When selling on Amazon, it can be seen as a simple job in front of the computer. We highly disagree with this, selling on amazon has a substantial amount of steps and processes including fees that need to be considered whilst selecting products to sell or produce to sell.
In this blog post we’ll be breaking down briefly the different costs to take into account that will occur once products start moving from point A to point B.
- Product Costs
This refers to the cost of the product you are aiming to sell for profit. Now remember the golden rule of 5 that we’ve mad a blog post on here. Each product you sell on amazon must have the wholesale price or production cost times by 5 in order to enter the market and be able to cover the rest of the costs we will further explain. If your production cost is too high or you are unable to mark up by 5 times the whole sale price.
2. Logistics
Sending your product over to amazon should be a separate calculation as if you are like us and based out side of the states, sending products to be stocked and ready on amazon cost. We recommend sending items by cargo ship to keep logistic costs and a minimum, you can check out our cargo services here
Amazon Breakdown
We’ve got the 2 basic costs of being an online seller down but what about amazon.com specifically?
- Amazon Seller Fee
Amazon currently has two different account types the individual seller account and pro merchant account which the main difference is the monthly fee vs listing fee
| Account Type | Best for | Monthly Fee | Listing fee |
|---|---|---|---|
| Individual Seller Account | Individuals and occasional business sellers | $0 | 99¢/item, when sold |
| Pro Merchant Account | Businesses and volume sellers | $39.99 | $0 |
2. Amazon Referral Fee
Depending on the category of your product will establish how much Amazon will ask for. Referral fees are a percentage of your product’s selling price. On Average most sellers will pay a 15% referral fee. But, these fees can range from 6% up to 20% depending on which categories your products fall under.
3. Amazon Shipping costs.
Now as we’ve already mentioned above, logistics plays a big part in the expenses to sell on Amazon. We recommend to send products in bulk and to sell Fulfilled By Amazon ( Which also have other costs related to FBA selling) Amazon has a credit system in the case that you choose to ship your product to the customer yourself Amazon will pay you a shipping credit which is in most cases lower than what you would pay when you ship products out yourself. Which is why we reccomend to bulk send products to amazon warehouse for FBA selling and pay for warehouse space at Amazon.
4. Amazon Warehouse fees.
This would be storage fees at amazon if you were to sell FBA. These costs will vary throughout the year and the seasons as well as near or far from amazon prime day. Check out this link to figure out how much you’ll have to pay for the amount of product storage you are planning to send out
5. Fulfillment Fees
Now that we’ve established that selling on FBA is probably the more wiser road to take, it does come with a price. Click here to check out how much Amazon charges for the specific item that you are planning to sell
It is a lot to take in when considering whether or not to pursue the FBA path, but we at Terrrestrial are always welcome to consult and help you figure out which way is best for selling on amazon.
For more information about selling on Amazon or if you have any other general questions and curiosities about it, feel free to contact us at our email hello@goterrestrial.com
We are open to having walk-ins at our office in Baan Tawai just look for the big burning ship!