What Does It Cost to Sell a Product on Amazon?
The answer is not as clear-cut as you might hope.
Firstly, Amazon has two primary channels for branded manufacturers who want to sell on the platform: Vendor Central, and Seller Central. While many more nuances exist, the simple definition is that Vendor Central is a wholesale relationship with Amazon, where they set the payment terms and final price.
On Seller Central however, a brand chooses the price they want to sell at. While this offers more control, it also means you need to consider more thoroughly what price you should be selling at, after taking into account all the fees included.
Here's a quick overview of the various fees that Amazon Sellers pay, including referral fees, fulfillment fees, and storage fees. We also have developed a handy Excel spreadsheet fees calculator that you can use for in-depth, line-item profitability calculations.
The Various Amazon Seller Fees
Referral fees all third-party sellers pay a referral fee, based on the final sale price of the product. Consider this as the commission Amazon charges you for logging a sale on their platform. For most products, this is a flat 15% of the price the customer pays. However, depending on the product category, this can be as low as 3% (for a $1,500+ watch) or as high as 96% (for protection plans and warranties).
You can check the referral fee rate here (Seller Central login required). Or even better, use our own fee calculator below.
Fulfillment fees. Using Amazon’s fulfillment network (called Fulfillment by Amazon or FBA) provides you with immediate Prime-eligibility on those products. In our experience at The Marketplace Institute and in managing hundreds of brands over 5 years at Bobsled Marketing, we always see an improvement in sales volume when a brand switches from merchant-fulfilled to FBA.
However, enrolling in FBA does introduce more costs to consider. These include:
- A fulfillment fee to pick, pack, and ship the product to the end consumer. This is based primarily on the size and weight of the product.
- Storage fees. Based on the length of time your inventory is sitting in Amazon's fulfillment centers; and also the volume of space the products are taking up. If you’re managing your inventory closely, this should be a relatively small portion of your fees.
Use Our Amazon Selling Fee Calculator
To make the task of calculating per-item fees simpler, we built out our very own bulk fee calculator. You can download (for free!) this Excel spreadsheet and by entering your product category, weight, dimensions, and list price, you can calculate the resulting fees for hundreds of products simultaneously with precise accuracy.
This is really the only way you can determine the total cost of selling products that are not yet in Amazon’s catalog. It includes all account standard FBA fees (referral, fulfillment, and monthly storage). Keep in mind that it doesn’t take into account less common fees like Small and Light program, long term storage, removal or returns, prep and packaging fees.