Amazon FBA: Costs and Profits, Advantages and Disadvantages
Posted: Tue Dec 03, 2024 7:20 am
Sell on Amazon or on your own shop? This is a question that more and more manufacturers and retailers australia phone number list are asking. As always, there is no single answer: on the contrary, the choice to rely on Amazon (and, in particular, on the Amazon FBA program) must be carefully evaluated based on the general strategy. Let's see together what the advantages and disadvantages of this choice are.
What are the advantages for a company to sell through Amazon? And what are the disadvantages? How much does it cost me, and how much can I earn? And what implications can this type of choice have from a medium or long-term strategic point of view?
In other words: is it worth investing in a shop on Amazon , or is it better to focus on your own e-commerce?
If your company is among the many that are asking these questions, here you can find some food for thought to choose more consciously. But if you have other questions or doubts, contact our team .
We calculate costs and fees for using Amazon
The first thing to keep in mind is, of course, the overall cost of selling through Amazon. Being present on the most popular sales platform worldwide certainly gives access to a very high potential market, but how much does it reduce the margin on individual products?
Between percentage commissions, fixed costs and the cost of services, finding your way can be complex. To make the calculations easier, we have divided the different costs into some homogeneous items, to be analyzed separately:
the costs associated with simply being present on Amazon
those linked to the Amazon FBA program
the costs of those who choose the Amazon FBM system instead
some additional costs , which concern very specific cases.
All the values reported here refer to the official price lists according to the latest updates of 2021.
Costs for all retailers
The costs common to all retailers are these three:
the reporting commission
the fixed closing fee or, alternatively, the subscription fee
any refund fee when a customer decides to return an item.
Here's what they consist of.
The reporting commission
For each transaction made on Amazon, the seller pays a fee which is called a referral fee (or reporting commission , in Italian) and which corresponds to a pre-established percentage of the value of the sale.
Each product category has a different percentage. Most products are subject to a 15.45% commission (books, DVDs, home goods, office goods, music products and much more), but depending on the item it can go from 7% to about 45%.
There is also a minimum of 30 Euro cents valid on almost all items.
The complete table with the referral fee costs, in Italian, can be found at:
https://sell.amazon.it/prezzi
The fixed closing fee or, alternatively, the subscription fee
Individual sellers must also pay a per-item fee , or a fixed closing fee of €0.99 for each product sold on Amazon.
Alternatively, you can join a professional sales plan which, for those who sell only in Europe, costs €39.00 per month.
The professional sales plan is, of course, the option you will have to choose if you want to move into the world of Amazon as a company. Only its activation and the payment of the fixed subscription fee allows you to access important benefits and features such as integration with APIs, the possibility of using advertising tools on Amazon, the gift wrapping service for customers and more.
The administrative expense reimbursement fee
When a customer requests a refund for a purchased item, Amazon charges a variable fee that is retained as an administrative fee. This amount is equal to the lesser of €5.00 or 20% of the applicable referral fee.
What are the advantages for a company to sell through Amazon? And what are the disadvantages? How much does it cost me, and how much can I earn? And what implications can this type of choice have from a medium or long-term strategic point of view?
In other words: is it worth investing in a shop on Amazon , or is it better to focus on your own e-commerce?
If your company is among the many that are asking these questions, here you can find some food for thought to choose more consciously. But if you have other questions or doubts, contact our team .
We calculate costs and fees for using Amazon
The first thing to keep in mind is, of course, the overall cost of selling through Amazon. Being present on the most popular sales platform worldwide certainly gives access to a very high potential market, but how much does it reduce the margin on individual products?
Between percentage commissions, fixed costs and the cost of services, finding your way can be complex. To make the calculations easier, we have divided the different costs into some homogeneous items, to be analyzed separately:
the costs associated with simply being present on Amazon
those linked to the Amazon FBA program
the costs of those who choose the Amazon FBM system instead
some additional costs , which concern very specific cases.
All the values reported here refer to the official price lists according to the latest updates of 2021.
Costs for all retailers
The costs common to all retailers are these three:
the reporting commission
the fixed closing fee or, alternatively, the subscription fee
any refund fee when a customer decides to return an item.
Here's what they consist of.
The reporting commission
For each transaction made on Amazon, the seller pays a fee which is called a referral fee (or reporting commission , in Italian) and which corresponds to a pre-established percentage of the value of the sale.
Each product category has a different percentage. Most products are subject to a 15.45% commission (books, DVDs, home goods, office goods, music products and much more), but depending on the item it can go from 7% to about 45%.
There is also a minimum of 30 Euro cents valid on almost all items.
The complete table with the referral fee costs, in Italian, can be found at:
https://sell.amazon.it/prezzi
The fixed closing fee or, alternatively, the subscription fee
Individual sellers must also pay a per-item fee , or a fixed closing fee of €0.99 for each product sold on Amazon.
Alternatively, you can join a professional sales plan which, for those who sell only in Europe, costs €39.00 per month.
The professional sales plan is, of course, the option you will have to choose if you want to move into the world of Amazon as a company. Only its activation and the payment of the fixed subscription fee allows you to access important benefits and features such as integration with APIs, the possibility of using advertising tools on Amazon, the gift wrapping service for customers and more.
The administrative expense reimbursement fee
When a customer requests a refund for a purchased item, Amazon charges a variable fee that is retained as an administrative fee. This amount is equal to the lesser of €5.00 or 20% of the applicable referral fee.