amazon fees how they work and the upcoming changes 2018

Amazon Fees: How They Work and The Upcoming Changes (2018)

Sharing is caring!

We love selling on Amazon (duh). I mean, what’s better than access to billions of shoppers monthly? Of course, that service comes with a price. Not a crazy one! But a price nonetheless. Amazon fees are what makes the entire FBA process viable for Amazon. And frankly, what little they take is worth it.

Here’s a break down of the Amazon fees and what to expect.

At the end of this article, I will also cover all the changes to Amazon fees and how they could affect you.

Amazon Fees: The Basics

There are four kinds of Amazon FBA fees that come with selling by Amazon’s Fulfilled-by-Amazon network, plus the optional subscription:

  1. Fulfillment fees. This is the cost to pick, pack, and ship your product and is a flat cost based on the size and weight of your product. Prices change depending on what season it is. You can learn more about those fees by clicking here.
  2. Professional seller subscription (optional). If you choose to be a professional seller, something I recommend if you plan on selling 40 or more items at Amazon, then there is a $39.99 monthly subscription fee that you must pay. As a professional seller, you will not have to pay the per-item fee (see below).
  3. Amazon selling fees. Think of these like commissions Amazon takes for allowing you to sell your product to their customers and use their marketing. There are a few different categories of Amazon selling fees:
    1. Per-item fees. For those on the professional selling plan, there is no per-item fee. For those not on the professional selling plan, it is $0.99.
    2. Referral fees. Sellers pay a percentage on each item sold depending on what category the product is in. Items in several categories have a per-item minimum referral fee (i.e., sellers pay the greater of the referral fee or the per-item minimum referral fee).
    3. Variable closing fee. Some categories, like media products, have a variable closing fee in addition to referral fees.
  4. Storage fees. Products that Amazon stores in their fulfillment centers through the FBA program also have storage fees. There are two types of storage fees:
    1. Short term storage fees. These are products held by Amazon for 0 to 6 months.
    2. Long term storage fees. These are products held by Amazon for 6 to 12 months and have much higher rates than short term fees.

Amazon Referral Fees by Category

Categories
Amazon deducts the greater of the applicable referral fee percentage or applicable per-item minimum referral fee.See “Referral Fees” notes above.
Referral Fee Percentages Applicable Minimum Referral Fee(applied on a per-item basis unless otherwise noted)
Amazon Device Accessories 45% $1.00
Baby Products (excluding Baby Apparel) 15% $1.00
Books4 15%
Camera and Photo¹ 8% $1.00
Cell Phone Devices* 8% $1.00
Consumer Electronics 8% $1.00
DVD4 15%
Electronics Accessories 15% for the portion of the total sales price up to $100; and 8% for any portion of the total sales price greater than $100 $1.00
Furniture & Decor 15% $1.00
Home & Garden (including Pet Supplies) 15% $1.00
Kitchen 15% $1.00
Major Appliances 15% for the portion of the total sales price up to $300; and 8% for any portion of the total sales price greater than $300 $1.00
Music4 15%
Musical Instruments 15% $1.00
Office Products 15% $1.00
Outdoors 15% $1.00
Personal Computers 6% $1.00
Software & Computer/Video Games4 15%
Sports (excluding Sports Collectibles) 15% $1.00
Tools & Home Improvement 15%, except 12% for base equipment power tools $1.00
Toys & Games² 15% $1.00
Unlocked Cell Phones 8% $1.00
Video & DVD4 15%
Video Game Consoles4 8%
Everything Else³ 15%
Categories Requiring Approval Referral Fee Percentages Applicable Minimum Referral Fee
3D Printed Products 12%
Automotive & Powersports 12%, except 10% for tires and wheels products $1.00
Beauty 15% $1.00
Clothing & Accessories 15% $1.00
Collectible Books 15%
Collectible Coins See Category Requirements for referral fees.
Entertainment Collectibles See Category Requirements for referral fees.
Fine Art See Category Requirements for referral fees.
Gift Cards 20%
Grocery & Gourmet Food** 15%
Health & Personal Care (including Personal Care Appliances) 15% $1.00
Industrial & Scientific (including Food Service and Janitorial & Sanitation) 12% $1.00
Jewelry 20% $2.00
Luggage & Travel Accessories 15% $1.00
Shoes, Handbags & Sunglasses 15% $1.00
Sports Collectibles See Category Requirements for referral fees.
Watches 16% for the portion of the total sales price up to $1,500; and 3% for any portion of the total sales price greater than $1,500 $2.00

Amazon Fee Changes: February 22nd, 2018

Amazon’s making some sweeping changes to fees, mostly affecting those who are selling big/oversized items. If you’re a long time seller, definitely pay attention here because this could affect you. And if you’re a new seller, make sure you understand the Amazon fees before you list your first product.

Amazon Fees: What’s Changing

  • First, Amazon fee changes will now go into affect for the entire year. There will no longer be discounted rates during the high season of October through December.
  • Excluding small standard, large oversize, and special oversize items previously fulfilled by Amazon January through September, most tier rates have increased by under $1 each. Small oversize got hit the hardest, with a rate increase of $1.25 per unit.
  • Certain large oversize items and special oversize item Amazon fees actually went down. So there is some good news to this change!
  • Dimensional weight calculations as the unit of volume (length x width x height) will now be divided by 139 vs 166 as it previously was. This only affects oversize and large standard items.

Amazon Fees: What’s Staying the Same

  • Fulfilled-by-Amazon storage fees are staying the same for now, but we fully expect them to announce a change sometime in 2018.
  • Multi-channel fulfillment and the inventory placement service Amazon fees are not changing at this time.
  • The $0.40 charge for FBA clothing items will stay the same.
  • FBA small and light program rates will stay the same.

Amazon Fees Before/After February 22nd

Current January through September Current October through December On & After February 22, 2018
YEAR ROUND
Change
Standard Small (1 lb. or less)
Packaged item 12 oz. or less with longest side 15″ or less, shortest side 0.75″ or less, and median side 12″ or less
$2.41 $2.39 $2.41 +$0 to +$0.02 per item
Standard Large (1 lb. or less)
Packaged item 20 lb. or less with longest side 18″ or less, shortest side 8″ or less, and median side 14″ or less
$2.99 $2.88 $3.19 +$0.20 to +$0.31 per item
Standard Large (1 – 2 lbs.)
See above dimensions
$4.18 $3.96 $4.71 +$0.53 to +$0.75 per item
Standard Large (over 2 lbs.)
See above dimensions
$4.18 +$0.39/lb. above first 2 lb. $3.96 +$0.35/lb. above first 2 lb. $4.71 +$0.38/lb. above first 2 lb. +$0.53 to +$0.75 per item
-$0.01 to +$0.03 per lb. above 2 lbs.
Small Oversize
Packaged unit 70 lb. or less with longest side 60″ or less, median side 30″ or less, and longest side plus girth 130 inches or less
$6.85 +$0.39/lb. above first 2 lb. $6.69 +$0.35/lb. above first 2 lb. $8.13 +$0.38/lb. above first 2 lb. +$1.28 to +$1.44 per item
-$0.01 to +$0.03 per lb. above 2 lbs.
Medium Oversize
Packaged unit 150 lb. or less with longest side 108″ or less, and longest side plus girth 130″ or less
$9.20 +$0.39/lb. above first 2 lb. $8.73 +$0.35/lb. above first 2 lb. $9.44 +$0.38/lb. above first 2 lb. +$0.24 to +$0.71 per item
-$0.01 to +$0.03 per lb. above 2 lbs.
Large Oversize
Packaged unit 150 lb. or less with longest side 108″ or less, and longest side plus girth 165″ or less
$75.06 +$0.80/lb. above first 90 lb. $69.50 +$0.76/lb. above first 90 lb. $73.18 +$0.79/lb. above first 90 lb. -$1.88 to +$3.68 per item
-$0.01 to +$0.03 per lb. above 90 lbs.
Special Oversize
Packaged unit that exceeds one or more of the following: Over 150 lb. (dimensional weight or unit weight), over 108″ on longest side, or over 165″ when longest side is added to girth. Also includes products Amazon determines require special handling or delivery.
$138.08 +$0.92/lb. above first 90 lb. $131.44 +$0.88/lb. above first 90 lb. $137.32 +$0.91/lb. above first 90 lb. -$0.76 to +$5.88 per item
-$0.01 to +$0.03 per lb. above 90 lbs.

 

Before you launch your first product on Amazon

It pays to know your fees back and forth upside down and inside out. Be sure to bookmark this link. Additionally, for more tools on how to help you calculate your Amazon fees, be sure to check out Fetcher’s Amazon profit calculator which you can access with the button below.

. . .

And if you have any questions about Amazon fees, please feel free to ask in the comments below.

Sharing is caring!

9 Comments on “Amazon Fees: How They Work and The Upcoming Changes (2018)”

  1. Thanks for the useful info Dave!
    do you know how the “balance” algorithm works?
    I mean – Is there a way I can tell when does the advertising fees take place?

    1. Hey Guy,

      Not sure what you mean by the “balance” algorithm. As far as when the advertising fees take place, they usually hit after you a hit a benchmark, typically $500. So if you have $500 worth of clicks in 4 days, Amazon will immediately charge the card that you have on file or remove it from your balance (depending on how you’ve got it set up with Amazon).

  2. Hi Dave! Thanks for sharing! Very helpful! I’m just starting with Amazon and trying to understand all the fees they charge. I’m aware of 15% referral fee and $3.07 FBA (that’s the number I’ve been seeing around). What about the storage fee? Is it charged on monthly basis per item stored? Are its rates the ones you gave under “Amazon Fees Before/After February 22nd” table? Thank you in advance Dave!

    1. Storage fees come in three flavors.

      First, there’s monthly storage fees which come monthly. So if you keep your product there for 30 days you’ll pay that. I find mine usually come around the start of the month, roughly around the same time I pay any loose ad costs and my subscription fee.

      Then there’s the two types of long term storage fees and those are realized twice per year. These are the much more expensive fees: $11.25 for over 6 months and then $22.50 for over 12.

      So let’s say you have a product that’s been at an Amazon FC for 13 months. You will have paid the monthly fee 13 times, a long term storage fee for the 180 milestone and then another long term storage fee for the 365 day milestone.

      LTSF is Amazon’s way of saying, “Hey, it’s not selling… so it needs to go!” 😉

  3. Hi Dave,

    I’m using the Jungle Scout Pro extension to determine the approx cost to Amazon for FBA services. Wondering if you can explain what costs the “Fees” column in the extension includes. For example does this account for Storage, Fulfillment, Referral Fee, Variable closing fee etc. Trying to get a better understanding of how to calculate my total approx cost that will be paid to Amazon.

    Thank you,

Leave a Reply

Your email address will not be published. Required fields are marked *