We know that Amazon’s referral fees are here for a reason. They cover Amazon’s cost for benefits such as access to their marketplace, processing of credit cards, and use of customer support.
Amazon does reassess their referral fees annually based on industry cost, seller feedback and, of course, their bottom line.
On February 18, 2020, some significant changes in the Referral Fee Percentages that will affect how you should reprice certain items. Amazon has decreased select referral fees along with an introduction of new and exciting selection program.
It is important to note that sellers pay either the per-item minimum referral fee OR the referral fee (as a percent), whichever is greater of these referral fee Amazon.
Minimum Amazon Referral Fees
The first change is the drop of the Applicable Minimum Referral Fee from $1 to $0.30 on most categories*. This change is beneficial for those who were selling items in these select categories under $6.67.
*does not include watches and jewelry where the original minimum referral fee was $2.
Amazon Referral Fee 2020 by Category – Progressive Charges
In the following Amazon referral fee by category, the percentage charges are now progressive. This means there is a different fee on the portion of the price above a certain amount.
Furniture & Decor
The new referral fee update for outdoor furniture products will be reduced to 10% for the portion of the sales price for items above $200. This is a relatively huge cut from its normal percentage fee of 15%.
Apart from referral fee change, outdoor furniture will also be consolidated into the Furniture category this year.
Referral fee percentages were previously 20%. This will change to 20% for the portion of the sales price up to $250 and 5% for any portion of the sales price above $250.
For example: Take a $255 necklace. You will pay 20% on the first $250 which is $50. Plus 5% on the $5 above 250 which is $0.25. Total Referral Fee= $50.25
Pay Close Attention
This next change is where things get a little more complicated. Because the new referral fees are using a tiered system, there are some price ranges where you will get less money due to increased Amazon fees after a certain price point.
Baby AND Beauty AND Health & Personal Care (including Personal Care Appliances) Categories
Another consolidation of categories has been introduced with the referral fee updates of 2020. The personal care appliances category is now merged with the Health & Personal Care category.
Along with the consolidation, a referral fee percentage change shall be observed by sellers. From the original 15%, referral fee for items with a total sales price of $10.00 or less is now 8%.
However, for products with $10 total sales under the consolidated category, the 15% referral fee is retained.
Grocery & Gourmet Food
Referral fee percentages will be 8% for products with a price up to $15.00 and 15% for products with a price above $15.00. The range where sellers should not sell is between $15.01 and $16.24.
Activewear’s referral fee will be similar to that of Clothing & Accessories at 17%.
After being consolidated into the Amazon Device Accessories, Ring accessories will now have a 45% referral fee.
Shoes, Handbags & Sunglasses
For the updated 2020 referral fee of the Shoes, Handbags & Sunglasses category, Amazon has introduced a significant cut. What used to be an 18% referral fee has been reduced to 15% for items under such a category having a total sales price of more than $75.
With the tiered fees becoming more and more common, shouldn’t you be with a repricer that will do everything possible to make sure you get the most out of your listings when selling on Amazon? Along with identifying and repricing around these “No Sell Zones”, Seller Snap’s proprietary software maximizes your profits while maintaining your Buy Box share. As well as being a premium repricer, Seller Snap provides advanced analytics and business intelligence for your store. Try out Seller Snap’s AI Game Theory Repricer now for free!