Updated Amazon Seller Fees February 18, 2020

A lot has changed for Amazon in 2019. More warehouses, new delivery services, and one-day delivery are just three of those exciting changes. Starting on February 18, 2020, Amazon is changing its fee structure for Amazon sellers as well.

Read our handy summary of these fee changes and about the new and exciting FBA New Selection program!

Referral Fees

  • Shoes, Handbags, and Sunglasses fee drops from 18% to 15% for items with a total sales price above $75.00
  • Outdoor furniture fee drops from 15% to 10% for any portion of sales above $200
  • Personal care appliances to be consolidated into Health & Personal Care category, dropping the fee from 15% to 8% for items with a total sales price of $10 or less
  • Activewear will be charged the same fees as Clothing & Accessories at 17%
  • Ring accessories to be consolidated into the Amazon Device Accessories category and charged a fee of 45%
  • Amazon Business to have one referral fee rate per category, so items above $1,000 will have the same rate as items less than $1,000

Fulfillment Fees

Core fulfillment fees are going to be increased by an average of 3-4% across the board.

Screenshot of new fees for Amazon FBA starting on February 18, 2020

Other changes to fulfillment fees are below:

  • Clothing will no longer have the $0.40 per unit charge
  • Small & light fee will now have a single per-unit fee by weight instead of separate order handling, pick and pack, and weight fees
  • FBA Label Service for Small and Light items will be $0.10 per unit
  • No long-term storage fees for small and light items in fulfillment centers for 181-365 days
  • Small and Light will now have the same standard long-term FBA storage fees (more than 365 days), so $0.15 per unit instead of $0.50 per unit
  • Small and LIght will have the same standard FBA disposal and removal fees

Introducing FBA New Selection

New to FBA for 2020 is the FBA New Selection program. This program allows sellers to enroll new-to-Amazon ASINs for fee reductions and other benefits.

Sellers must opt-in before they’re qualified to take advantage of this new program.

Benefits sellers will receive from this program:

  • Fee waivers for up to 500 new-to-Amazon ASINs
  • Free monthly storage for the first 50 units of each parent ASIN in the 90 days after the first unit is received at the fulfillment center
  • Free removals of the first 50 units within 180 days
  • Free returns processing for five product categories in bold below
    • Apparel; Shoes, Handbags, & Accessories; Jewelry; Luggage; and Watches will have their returns processing fees waived for the first 50 units of each parent ASIN
    • Returned items must be received within 120 days from when the inventory was first received
  • $100 inbound transportation discount for new FBA sellers through the Amazon Partnered Carrier program

Who is eligible?

  • Sellers with an Inventory Performance Index (IPI) score of 400 or higher
  • Sellers who have no storage limit

What is eligible?

  • Small standard and large standard-sized items are eligible
  • Parent ASINs must be new to Amazon
  • ASINs in media not eligible
  • Used items not eligible

Other information about FBA New Selection

  • Begins April 1, 2020
  • Only first 50 units of each eligible ASIN qualify for fee waivers
  • Only the first 500 new-to-Amazon ASINs qualify for the fee wavers, but this limit is reset every year on April 1
  • Available only to Professional sellers

Fee increases aren’t really surprising to veteran Amazon sellers who are accustomed to annual, and sometimes semi-annual, changes to Amazon’s fee structure.

The biggest benefit will be to sellers who are participating in the Small & Light program, which has been drastically simplified with consolidated and reduced fees.

Amazon’s FBA New Selection program also looks interesting, as it encourages sellers to continue to introduce new products, which will be great for Amazon and customers.

Be prepared for these changes to Amazon’s fee structure starting on February 18, 2020!

Amazon Fees Explained for New Sellers

Amazon fees are rarely discussed amongst sellers. You’ll often hear about how much money people are making on Amazon, but you’ll rarely hear about what the cost of doing business is.

If you’re not careful about your expenses and the fees that Amazon charges, you could be losing money.

Take a look at your settlement. You’ll see that fees are all lumped together, making it difficult to know the expenses line by line. While you can get a bit more detail by filtering, those details aren’t organized as well.

For most sellers, the selling fees don’t matter since there’s no way to opt out of paying them, but understanding the fees Amazon charges will empower sellers in making critical business decisions.

Below are the most common fees and credits you’ll see from Amazon.

Per-item Fee

This fee is a flat $0.99 rate charged on all items sold with the Individual Selling Plan. If you’re consistently selling more than 40 items a month, then you should upgrade to the Professional Selling Plan, which has no Per-Item Fee and a host of other features.

Referral Fee on Item Price

Items sold on Amazon will have a referral fee based on a percentage of the item price or the minimum referral fee of usually $1.00. For many categories, that cost is 15% of the item price, but the percentage can range anywhere from 6% (Personal Computers) to 45% (Amazon Device Accessories).

Referral Fee on Gift Wrap

If you charge for gift wrap, Amazon will take a percentage of this as well. In some states, gift wrapping is taxable. For example, Arizona doesn’t tax gift wrapping services, while Florida does. California does tax gift wrapping depending on what the item is.

Referral Fee on Shipping

Amazon takes 15% whatever you charge for shipping.

Variable Closing Fee

This fee depends on the category of the item you sell. Media like books, DVDs, and Video Games are $1.80 per item you sell. But most categories outside of media won’t have this fee.

Sales Tax Collection Fee

Yes, Amazon even charges you to collect sales tax.

Refund Administration Fee

Fee for non-media items. This cost is 20% of the order-related fees, up to $5.

Shipping Services

You can purchase shipping from Amazon. This is the recommended route, as you get more seller protection by purchasing through Amazon than you would shipping it on your own.

Amazon may also charge a small fee for specific shipping services purchased through Amazon.

Amazon’s shipping is likely to be cheaper than what you would pay if you were to go to the post office or at a UPS retail location.

Cost of Advertising

This is the total cost of your advertising fees on Amazon for the period.

Shipping Services Refund

Refund for shipping services purchased.

High Volume Listing Fee

This fee is for sellers with more than 100,000 active listings. Each listing after is charged a monthly fee of $.005.

FBA Fulfillment Fee

This FBA fulfillment fee depends on the item you’re selling. But it starts at $2.41 for small, standard-sized packages weighing under 10 ounces.

Storage Fee

Storage fees are for storing your items at the fulfillment centers. For items sitting in the warehouse longer than twelve months, you have to pay long-term storage fees, which are a lot more.

For standard-sized products from January to September, the cost is $0.69 per cubic foot. For October to December, the cost goes up to $2.40 per cubic foot.

Long-term storage fees increase to $6.90 per cubic foot.

Inbound Transportation

This charge is for shipping purchased through Amazon to ship to their fulfillment centers.

Subscription Fee

The subscription fee is for Professional accounts.

Successful Charge

This is usually any money you’ve paid Amazon through your credit card. So if you have 0 sales and a -39.99 subscription fee on your settlement, you’ll see a 39.99 Successful charge entry on your next settlement.

Payable to Amazon

This is the amount you owe Amazon, it’s generally carried over from the last settlement.

Removal Fee (Disposal)

If you need to dispose of your inventory, then Amazon charges $0.15 per item or $.30 for large items.

Removal Fee (Return)

If you want your inventory returned to you, then it’s $0.50 per item or $0.60 per oversized item.

FBA Label Fee

If you choose to use Amazon’s label service, then it’s $0.20 per label.

Amazon Capital Services

If you’ve accepted an Amazon loan, then you’ll see this listed on your settlements.

Warehouse Damage

Amazon will reimburse you for damaged FBA inventory. They may reimburse you in cash or give you another of the same product.

Warehouse Lost

This reimbursement is for lost FBA inventory.

Removal Order Lost

You’ll receive a reimbursement for removal orders that Amazon loses.

Removal Order Damaged

This reimbursement is for removal orders that Amazon damages.

Reversal Reimbursement

If Amazon has reimbursed you in cash for lost inventory and later finds it, you will see this charge.

Sample Fees for an Individual Account FBA Order

Let’s say you sell a standard-sized, lightweight item (under 10 ounces) on an Individual account. For the sake of convenience, let’s say it’s in the office products category with a 15% commission.

Your fees would be the following:

  • $20.00 Sale Price
    • $2.41 FBA Fulfillment Fee
    • $3.00 Referral Fee
    • $0.99 Per-Item Fee
  • Total to your seller account $13.60

Missing from these fees are your inbound shipping fees, storage fees, and cost of goods. Generally, inbound transportation fees are low if you’re sending in large shipments. Storage fees are generally low if your inventory moves quickly.

If this is your only sale for the period, you’ll see any money you owe Amazon deducted from your sales proceeds. So you may end up getting less than $13.60 for inbound and storage fees.

Many sellers will never take a look at the details of their sales. They’re satisfied so long as there’s a net positive disbursement. But after accounting for cost of goods sold and labor, there may not be much of a margin.

But knowing the details of the orders will allow businesses to make smarter financial decisions like whether or not they should discontinue a product or stop using FBA.

Read our other articles about Amazon below:

Understanding Amazon Fees: Tips for Used Book Sellers

Understanding Amazon fees can be confusing for used book sellers, especially for people who want to start on Amazon selling used media.

If you’ve read some guide about getting rich through selling books on Amazon, you may want to take a closer look at the date on those guides. Since March 2017, changes to the fee structure for media made selling books less lucrative.

Prior to March 2017, fees for the media category (including books) were 15% of the item sale price and a variable closing fee of $1.35 per book sold.

The new changes included a fee of 15% of the total sales price (including shipping) and a closing fee of $1.80.

For sellers, the difference meant that they were charged 15% on shipping price as well as the sale price. This increase, combined with higher closing fees, marked the end of penny books.

What does the change mean for people who want to sell used books on Amazon? It’s now difficult to earn much money by selling “cheap” books. Let’s take a look at a sample order for a $4.99 book with an Individual account.

Fees for a book sold with an Individual Account

A book is listed for $4.99 + 3.99 shipping, for a total of $8.98:

  • $0.99 per-item fee (charged for every item sold through an Individual account)
  • $1.35 referral fee (15% of total sales price)
  • $1.80 closing fee (flat fee charged for all media)

You’d get $4.84. You’d still have to pay for shipping supplies and postage. New 2019 media mail rates start at $2.75. In bulk, bubble mailers at the local office supply store are about $0.25 each when you buy a large pack.  You’ll be able to get cases of mailers cheaper from one of these shipping supplies vendors.

That brings your proceeds from the sale to $1.84.

For many used book sellers, $1.84 isn’t worth it for the effort involved. The costs of supplementary materials like labels, paper, and tape, coupled with other costs like gas and time (assessing, listing, packing, shipping), make selling cheap books less than ideal. Of course, if your cost of goods is higher, then it’s even worse.

You can earn far more profit for the same amount of time invested in selling other products.

To put this number into perspective, you’d have to identify, list, pack, and ship approximately 4 books an hour to earn the federal minimum wage of $7.25 per hour.

But what if you were to use FBA?

The biggest difference between FBA and seller-fulfilled orders is that Amazon keeps any additional shipping fee. So you’d only receive $4.99. Your costs for an FBA order would be:

  • $0.99 per-item fee
  • $0.75 referral fee
  • $1.80 closing fee
  • $2.41 fulfillment fee

These fees don’t include inbound transportation and storage costs.

If you were to use FBA to fulfill this order, you’d receive less than $0.96 after you account for the inbound and storage fees.

Still want to sell used books?

High fees shouldn’t stop used book sellers. There’s still money in used media even with increased fees. If you’re able to get enough books at a very low price (or free), then selling books may be worth it if you’re able to develop an efficient workflow.

You’ll want to have some kind of software to track your income and expenses. With such low margins, you’ll be susceptible to an increase in your expenses, whether that’s increased marketplace fees, shipping fees, or even gas prices.

If you’re wondering how sellers manage to make money selling low-priced books, then it’s because they have the technology and volume to get better rates.

For instance, 2018 commercial rates for 5-digit presort start at $1.74 instead of the retail rate of $2.66. Any small discount from the retail rate can result in thousands of dollars of profit for volume sellers.

Don’t forget to account for returns. If you have to pay return shipping, you’ll be in the negative for the sale. When selling low-priced items on Amazon, you may be better off enabling returnless refunds for those items.

Here are some tips to help new sellers earn more money.

  • Check out our article on new seller tools to streamline processes whenever possible to reduce the time you spend on any one task
  • Use FBA for books that have a good sales rank so that you don’t pay as much for storage fees
  • If you expect to consistently sell more than 40 books a month, subscribe to the Professional plan to eliminate the per-item fee
  • Reduce returns by making sure your book condition is accurate and transparent
  • Consider selling low-demand or cheap books on eBay or other marketplaces grouped as lots (by author, genre, or audience)
  • Sell (or trade) unwanted or low-value books to used bookstores like Half Price Books
  • Use rewards credit cards and online rebate or affiliate links to save even more
  • Use scanning apps to quickly go through stacks of books
  • Set a minimum profit you want from each sale to make your time worthwhile (and to speed up sorting)
  • Consider returnless refunds for some items

The good news for used book sellers is that people haven’t shunned physical media for digital. Audiobooks and ebooks haven’t decimated print books as some feared just a few years ago. On the contrary, sales of print books have increased and are forecasted to grow.

Starting off with books may be a good way to learn how to navigate Amazon. The low cost of entry means that you can learn the various processes. Think about any losses as the cost of learning Amazon. It’s still cheaper than paying for an Amazon guru course.

Amazon Seller Fee Changes For 2019

Take a look at a summarized list of Amazon seller fee changes that will take place in 2019.

Some of the fee changes for next year will be a nice surprise for sellers in certain categories. For instance, referral fees for categories like groceries will drop almost half, down to 8% from 15% for total sales prices below $15.

This change makes it easier for grocery sellers to sell everyday grocery items that households need.

See below for other Amazon fee changes.

Fulfillment Fees

Fulfillment fees are a little higher for sellers of larger items (above 10 ounces). If you sell dangerous goods, you’ll also see increased fulfillment fees.

New FBA Fees 2019

If you’re selling products classified as dangerous goods, you’ll see these changes:

New Dangerous Goods Fees

Storage Fees

On February 15, 2019, these changes will take effect for storage fees:

  • Long-term storage fees (LTSF) for products that have been in fulfillment centers between 181 to 365 days will be terminated, but LTSF will still remain for products in fulfillment centers more than 365 days
  • Minimum LTSF fees for products in fulfillment centers more than 365 days will be dropped from 50¢ to 15¢ per unit
  • Monthly storage fees for dangerous goods will be increased

Amazon Dangerous Goods Fees

Referral Fees

On February 19, 2019, these fees will go into effect:

  • Applicable minimum referral fee dropped from $1.00 to $0.30 across all categories
  • Baby (except Baby Apparel), Beauty, and Health & Personal Care fees will be 8% for products up to $10.00 and 15% for products above $10.00
  • Furniture & Decor (except for mattresses) 15% for total sales price up to $200 and 10% for any portion above $200

In case you missed out on other fee changes that took place earlier in 2018, here they are:

  • Shoes, Handbags, and Sunglasses: fees raised from 15% to 17% for total sales price above $75
  • Clothing & Accessories fee raised from 15% to 17%
  • Jewelry fee dropped from 20% to 5% for the amount above the total sales price of $250

In addition to those fee changes, Amazon has these current seller promotions. You can see which of your ASINS qualify for referral fee discount by going to Pricing > Fee Discounts.

Amazon Fee Discount

  • Get a 60% discount on referral fees (requires Amazon login) when a non-Prime ASIN is added to Seller Fulfilled Prime
  • Get up to a 70% discount on referral fees when you lower your price

If you’re thinking about Seller Fulfilled Prime, make sure you fully understand the requirements. Many sellers end up losing money on SFP sales because of high shipping costs. Their account metrics may also suffer because of stricter requirements.

Sellers who sell low-priced items will stand to save the most from these changes. That’s mainly due to the minimum applicable referral fee drop from $1.00 to $0.30.

If you’re selling in any of the affected categories, take a look at your pricing. You may need to adjust your sales price in order take advantage of those fees.

Thinking about expanding to other marketplaces and want to take a quick look at their fees? Check out our article on other marketplace fees.