Do you ever feel overwhelmed by all the different fees Amazon charges its sellers? Are you worried you’re being charged for fees you don’t even know about? Do you feel like Amazon fees are cheating you out of your profits?
important to understand what the different Amazon seller fees are, and why you’re
being charged. Amazon fees don’t have to be complicated or frightening.
primary Amazon fees every seller should know about: storage fees, Amazon
fulfillment fees, and referral fees.
#1: Storage Fees
inventory storage fees are the fees you pay to have your products stored in
Amazon’s warehouse. Every month, Amazon will charge you a certain fee for every
individual item you are storing in their warehouse. The charge is based on how
many cubic feet of warehouse space your products are taking up. Make sure
Amazon has double- and triple-checked these measurements so you don’t get overcharged.
inventory storage fees will be charged between the 7th and 15th
of every month. Storage fees will also increase from October to December,
during the high-volume holiday season.
do you calculate your monthly inventory storage fees? First, measure the
dimensions of your product. These dimensions include the packaging. So, if you’re
selling a coffee mug, measure the box the mug is shipped in. Let’s say the
packaging for your coffee mug is 10x8x4 inches. When you multiply those
numbers, you’ll have the volume in cubic inches – 320. To convert that to cubic
feet, divide the number by 1728 (12x12x12). 320 divided by 1728 is 0.185,
making your product 0.185 cubic feet, which you can round up to 0.19.
standard rate is $0.64 per cubic foot. So, just multiply 0.185 cubic
feet by $0.64. That’s $0.12 a month. $0.12 per month might not seem like much, but
if you’re storing 20,000 coffee
mugs in Amazon’s warehouse, that’s $2,400.
Amazon Fulfillment Fees
Amazon Fulfillment fee is the money you pay Amazon every time you make a sale
and they package and ship your product and take care of customer service. So,
you pay this fee every time someone buys your product. This fee is based on two
things: the size of your product and the weight of your product. Based on these
numbers, products fall into two categories, standard size and oversize, and
each category has various subcategories. The fee you pay will vary based on
what category your product falls into.
you start complaining about Amazon Fulfillment fees, it’s important to realize
what a privilege and a benefit it is to have Amazon fulfill your orders for
you. You save time and avoid hassle by paying Amazon to prepare and ship your
products for you, and to deal with customer service and any returns. Customers
trust Amazon, and having your orders fulfilled by Amazon adds a level of
legitimacy to your sales.
#3: Referral Fees
referral fee is the fee you pay Amazon for the privilege of selling on their
platform. Shoppers trust Amazon, so selling your product on Amazon makes it
easier to get sales. There’s nothing wrong with starting your own e-commerce website,
but Amazon is the best place to start building your customer base. Essentially,
you pay for Amazon to refer customers to your products.
referral fee varies based on category. Typically, it’s 15%, but it can range
anywhere from 6% to 45%. Imagine you’re selling a product for $21. 15% of $21
is $3.15, so that’s your referral fee for that product. Amazon also has a
minimum referral fee of $1, so for every product you sell, no matter how
inexpensive, you’ll always have a referral fee of at least $1.
referral fee is based on the total price of your product, so if your product is
discounted, for example, the referral fee will adjust accordingly.
fees, Amazon Fulfillment fees, and referral fees are the three main Amazon
seller fees – but there are three other important fees that sellers often don’t
talk about enough.
#4: Long-Term Storage Fees
your product isn’t moving and it sits in Amazon’s warehouse for too long, you’ll
be charged. After six months, your normal storage fee will increase, and after
it will increase again.
avoid paying massive fees for long-term storage, be aware of how fast your
inventory is going to move and know how much inventory you really need to keep
#5: Refund Administration Fees
Amazon conducts a refund for your customer on your behalf, they retain 20% of
the referral fee as a fee for their work administering the refund.
if the referral fee for your product is $3.75, and a customer returns that
product, Amazon will take 20%, or $0.75, of that referral fee, meaning you’ll
only get $3.00 of the referral fee back. To avoid this, make sure you
thoroughly research potential products and find something with a low risk of
Variable Closing Fees
closing fees apply to media items, such as CDs and DVDs. If you are selling any
media items, you’ll be paying a fee of $1.80 for every sale.
want to make money on Amazon, it’s just as important to know how much you’re
spending as it is to know how much you’re making. To keep track of how much you’re
spending in Amazon fees, you need to understand what those fees are. If you don’t
keep track of Amazon fees, they might start eating into your profits, and it
doesn’t matter how many sales you make if those sales aren’t profitable.
Know your costs so you can build your business!
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Married a pearl. Fathered 4 miracles. Fired his boss. Turned a single dime into $104,857. Today, a self-made millionaire, Seth and his team of 8 badass coaches teach entrepreneurs how to build passive income on Amazon.
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