How Much Does it Cost to Sell on Amazon?

Kayla Utsch

May 11, 2021

If you ever wanted to launch an Amazon business, now’s the best time to do it: the world-renowned eCommerce platform has reached an annual revenue of $386 billion in 2020, with its growth expected to continue rising over the following years.

One thing that confuses many first-time entrepreneurs on Amazon–and continues to confuse seasoned sellers–is the long list of selling costs. Fees also vary based on your product and the program you chose (such as FBA or FBM).

To start a successful business on Amazon, you need to get a clear understanding of what the selling costs are and what you can do to save the most money. If not, you might get bad surprises and throw away your budget without realizing it.

What Affects Your Amazon Selling Costs?

The prices you’ll be paying to sell on Amazon depend on various factors. These will include:

Monthly Subscription Fees

Amazon has monthly subscription fees for users depending on the size of its business. The professional seller plan, for example, is for companies selling more than 40 items sold per month and costs $39.99 monthly.

If you’re an individual seller with less than 40 orders fulfillment each month, you won’t have to pay any subscription fees. Instead, Amazon will charge you $0.99 per product sold.

FBA Fees

If you’re selling via Amazon FBA, the prices you pay will all depend on your order type. For example, the larger your order is, the more you’ll have to pay Amazon to fulfill it.

Since FBA allows you to let Amazon’s warehouses manage your orders themselves, there's also a monthly storage fee that you’ll have to pay. You’ll be paying $0.69 per cubic foot from January to September and $2.40 per cubic foot from October to December.

Keep in mind that if your product stays in the FBA warehouse for longer than one year, you’ll have to cover additional charges.

FBM Fees

Unlike FBA, sellers on Amazon’s Fulfilled by Merchant (FBM) program are responsible for fulfilling their own products. One of its main advantages compared to FBA comes in the form of reduced fees.

With FBM, Amazon sellers on the Professional selling plan get to pick their own shipping rates. There is also the benefit of not worrying about paying any warehouse or storage fees.

Referral Fees

Each time you sell a product on Amazon, you have to pay a referral fee between 6% to 20%. The referral fee all depends on the type of product you’re selling within your Amazon store.

For example, if you’re selling any electronic products on your store, you can expect to pay a fee of 8%. If you’re selling clothing items, on the other hand, then you’ll be spending around 17%.

Customer Returns Fees

It’s pretty common for a customer to order one of your products only to return it later. As an Amazon seller, you’ll be in charge of covering costs for any item that the customer returns to your warehouse.

How Much Money do You Need to Get Started Selling on Amazon?

In general, it takes around $500-$3000 to get started selling on Amazon’s marketplace. The money you’ll invest will have to cover the following aspects of your business:

  • Required costs
  • Inventory costs
  • Shipping costs
  • Product photoshoots
  • Tools and supplies

Inventory Costs

Your inventory costs will be the most significant upfront investment for your Amazon business. After all, it’s going to be what you’ll be selling to customers on the platform.

If you're entirely new to selling on Amazon, you may feel reluctant to spend a lot of money on inventory since you don’t have a clear idea of what products will work with customers yet. To avoid running out of cash quickly, we recommend that you just invest around $500-$1000 in the beginning and test out which products will sell.

Product Photoshoots

As you’re running your Amazon business, you can’t settle for subpar photos. Having quality product photos will be essential to getting the customer’s attention and driving the most sales.

Part of your budget will be investing in professional photoshoots so you can make your online products stand out. Your pictures must showcase your product from different angles so the customer can get a clear view of the item and see it in a professional light. Low quality images won’t communicate a high-quality offering.

Advertising Costs

It’s not enough to just upload beautiful pictures to your Amazon store. To drive more sales, you’ll also want to invest in advertising and boost your reach as much as possible.

The good news is that advertising on Amazon is less expensive than other platforms: the current average cost per click on Amazon hovers around $0.35. However, advertising campaigns will take a lot of testing to see what works the best with your audience.

Tools and Supplies

Outside of marketing your Amazon business online, you’ll also be spending a great deal of your time packaging, measuring, and managing your orders (unless you’re on Amazon FBA). As a result, you’ll have to invest in various tools and supplies.

For example, you’ll need to invest in boxes to pack your orders, packaging tape to close them, and a scale to weigh them. A printer to print all of your Amazon shipping labels and documents will also be handy.

8 Ways to Save Money on Amazon Seller Costs

As you can see, the fees for selling on Amazon can add up quickly. That said, you can still minimize your Amazon seller costs and save money with the right strategy in mind. Here’s how:

1. Get a Professional Seller Account

If you’re serious about selling on Amazon, it’s better to sign up for the Professional Seller account at $39.99 per month than the free Individual membership. Since it comes with unlimited listings and extra features to help you sell more on the platform, it will save you more money in the long term.

2. Choose the Right Product Category

The category you choose for your product will play a significant role in how much you’ll be paying in referral fees. If you’re not careful, you may end up spending more money than you have to.

For example, let’s say that you’re selling necklaces on Amazon. If you choose the ‘Jewelry’ product category, you’ll be paying around 20% in referral fees. However, if you opt for the ‘Apparel Accessories’, you’ll be paying 17% instead.

3. Estimate the Right Product Size

Shipping heavy items on Amazon can come at a hefty price. It’s why you want to make sure to estimate your product size every time correctly, so Amazon doesn’t take into account the wrong size of your product and make you pay more for mass that doesn’t exist.

Before you prepare an item for shipping, always double-check that you correctly measure the dimensions. As a bonus, you can also invest in lightweight packaging to reduce the order's weight and save extra money.

4. Partner Up With a 3PL

Handling shipping manually yourself can be a time-consuming process. One of the best things you can do is outsource your Amazon shipping to a Third-Party Logistics Provider (3PL), which will manage your inventory for you.

A 3PL can save you money in the long run by reducing shipping carrier costs for you. Also, working with a 3PL ensures that Amazon isn’t going to reject your product, saving you time and countless headaches in advance.

5. Keep Track of Any Abandoned Inventory

If you’re on Amazon’s FBA program and leave your inventory stranded for far too long, you’ll start getting hit with additional warehousing fees. On top of that, it could also cause you to lose storage space for more products.

Make sure to take a look at your inventory each quarter to ensure that none of your products are stranded for too long. If an item doesn’t sell within six months, be sure to take it out of your warehouse.

6. Invest in Free Packaging Material

A simple way to cut your costs on Amazon is to recycle boxes you already have instead of buying new ones. Not only is it going to save you money from buying new material each time, but it’s also better for mother nature.

7. Sell Your Amazon Products in Bundles

You may have noticed that customers may like to buy complementary items to one of your orders. The problem is that Amazon applies referral and shipping fees for each order, which ends up costing you money.

Instead, you can bundle multiple products in one, so Amazon only charges you once for one customer purchase. You may have to pay slightly more in referral and shipping fees due to the size, but it may be less expensive than the combined fees from separate orders.

On top of that, product bundles ensure that customers get the most out of their orders and your brand. A bundle can improve the customer experience by simplifying their purchase decision.

8. Negotiate With Your Carriers

If you’re frequently doing business with a carrier (such as FedEx or UPS), you should consider negotiating with them to get the best prices on shipping. For example, ask your carrier if they have any discounts for certain order volumes.

Stop Losing Money on Amazon Selling Costs Today

It’s the little things you do that count: by reducing your selling costs on Amazon, you’re not only being more efficient, but you’re also saving money that you can reinvest into your business (such as advertising or improving your product).

However, finding ways to save the most money from Amazon’s selling costs can be a time-consuming process, and there might be other areas of business you’d rather focus on.

That’s where we can help. At Pattern, our team of ecommerce experts help you find the best selling costs for each product you sell on Amazon. Get in touch today and learn what your Amazon costs could be.

Explore Our Ecommerce Resource Library

Find relevant content to accelerate your ecommerce business. Stay on top of industry trends and best practices.

Global Ecommerce Weekly News: 27th September 2022
Blog

Global Ecommerce Weekly News: 27th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon drives renewable energy push with 71 new projects Amazon is planning to add 2.7 gigawatts of clean energy capacity through a couple of new projects as the company attempts to use 100% renewable energy by 2025. The ecommerce business will soon have a total of 329 renewable energy projects, generating 50,000 gigawatt hours of clean energy, which is equivalent to powering 4.6 million US homes every year. [Read more on Reuters](https://www.reuters.com/business/sustainable-business/amazon-drives-renewable-energy-push-with-71-new-projects-2022-09-21/) Amazon launches Prime Early Access Sale Amazon is launching a new 2-day shopping event for its Prime members only, beginning on the 11th of October. Across 15 countries, Prime customers will have access to the shopping event, with thousands of deals on offer globall, ranging from fashion to electronics to essentials. The event has the purpose of giving Prime users the chance to spread the cost of items over the winter months, 6 weeks ahead of Black Friday. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/26/prime-early-access-sale/) --- Other Marketplace News --- Shopify unveils new localisation tool Shopify is launching a new localisation tool, called Translate & Adapt, which works with Shopify Markets to offer localisation for sellers who are looking to expand into new markets. The tool translates a user’s online store into different languages, including product pages and information pages. Merchants are also able to create different shipping terms for each market using the new tool, which allows international expansion and offers a more localised consumer experience, unveiling new potential. [Read more on Ecommerce News](https://ecommercenews.eu/shopify-launches-new-localisation-tool/) Etsy is set to invest hundreds of millions into its marketing platform Etsy CEO claims that the company is on route to spend more than $570 million USD on marketing this year. Even during a time of macroeconomic pressure, inflation and rising interest rates, the company is preparing itself and its sellers for the upcoming holiday season and is focused on retaining interest from buyers. [Read more on Yahoo News](https://uk.news.yahoo.com/etsy-600-million-on-marketing-ceo-154054219.html) --- Other Ecommerce News --- Meta looks to cut costs by 10% in the coming months Meta employees are facing job redundancies as the company plans to cut its costs by 10% over the next few months. Meta reported a 22% YoY increase in costs and expenses, totalling over $20 billion USD. The cuts are expected to come in the form of job redundancies as a result of department reorganisations rather than formal layoffs. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/22/meta-to-slash-costs-by-10-over-coming-months/) DHL teams up with Quadient to offer smart locker deliveries in the UK DHL and tech company, Quadient, have partnered to offer smart lockers parcel pick-up throughout the UK. The new contactless, secure locker stations will give recipients more choice and flexibility to receive their parcels at a time and location best suited to them. The partnership plans to install 500 locker stations across the country by the end of 2022. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/21/dhl-partners-with-quadient-to-offer-smart-locker-delivery/) The online fashion market is set to be worth nearly $170 billion USD in 2025 The European online fashion retail market is set to grow 50% by 2025, with an online turnover of $170 billion USD, which is 33% of the retail branch’s total. Cross-border marketplaces prove to be the largest drivers of this growth, with online websites and apps like Vinted largely pushing the market’s online growth. Zalando recently became the largest cross-border fashion retailer/marketplace, responsible for 11.7% of the online market’s share. [Read more on Ecommerce News](https://ecommercenews.eu/online-fashion-market-worth-e175-billion-in-2025/)

How an Amazon SEO Agency Should Be Serving Your Brand
Blog

How an Amazon SEO Agency Should Be Serving Your Brand

If you’re in the global ecommerce space, you are most likely aware of Amazon, and probably selling your products on the marketplace. With over $470 billion in sales in 2021 alone, Amazon stands as the third largest company in the world based on revenue. The ecommerce giant is a household name in the U.S. and working hard to grow its market share across five continents worldwide.

Having your products available on Amazon and being competitive there, though, are definitely two different things. If you want to really succeed on Amazon, you’ll need specialized insight into how Amazon works and how to make it work for you. So, for many brands, it’s a great idea to work with an Amazon Search Engine Optimization (SEO) agency.

At Pattern, Amazon SEO optimization service is one of our key competencies. We understand that technology, data-driven insights and expertise  are the most important tools brands can leverage to win top listing spots on digital marketplaces. With expert teams and years of experience, we help brands conquer the Profitability Death Spiral as they compete with other products and sellers online. We offer Amazon SEO agency services as a core solution to brands that need more resources to get ahead. 

What is an Amazon SEO Agency?

An Amazon SEO agency serves brands by improving their products’ rank and listing performance on Amazon. They make strategic decisions about ad spending and placement that lead to higher traffic, conversions, and revenue for ecommerce brands.

A great Amazon SEO Agency partner will:

Prioritize Your Success

Unfortunately, many Amazon SEO agencies profit in unfair ways from your brands’ perceived success based on the ROAS numbers they provide. This is done through including branded search terms in ROAS reports, which naturally skew listing performance

Let’s say, for instance, your brand is called “Annie’s” and you sell lollipops. Your brand has a very high likelihood of winning the top listing spots on Amazon for lollipop search terms that are paired with “Annie’s,” your brand name. So, SEO agencies will spend your ad money on those terms and report a very high ROAS. 

To avoid scenarios like these, it’s best to look for an agency that either calculates their profits on metrics other than your ROAS scores or weighs branded search terms differently in the performance metrics reports. Regardless of your Amazon SEO agency’s cost structure, you should align onbranded search terms before committing to a scope of work.

Provide Detailed Competitive Insight

A great indicator of a high-quality Amazon SEO agency is the level of insight they can provide into your competitors’ listing positioning and how it compares to yours. Data fanaticism is so important at Pattern that we’ve developed proprietary technology to display this exact information with precise detail for every brand we work with. In fact, you can find our free version here to see how you compare to some of your top competitors based on ASIN.

It’s certainly possible to improve your Amazon search performance with blind spending strategies. But a truly great solution will help you to know where your dollars are at their most powerful and competitive.

Reduce Your Ad Spend Over Time

Amazon’s A10 algorithm prioritizes customer satisfaction—it wants to show consumers the best products that align with their search intent to improve conversions and sales. So, the best way to gain momentum on Amazon is to work on incremental wins. 

Improving your performance on more obscure search terms that align with your customers’ search intent is a great way to increase ROAS for the long term. A10 will reward your success with better rankings on higher-volume search terms and the virtuous cycle can help you conquer your most-coveted listing spots. And the best part? This process of gaining momentum, if done right, will naturally decrease your ad spend over time as Amazon recognizes your value and works with you to keep your products at the top of consumers’ search results.

Amazon SEO Optimization and More

As an Amazon SEO specialist, Pattern knows how to help your brand win better success for long-term profitability on Amazon. With our data-driven tools and brilliant teams of ecommerce experts, we help brands with listing management, content optimization, Amazon ad strategies, and more.

Contact us to learn more about our SEO optimization services.

4 Ecommerce Consultant Must-Haves
Blog

4 Ecommerce Marketplace Consultant Must-Haves

Entering the ecommerce landscape is a huge undertaking for any brand—it usually requires a large investment in resources and expertise to really be successful. Any brand can quickly get in over their heads trying to navigate the nuances of SEO, fulfillment and logistics, distribution control, listing optimization, and meeting the numerous other requirements and administrative tasks to show up well on marketplaces. 

Unfortunately, because it’s so easy for third party, gray market, and unauthorized sellers to obtain and sell products online, many brands find themselves pressured to execute an ecommerce plan without the right resources to succeed on marketplaces and their other channels.

So, for brands looking to enter the ecommerce space or improve their current and future performance, it makes sense to partner with an ecommerce consultant.

Pattern’s global presence and proven success with hundreds of brands has allowed us to develop highly effective ecommerce consulting services. We can guide your brand to navigate issues both large and small in marketplaces worldwide. To maximize your ecommerce efforts, you’ll need to understand what an ecommerce consultant does and how to select one who drives the right value for your brand and products. 

What is an Ecommerce Consultant?

An ecommerce consultant is a specialist in the ecommerce space who can give you personalized guidance on how to market your products and grow their presence on digital marketplaces.

An ecommerce consultant should be able to analyze your brand, audience, category, opportunity, and current roadblocks and help you understand how to utilize your resources (or what resources are missing) to be most effective in capturing your opportunities in the ecommerce space.

Not sure how to evaluate a consultant? Here are 4 key attributes to look for as you make your choice.

1. Brand Obsession/Specialization/Passion

At Pattern, we prioritize brand obsession for a reason—we know that a brand-centered mindset makes a crucial difference in the outcomes and results our partners achieve. So in our experience, when you begin your search for an ecommerce consultant, it’s important to look for a partner who is specialized in ecommerce, invested in the product, and passionate about helping brands build and improve their strategies. Typically, this means finding someone that consults exclusively for ecommerce marketplaces, rather than choosing a consultant who offers many different services. 

2. Proven Results

It’s also important to avoid choosing a consulting partner who can’t deliver the right experience for your brand. The best indication of whether your potential consultant can do that is to review their history, data, and results with other brands. Ask if they’ve helped others in your selling category, if they’ve solved specific issues your brand is facing, and why they feel you are a good fit. The key is to leave the conversation feeling confident that you understand your consultants’ capabilities and whether or not they match up with your needs.

3. Wide Range of Marketplace Expertise

It’s best to pick a consultant who knows how to guide a brand onto and through multiple marketplaces worldwide. You’ll want to take a look at your long-term strategy and think about the regions and platforms you’re currently on and where you might want to take your brand in the future. If your consultant is truly great at what they do, they’ll be able to help you perform well enough with your current product roadmap that it’ll be a no-brainer to expand your presence at the right time.

4. Network of Resources

The most effective partnership with an ecommerce consultant will be able to give you both recommendations and point you to solutions for making those changes in your planning, processes, and execution. Your time and money is valuable, so you want to make sure that you’re spending it as efficiently as possible as you follow your consultant’s advice. So, before you commit to an ecommerce consultant, ask about the resources and concrete solutions they typically recommend to the brands they work with.

Achieve Your Ecommerce Goals With Pattern

Finding an ecommerce consultant that checks the boxes can be a difficult task. At Pattern, our entire focus and drive centers around giving brands the tools and resources they need to succeed on domestic and international ecommerce marketplaces. 

With over 100 global ecommerce consultants across 10 global offices, we have the right tools to partner with brands across the world to achieve better ecommerce success. We give specialized advice, then make sure our partners have all the adequate SEO, social media, CRM, Amazon multi-channel fulfillment services, and ecommerce outsourcing services they need.

Interested in ecommerce consulting services? Set up a call here to learn what Pattern can do for your brand on global marketplaces.