How much does it cost to sell on Amazon?
What’s great about selling on Amazon is that you can get started without spending any money.
However, if you’re planning to use the private label business model there are costs involved in order to purchase your inventory before you sell it (at a higher price). But, it may not be as expensive as you might think.
In fact, according to a Jungle Scout survey of more than 1,000 Amazon sellers, 17% started their businesses with less than $500 — though the average reported cost is $3,836.
Plus, regardless of your chosen fulfillment method, there will be some fees associated with your seller account.
What are Amazon’s fees?
Here are a few of the Amazon fees that you may be required to pay:
- Amazon referral fees: This is the fee that Amazon takes as a commission for selling on its platform. It varies from category to category, but ranges between 12-40%. Most products have a 15% referral fee.
- Individual seller fee: This is a flat $0.99 added to each sale you make on top of the referral fee. But, sellers only have to pay this per-item fee if they’ve opted for an individual seller account, rather than a professional plan.
- FBA fees: If you use Amazon’s FBA program, you’ll have to cover the shipping and handling costs for Amazon. This usually works out to roughly $3.00 for small items weighing no more than a pound. The fees go up as the items get heavier or larger.
- Other Amazon fees: You may also have long-term inventory storage fees (if you use Amazon FBA), media fees (if selling books, DVDs, etc), and advertising costs.
What else should you know before selling on Amazon?
Here are a few more Amazon-selling basics that you should know.
Amazon’s Best Sellers Rank (BSR)
Amazon organizes all of its products by giving each a Best Sellers Rank (BSR); the more popular an item (and the more sales it makes), the higher the BSR.
In addition, departments (also called parent categories) on Amazon have their own taxonomy of BSRs, as do their sub-categories.
Selling on Amazon Prime
If you’re using Amazon’s FBA program, and you have enough inventory to spread around through its fulfillment network, then your product will qualify for Amazon Prime.
Selling Prime is key to being successful on Amazon as it means your products will be shipped to customers within 2-3 days.
Plus, you get the “Amazon Prime” badge on your listing, which means you’ll have a better chance of selling your product. Customers love fast shipping.
But if you’re selling FBM, you can still sell Prime as a Merchant Fulfilled Network seller. To do so, however, you’ll have to apply to Amazon’s Seller Fulfilled Prime program.
Training for new Amazon sellers
Here at Jungle Scout, we know that learning everything you need to know about selling on Amazon can be overwhelming. So, to help you ramp up more quickly, we have an extensive library of free resources.
In addition, if you already have a Jungle Scout subscription, you have access to our members-only Academy. It has video lessons for both beginners and advanced sellers alike.