If you are considering selling on Amazon, it is absolutely essential that you familiarize yourself with Amazon Seller Payments and all of the various fees associated with it. It is extremely important for Amazon sellers, especially the beginners, to understand the Amazon fee structure. New Amazon users may find the Repayment Fees as expected because the calculated profits will need to be accounted for after these deductions!
We’re detailed here the basic guidelines to Amazon’s fee structure so you can become a more knowledgeable seller on Amazon’s marketplaces!
Things To Know Before Selling On Amazon
From the Amazon affiliate network, Amazon grants you access to a wide selection of buyers, which are in the millions, and you have to pay an extra charge that increases with the total amount of benefits you acquire from Amazon. It is normally neglected by sellers, which ends up in unrealistic profit expectations.
If you’re thinking about starting an Amazon seller account, it’s important to understand what the fees are before you start an Amazon business.
What is Repayment?
Selling on Amazon isn’t free of charge. You will be billed for the associated charges if you’re enrolled in any amazon’s services such as Advertising, Fulfillment by Amazon, Inventory placement service, Amazon-partnered carrier program, or Premium selling account services, additional fees, listing fees, carrier fees, etc.
Amazon Seller Repay is a simple process. When you make an Amazon sale, the commission amount will be deducted from your account balance. Repayment is a process by which Amazon pays sellers their earned commissions. When you make sales through your Amazon seller account, Amazon deducts fixed charges and pays out your commission as reimbursement on a regular monthly seller fees basis.
Amazon Seller Repay Charges
Let’s say if you earn $200 in commissions on your account balance and the Repayment fee is $12. The net amount of commissions earned by Amazon will be $196 ($200 – $12). When your account balance drops below $200, you will receive an email from Amazon. You will be required to pay the Repayment fee before you can make any additional sales.
You will be able to accumulate enough funds in your Amazon seller account balance that can be used for future purchases. If there are insufficient funds in your account balance, Amazon tries to charge directly on your credit card instead. In this case these charges to your credit card are labeled as Amazon repay. A “Seller Repayment” charge will appear on your Amazon Seller Account in the Payments section.
Basically, Amazon Repay is a secondary charge triggered again by Amazon if the deduction had failed attempt.
Amazon Fee Structure
As long as you’re an Amazon seller, you’ll be expected to pay recurring charges. Let’s take a closer look at these associated charges.
1. Per-Item Fees
If you have an Individual Account, for each item you sell, Amazon will collect a flat fee of $0.99. The Per-Item fee will be charged on the condition that the sale occurs. This figure is deducted from the money you receive from the purchase.
If you have a Professional Account, you pay a monthly membership of $39.99, irrespective of whether you sell products or not. This is a charge that you’ll need to pay whenever you want to list your items on the site.
As you would already have known, having a Professional Seller Account has many benefits, including advertisement, Brand Registry and more. Also, once you sell more than 40 pieces per month, you’ll see the cost savings for this type of account.
2. Referral Fees
Each time you choose to sell a product category on Amazon, you’ll have to pay a Referral Fee. The charge is based by what fraction of the product’s total price the item cost you. The rate of the Minimum Referral Fee fluctuates based on the category the item falls into. For example, if you choose to sell a product under the “Tools” category, you’ll have to pay $1.00 for every item sold. On the other hand, if you list an item under the “Electronics” category, you’ll have to pay a minimum fee for it.
3. Closing Fees
In case you offer media items through Amazon, you will have to pay $1.80 for each product that you manage to sell. This fee applies both to Individual and Professional sellers. This category brings together a wide range of items: video games, software, movies, music, DVDs, accessories, books, and consoles.
4. High-volume Listing Fees
You may need to pay a cataloging fee if you have a large number of products listed on Amazon’s marketplace. If these listings have not been sold within 12 months, you will incur approximately USD 0.001 per product that exceeds the allowed SKU number.
For example:
If you offer 1.6 million SKUs in December 2021, Amazon will charge you a fee of $100 for the month of December, calculated as $0.001 on the 100,000 SKUs that were above your free allowance of 1.5 million SKUs.
5. Refund Administration Fees
If one of your clients requested for a refund, Amazon will commence the necessary paperwork and proceed with that request. Note that Amazon will return the referral fee you paid. However, this sum is subjected to a “Referral Fee Refund Fee” and will be adjusted automatically. Think of it as an administrative fee just to process this additional step for the refund process.
This is calculated as lesser than $5.00 or 20% of the referral fee that you initially paid, according to the sold products.
6. Fulfillment fees
Under Fulfillment by Amazon (FBA), all sellers are subject to fba charges based on the weight and dimensions of the listed SKU.
While Amazon takes care of the logistics, customer service, and returns of your item, Amazon will charge FBA storage fees. These are monthly inventory storage fees charged based on the daily average volume for the space your products occupy in Amazon fulfillment centers.
These charges are determined by seasonality. So, expect a considerable increase in storage fees at the end of the year (October-December) when it’s the peak festive buying season.
You can read the full details on Learn more about Long-term storage fees here.
What Can I Do to Avoid Amazon Seller Repay Charges?
When you meet Amazon’s reimbursement requirements, you will avoid Amazon Seller Repayment Charges, you need to ensure that there are no negative balances in your Amazon Seller Account. Learn to keep an eye on your account’s health by reviewing the Payments Report frequently. It is a good idea to familiarize yourself with that Payments Report page in Seller Central.
Keep a track of your regular and additional selling fees
Record how each of your products sold came up with your regular charges by analyzing each product individually. You can build a more comprehensive picture of how much income you will generate from every sale this way, which will enable you to see the actual balance sheet details for your store.
Record all your selling fees, but also consider adding in other expenses you incur when selling on Amazon. In the end, the important things to understand that these expenses are still a part of your income and they will be factored into your net profit. You can always adjust the selling fees as needed.
Make your payments on time
In the unlikely scenario where you don’t have sufficient funds in your accounts to cover the monthly fees, make sure your account is linked to an active credit card. It is always better to have the fees deducted on your credit card instead of receiving an unexpected fee later.
Amazon Seller Repay Customer Service Number
Though you will be able to get answers to most doubts and questions from Amazon’s help pages, there might be times when you would want to talk to the customer support. You can reach out to Support at:
1-206-922-0880 (charges for long distance call will apply)
Sunday to Saturday 5 AM – 7 PM Pacific time
TL:DR
This is the complete guide to the Amazon fee structure. Review this information so that you can be more efficient with Amazon Seller Central. You must constantly look at the Payments section in your seller account to ensure you are mindful of the fba fees Amazon will charge for the particular services. Try to manage your inventory well to avoid high-volume listing fee.
We hope that you find this article informative. If you have any queries regarding the Amazon fee structure or Seller Repayment Charge, we are happy to help you out. Amazon seller repay.