Amazon offers a great marketplace to sellers who are willing to sell online, but it will take something in return. Amazon charges fees from its sellers in different ways. But I advise you to look at these fees and costs as an investment because here you get a larger audience to make sales.
Selling on Amazon: Costly or Cost-Effective?
For beginners, let us start with Amazon Seller Central selling plans: Individual and Professional. Amazon charges depending on the selling plan chosen by the Seller.
- Individual Selling Plan costs $0.99 per unit sold plus additional charges. Small sellers and vendors who sell less than 40 units per month can opt for this selling plan.
- Professional Selling Plan costs $39.99 per month plus additional charges. Big and medium sellers who sell 40 or more units per month can opt for this plan.
Selecting your selling plan wisely can be cost-effective for your Amazon business. Additional fees include referral fees, shipping fees, and inventory fees for FBA sellers. Still, selling through FBA is much more cost-effective than selling on your own. Also, selling through FBA has its own perks and advantages.
Amazon marketing services will add to your cost, but it will also add to your brand recognition, visibility, and sales. If you hire an Amazon marketing agency that is your cost too, but it will also be more beneficial and easier to achieve sales goals.
List of Costs for Amazon Seller
Selling on Amazon does not mean only paying for the selling plan is enough. In order to grow your Amazon business, sellers need to avail other services as well. Some services are mandatory, while some are optional. Sellers can take advantage of these services, but there is a cost attached to them. Sellers can be cost-effective if they use these services with optimum knowledge and proper execution.
Required Costs: The name itself suggests that these costs are compulsory to incur:
- Amazon Seller Subscription Plan
- Amazon Seller Fees
- Taxes (if applicable)
- Global Trade Identification Number for generating barcodes
Recommended Costs: These costs are optional to incur but are considered a great investment for future Amazon sales:
- Brand Registry or Registered Trademark
- Amazon Sponsored PPC Advertising
- Influencer Marketing
Extra Costs: These costs are optional to incur but can help your brand look professional and established:
- Branding
- E-commerce and Amazon SEO
- Amazon Marketing Services
Allot the budget based on these categories to prioritize your costs and related benefits.
List of Fees for Amazon Seller
Additional fees apply on the basis of the business. Fees vary depending on the type of products and the fulfillment approach.
- Referral Fees: Referral fees may range from 8 percent to 20 percent based on the product category.
- Fulfillment Fees: Fulfillment fees apply if the seller approaches the Fulfillment by Amazon (FBA) method instead of shipping by self. FBA fees are charged from sellers in order to manage the shipping, storing, picking, packing, delivering, managing returns, and more on behalf of the seller.
- Inventory Fees: Inventory fees apply only to those sellers who opt for the FBA method:
- Monthly Inventory Storage Fee: Fee charges differ for every item stored in Amazon Fulfillment Center based on its size measured per cubic foot.
- Long-term Storage Fee: Fee charged for items stored for 365 days and more.
- Removal Order Fee: Fee charged on shipping back or withdrawing of the item to the seller.
- Return Processing Fee: Fee charged when the customer returns the product.
- Unplanned Service: Fee charged on seller mismanagement of packing and shipping.
- Other Fees
- Rental Book Service Fees: $5 fee charged on renting per book.
- High Volume Listing Fees: Fee charged on high volume, non media listings that are not sold in 12 months.
- Refund Administration Fees: Fee charged for customer refunds.
Cost of Amazon Sponsored PPC Advertising
There is no fixed cost for Amazon advertising as it is based on the PPC method where spend is incurred by the Pay Per Click system. Sellers are required to allocate a budget to PPC advertising beforehand in order to avoid excess spending.
Understanding Amazon ACoS
Advertising Cost of Sales (ACoS) is measured with the help of Total Ad Spend divided by Total Ad Revenue multiplied by 100. Usually, sellers wish to have ACoS 30 percent or less for an ad campaign to be called successful.
Make Your Amazon Selling Cost-Efficient
As long as sellers consider Amazon costs and fees as an investment, they are going to benefit from it given that they incur efficiently and execute appropriately. Amazon sellers don’t need to be well versed with the Amazon Seller Central features. There are Amazon consulting and Amazon marketing agencies that can help you in making your Amazon business more profitable.
Let Sipransh Ecommgrowth handle your account management and listing optimization with its professional experience across the field of Amazon SEO, Amazon PPC, Graphic Designing, A+ Content, Brand Store, and much more.
