22 May How much does it cost to sell your products on Amazon?
Several factors can determine the final cost that a seller has to bear when selling their products on Amazon; among them are the sales plan, the item category and logistics management. There are many ways to organise and structure these plans and services to make selling as productive and profitable as possible.
Below, we’ll explain these factors and what issues you need to consider to get the most out of your sales.
The sales plan you choose will depend mainly on the number of products you plan to sell and their categories. There are two different plans, the most basic being the Individual Plan where you pay a €0.99 fee per product sold, and the Professional Plan where there’s a fixed fee of €39. These prices don’t include the possible additional sales fees, which we’ll explain later.
While the individual rate is aimed at brands that sell less than 40 products per month, the professional rate is aimed at retailers with a wider reach and above all, more extensive management and organisational needs.
Regardless of the plan you join, you have to pay a referral fee for each product sold. This is nothing more than a percentage of the total sales price, which covers the cost of the product and its shipping and/or packaging.
The referral fee amount depends on the product category as the percentages vary depending on its nature. On the Amazon website, you can find a table with all the necessary specifications to know the cost of your products.
Logistics management fee
The costs related to logistics management depend on the product shipping plan you work with, either on your own or through Amazon Logistics services.
If you handle the shipping yourself, Amazon will charge these handling fees and then offer you the revenue in the form of shipping credit. Also, while sellers on the Professional Plan set their own shipping rates (except for books, music, video and DVDs, which have their prices published on Amazon), sellers on the Individual Plan set their own shipping rates according to the parameters set by Amazon.
If you use the Fulfilment by Amazon option, you only pay for the services you use, which are summarised in the logistics management fees (set at a fixed rate per unit, product type, dimension and weight) and the storage fee (calculated in cubic feet per month).
On Amazon’s website, you’ll find a section explaining in detail everything related to the different fees mentioned.
When you’re estimating the final costs that you’ll have to bear when selling on Amazon, don’t forget the ones we’ll discuss below. Some are fixed and others belong to optional programmes, but you should know all of them to make the best decisions about your sales process.
First of all, the additional sale fees are the following:
- Inventory charges: When you store inventory in an Amazon logistics centre, you should know that in both Amazon-only and multi-channel logistics, you may have to pay an extra charge for long-term storage or for exceeding the set quantity.
- High volume publishing fees: This is a fee you have to pay if you exceed 2 million SKUs in any given month.
- Refund handling fee: This fee is given in cases of refunds, as it’s a matter handled by Amazon and involves a charge of less than €5 or 20% of the applicable referral fee.
Also, within the optional programmes you can make use of the Amazon Advertising service to manage everything related to advertising your products and your brand on Amazon.
Similarly, you can also make use of Amazon Logistics, which we mentioned earlier. This consists of letting Amazon take full care of all shipments, returns and customer service management.
As you can see, there are many different services and consequent costs to consider when you start selling your products on Amazon. However, all of them are perfectly detailed and analysed on the sales website itself, and also at Nozama we help you to choose and use the best plan for you and we show you how to get the most out of it.