Amazon FBA Fees: How Much Does it Cost to Sell on Amazon in 2024?
Selling on Amazon in 2024 involves navigating a complex landscape of fees, including Amazon Fulfillment by Amazon FBA fees, referral fees, individual per-item or subscription fees for seller accounts, and several other costs specific to FBA sellers. Understanding these fees is crucial for anyone looking to sell products on Amazon's platform. There are several fees that all sellers must pay if you are going to be utilizing the FBA network and these are your subscription fees, referral fees based on the item price sold, inbound freight to Amazon, storage fees, and fulfillment fees.
Referral Fees
Referral fees on Amazon are charged as a percentage of each item sold and vary by category. For most categories, this fee is around 15% of the sales price, with a minimum fee of $0.30 per item sold. However, certain categories have different rates, such as 8% for items with a total sales price over $500, and specific structures for items like watches and jewelry, where the fee percentage decreases as the item price increases
Seller Account Fees
Amazon offers two types of seller accounts: individual and professional. Individual sellers pay a flat $0.99 per item sold, whereas professional sellers pay a monthly subscription fee of $39.99. These fees are deducted from your Amazon account balance post-sale for individual accounts or charged monthly for professional accounts. More information on these fees can be located at Amazon seller central.
FBA Fees
For sellers using the FBA service, Amazon charges fees to cover the shipping, handling, packaging, and storage of products in Amazon's fulfillment centers. These fees vary based on the size and weight of the product. In 2024, Amazon is introducing new size tiers and more granular rate cards for standard-sized products and adding large bulky and extra-large size tiers. Significant adjustments include reductions in FBA fulfillment fee rates for standard-sized and large bulky-sized products starting from April 15, 2024.
Storage Fees
Amazon charges monthly inventory storage fees, which in 2024 will see a reduction of $0.09 per cubic foot for standard-size products during off-peak months (January-September). The storage utilization surcharge is also being adjusted, with more granular fee tiers being introduced and applying to Professional sellers with a storage utilization ratio above 22 weeks
Additional FBA Specific Fees
FBA sellers also face charges like the aged inventory surcharge, low-level inventory fee, inbound defect fees, and returns processing fee changes. For example, starting in 2024, the aged inventory surcharge will increase for inventory stored between 271-365 days. Moreover, a new low-level inventory fee will be introduced for standard-sized products with consistently low inventory relative to customer demand, effective April 1, 2024
Referral Fee Reductions and Other Benefits
Amazon has announced referral fee reductions for apparel products priced below $20, with fees dropping from 17% to 5% for items under $15 and from 17% to 10% for products priced between $15 and $20. Additionally, Amazon is enhancing its Amazon Vine Program and FBA New Selection program to foster better relationships with sellers and provide benefits such as an average 10% rebate on sales of eligible new-to-FBA parent products. The vine program is optional is a designed to generate up to 30 verified review on an ASIN. The cost is $200 per ASIN + the cost of goods as they are given away for free. Note that the "Small and Light" program which was introduced for products under $12 has now been deprecated and is no longer available.
Odds and Ends
You may also chose to fund programs such as "Subscribe & Save" which allow the seller to fund discounts in increments of 0/5/10 % off the selling price in order to encourage repeat automatic shipments of a product at the cadence choice of the customer. It is a loyalty program which is optional.
Sellers may also chose to participate in Amazon Advertising CPC (cost per click) campaigns, these charges can be paid by deduction against sales or by credit card. You will likely find they are necessary to develop sales, however not required by amazon as a foundational cost. This is an area where we see many sellers lack in their calculations. New sellers arrive at the site and did not account for the fact that they will have only minimal sales without participate in Amazon ads.
Final Thoughts
Navigating the cost of selling on Amazon in 2024 requires an understanding of a variety of fees, including referral fees, FBA fees, storage fees, and specific charges for services like returns processing and aged inventory. Sellers should leverage tools like Amazon's Fee Preview Report and stay informed about the latest fee changes to manage their selling strategies effectively and optimize their profits. Working with an Amazon Consulting Agency can also provide valuable insights and assistance in navigating these costs and maximizing profitability.