanding of FBA disposal fee. Small sized items are charged at Rs 5, standard size Rs 10, oversize Rs 25 and oversize heavy and bulky items Rs 25. Amazon will charge 18% GST on all the above.
For Non-FBA
Sellers not in the FBA program pay Amazon fee when a sale is made and the rates vary according to Amazon parameters for each category and items within a category. For more detail refer "https://services.amazon.in/services/sell-on-amazon/pricing.html?ref=as_in_soa_sticky_nav_pricing".
Referral Fee
Referral fee 3% upwards depending on product category. For example, in media category books attract 13%, music 8% and video games 7%.
Fixed Closing Fee
Fixed closing selling on Amazon fee varies according to price range such as Rs 2 for items up to Rs 250, Rs 40 for items above Rs 1000 in value. Take a look at the table below:
Shipping Fee/Handling/Weight Fee
Other Charges
The cancellation charge of 8.5% and 18% GST on all fees are applicable and, as can be seen, the cost to sell on Amazon is high and margins are slim. If there are cancellations it will eat into your profits.
