Having thorough knowledge about Amazon selling fees is critical for an Amazon seller to succeed in the industry. Although not frequently reported or shared online, there are some online sellers who experience issues gaining or maintaining consistent profit.
On average, Amazon sellers prepare around $500 to $3,000 (USD) in order to launch their Amazon store and operate with substantial Amazon inventory. This is especially true for online sellers who chose to enroll in the Amazon FBA program.
Getting started with Amazon FBA also means being acquainted with the Amazon selling fees that accompany the Amazon seller program. For both newbie and tenured Amazon sellers, the Amazon FBA calculator is a helpful tool to calculate potential fees, costs, and profit.
Amazon Fees Normally Shown by the FBA Calculator
The FBA profit calculator is limited when it comes to the data it takes into account and the output it forecasts. Amazon fees are calculated using the FBA calculator and include the referral fee, fulfillment fee, and variable closing fee.
Since the Amazon FBA calculator is somewhat limited, Amazon sellers sometimes overlook other areas of the business that incur additional costs or the so-called Amazon hidden costs.
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Hidden Amazon Selling Fees You Should Know About | Amazon Hidden Costs
Here are some of the Amazon fees dubbed by sellers as Amazon hidden costs on Amazon:
Selling on Amazon Fees #1: Shipping Expenses
When discussing shipping expenses, you might immediately think about shipping costs or the fulfillment fee. However, the shipping expenses discussed here pertain to separate shipping expenses that most newbie sellers often forget about during the planning stage of their Amazon business.
Transporting your Amazon inventory products can be quite expensive, especially when sending your inventory items to multiple Amazon fulfillment centers. For that matter, it is important to choose your courier in relation to the number of shipped items.
Top Amazon sellers avoid sending their voluminous inventory products via UPS to lessen the shipping costs. Experienced sellers rely either on less than truckload (LTL) or less than container (LCL) freight to reduce shipping expenses.
Selling on Amazon Fees #2: Opening a Bank Account
For those sellers not based in the United States, but selling on Amazon US, opening a US bank account is necessary. Alternatively, you can transfer money for the initial deposit and the monthly maintenance fees (for a premium account).
Similarly, foreign sellers will also have to set up a bank account or use online financial service platforms, like Payoneer or Paypal to pay Amazon as well as their suppliers based abroad.
Regardless of the payment method, setting up bank accounts and online payment services will incur expenses in the form of maintenance, conversion, or transaction fees
Selling on Amazon Fees #3: Amazon Seller Tools Subscription
What makes the Amazon marketplace unique and highly preferred by online sellers is the array of seller tools available in the market. These tools help Amazon sellers to become more efficient and effective with their Amazon business strategies.
Although Amazon provides free to use Amazon seller tools, like their Amazon repricer and FBA profit calculator, they have limited features as compared to subscription-based Amazon seller tools.
Subscription-based repricers for example offer better features and functionalities that help enhance the repricing strategy of Amazon sellers. Apart from a repricing tool, sellers may also benefit from other subscription-based seller tools such as feedback tools, PPC tools, and new product development and keyword research tools.
Selling on Amazon Fees #4: Amazon Returns
As mentioned, the Amazon FBA calculator has a limited scope. When it comes to returns and damaged goods, you cannot rely on the FBA revenue calculator.
If you are new to Amazon, you should prepare for Amazon returns.
For newbie sellers, it is important to take note of Amazon.com Returns Policy, especially that Amazon makes it easier for customers to make product returns.
Selling on Amazon Fees #5: Brand Registry Expenses
Another avenue that leads to expenses for Amazon sellers is the brand registry. Brand registry cost is among the factors not included within the FBA calculator.
Generally, applying for the Amazon brand registry will not cost you. However, sellers will have to pay for one of its requirements, which is the trademark registration with the United States Patent and Trademark Office (USPTO).
For trademark registration, there are two initial application filing options. The first option would be TEAS Plus, which would cost around $225 per class of goods/services. The second option would be TEAS Standard, costing $275 per class of goods/services.
Selling on Amazon Fees #6: Advertising Expenses
After launching your Amazon product online, it is not enough to solely rely on organic search results. Regardless of your Amazon SEO, your competitors will likely be advertising on Amazon, either through Amazon Sponsored Products or Brands.
If you wish to increase your Amazon sales, then an advertising campaign is a must. Such a process will cost you, depending on the type of ad campaign.
Some sellers even go beyond the usual PPC campaigns and Amazon product display ads. There are some aggressive Amazon sellers who run affiliate marketing programs and even create a landing page for their Amazon products. Hence, resulting in additional expenses.
Selling on Amazon Fees #7: Overhead Expenses
Unlike traditional businesses, overhead expenses in eCommerce are minimal. However, they are still expenses that require payment.
Obviously, overhead expenses are not covered by the FBA revenue calculator. Hence, due diligence is necessary.
Some of the common overhead expenses encountered by top Amazon sellers include professional product photography fee, seller’s permit (may vary per US State), intermediate warehouse costs (serves as a center for inspection and labeling of items before being sent to Amazon fulfillment center), business structure fees, and business operation & maintenance fees.
Personal time is considered one of the most expensive resources involved in the Amazon business. If you are still a budding entrepreneur trying to make it big in Amazon, you will sacrifice personal time.
Attending seminars, learning new guidelines and ways of improving your business, participating in trade shows, and even coaching are some of the events that sellers spend time on. However, this is a priceless investment.