What does it cost to sell on Amazon?

Welcome to the bring your product idea to Life podcast. This is the podcast for you if you're getting started selling products or if you'd like to create your own product to sell.

I'm Vicki Weinberg, a product creation coach and Amazon expert. Every week I share friendly, practical advice as well as inspirational stories from small businesses. Let's get started.

Hello and welcome to my second standalone Amazon mini episode. And today we are going to talk all about the cost of selling on.

Amazon and things to consider.

This is just an overview, but I will link to a really useful tool to help you a bit further.

So, and I'll talk about this right up front.

There's something called the Amazon FBA revenue calculator.

They're not sponsoring this episode or anything like that.

It's just a really useful tool.

It's been around for a long time.

Looks kind of basic, but it's really good because you can use this tool to check and compare the estimated costs.

And revenue for products you might want to sell on Amazon. And you can enter your expected sales.

Volumes, the amount of stock you might.

Want to send into FBA, and you.

Can compare the fees and how profitable.

It might be to sell on Amazon.

Using different fulfillment methods.

So I think it's a really, really useful tool and I'm going to link directly to that in the show notes. And I also have a video I've.

Published on YouTube showing how to use this tool.

It is pretty straightforward, but the video.

Is really short, so that might help you out.

And again, I will link to that in the show notes for this episode.

Which is a good reminder that all.

Of these episodes are on YouTube. So if you're just listening to me.

Now, you could be watching me if you want to. So head over to YouTube.

There is loads and loads of content on there. So let's talk about what it costs to sell your product on Amazon.

So the first thing is when you want to sell your products on Amazon.

You set up an Amazon seller central account. And there are two types of account you can set up.

So the first one is the professional account. Let's take that one first. So professional Amazon selling account costs 25 pounds plus VAT per month.

So that's 30 pounds in total. And that just gets you selling on Amazon. There is also a free account and.

That is capped at 35 sales per.

Month and you are charged 75 p.

Per sale if you use a free.

Account, plus the referral fee, which we'll talk about in a moment.

So you don't pay for having the account. However, you, your, the way your account works if you have the free versus a professional is different.

And I am actually going to do a whole episode about plans and which one to choose because I think it's.

Worth you knowing the difference between the.

Two and working out which is best for you.

So I mentioned a moment ago the referral fee. So first of all, you have a.

Fee or nothing for having an Amazon account.

You could then under that account you.

Set up your products, set up as many listings as you like. You don't pay to have listings on.

Amazon, but as soon as you start.

Selling, you start paying.

So a referral fee is the best.

Way to explain this is for every item you sell on Amazon, you will.

Pay Amazon a percentage of the total price of that sale. So this includes the item priced, the.

Shipping cost, and any gift wrapping charges. So you will pay a percentage of that.

Now, referable fees are in addition to your selling plan fees.

So you might have, let's say you're.

Using a professional account. So you pay 30 pounds a month for that fee. And then you sell an item on.

Amazon and you are going to pay.

Them a percentage of the total cost of that order.

So that's the item plus shipping cost.

Plus gift wrapping if a customer chooses that. And the referral fees vary depending on.

The category and they're between 5% and 15%.

Some categories also have an additional 50 pence closing fee, but this is mainly.

Software, video games, stuff like that, and.

Not physical products, so that shouldn't apply to you. To find out what the fee will.

Be for the category you want to.

Sell in, this is all on the Amazon website.

You can go and take a look.

And also if you decide to use.

A revenue calculator, it will work that out for you.

So that's the first thing. Next, it will depend on whether you're.

Using FBA so fulfilled by Amazon or FBM. If you're using Fba so fulfilled by Amazon, where you send your stock into Amazon for them to store it and.

Dispatch to customers on your behalf, you.

Will pay a fee for this, but.

You only pay for services you use, I should say.

So when you sign up for FBA.

There'S no additional subscription fee, there's no contract.

So you could decide to use FBA for a while and then stop.

There's no minimum inventory requirements, which is.

Really important because when I do my episode specifically about FBA or FBM, I will share my thoughts there about maybe.

Not sending loads and loads of stock.

Into Amazon, but we'll save that for another episode.

So what happens is you decide you're going to use FBA.

For example, you're going to ship your.

Products to an Amazon fulfillment centre, which.

We'Ll go into more detail in a future episode. And then you're going to pay for the services and the storage space you actually used.

So how that fulfillment fee is made.

Up and Amazon do break this down for you is a fee based on.

The product type, the dimensions and weight, and this is a set fee.

So for every product that you list.

On Amazon in your inventory, if you are using FBA, once you've told Amazon, you've told them the product type and.

You set it up, once you've told.

Them the dimensions and weight of that.

Individual product, they will show you in.

Your inventory an estimate of what you'll.

Be paying to store and ship that product per sale.

So you will also pay a storage.

Fee, which is per cubic foot per month, and the volume is based on when the product is packaged ready to.

Ship out to customers. That is, how much physical space your products in their packaging are taking up on a shelf.

And you pay per cubic foot to.

Give you an idea. So standard size items, most of them.

Are around 76 pence per cubic foot per month.

And that's from January to September.

Because in Q four, storing stuff in.

An Amazon warehouse gets more expensive because.

It'S more busy because it's busier.

And a standard size item is one.

Pound 19 per cubic foot per month. So hopefully that helps.

So it's a set shipping fee and.

The set storage fee, and you'll be able to see all of this in your inventory.

Now, there are different fees for shipping and storing oversized products. Hazmat products, shoes and clothes come under.

A different category fee category. Not sure why, actually.

And the best way to find out.

The fees for your selling your products on Amazon is using the calculator I mentioned earlier. Like I say, not sponsored by this.

Calculator, but it is a really useful.

Tool and it's free, so why not?

Okay, so let's say you're not using FBA.

Then of course you've got to take.

Into account your own fulfillment costs and.

How much it's going to cost you to store and ship or store if appropriate. Maybe you're not paying for storage, maybe you are. But you need to think about your own fulfillment costs as well.

If you are selling your products on Amazon and you're using a professional plan.

So this is the one where you.

Pay 30 pounds inclusive of VAt a.

Month, you can set your own shipping rates.

So if you want to charge customers.

For shipping on Amazon, you can do.

And you decide what the shipping costs will be. If you are using the Amazon individual plan, Amazon will set the shipping rate for all products. So they will tell you what you.

Have to charge the customer for shipping.

They won't tell you what you have to charge.

They will charge the customer for shipping.

So if you're using the free account, it's really important to price your products.

In a way to make sure you're actually going to earn a profit from it.

And if you are setting your own shipping rates, do remember as well that.

When Amazon charge you the fee per sale, they're taking the shipping cost into consideration as well.

So when they're working out that referral.

Fee, it's product price and the shipping price on top. So just make sure you're factoring that into your calculations. And as I say, and I promise this is last time I say it.

If you're using the fee calculator, it works all of this out for you. And then there are other things you.

Might pay for when you're selling on Amazon. As if that wasn't enough, actually, I say that it's not actually that much. It's, I guess it is kind of.

Standard fees you pay for in any.

Marketplace, but it isn't perhaps as straightforward as some other marketplaces. And hopefully I'm doing a good job.

Of breaking it down and making it fairly simple. But other things you might want to.

Think about is long term storage.

So I mentioned earlier, I don't think.

You should necessarily send loads and loads of stock into Amazon, certainly not unless you're pretty confident it's going to sell through pretty quickly, because after a certain.

Amount of time you're going to start.

Paying long term storage fees. That's obviously going to add to your costs.

If you decide actually you've got too much stock in a warehouse, you need for it to be returned.

You have to set up what's called.

A removal order and you'll pay for that. You also will pay a little bit of an admin fee if Amazon processes a refund for you.

If you decide to do any advertising on Amazon, you'll have advertising costs.

If you use Amazon buying to get.

Reviews, there's fees for that. If you use Amazon promotions, they're free.

But of course, if you're running a promotion, that's a bit less money that you're taking. So it is a cost.

So these are all things that you.

Need to think about. I know this is a lot, but hopefully it just gives you a bit of an overview and just a bit.

More knowledge really, about all of the things to consider.

And as I say, and I said it was going to be the last time, this really is the last time.

If you're unsure about any of this.

Have a look at the fee calculator.

And if you're still unsure about this.

Let me know if you want any help. That's what I'm here for.

I really hope you've enjoyed this extra.

Episode and next week we're going to.

Talk all about FBA and FBM. So what does that mean?

Which one should you use? What?

The pros and cons of each.

We're going to go deep into that.

So I will really look forward to seeing you next week.

Thank you so much for listening. Right to the end of this episode, do remember that you can get the full back catalogue and lots of free resources on my website, vickywineberg.com.

please do remember to rate and review this episode if you've enjoyed it, and also share it with a friend who you think might find it useful. Thank you again and see you next week.