What are Amazon Referral Fees?

As you know, there are various fees involved with selling products through the Amazon FBA program. Understanding these fees can help you gain a leg up on the competition and stay profitable throughout your selling journey. It’s important to know what you’re paying for when it comes to every transaction Amazon.

What is an Amazon Referral Fee?

Amazon charges a Amazon referral fee every single time you sell a product. It is a percentage of the sales price. Typically, this fee is 15%. However, the percentage will vary based on the category, which means it can be as low as 6% or as high as 45%. 

While it may seem like 15% is a significant fee, it’s actually fair. This fee can be compared to a commission that you’d pay a realtor for bringing you the sale of a house. Instead of you having to go out and market and put in work, someone else is doing that work for you, which can actually save you time and money. Amazon is bringing you customers in the same way. 

How is it Calculated?

The referral fee is calculated by a percentage off of the price that a customer pays. If you’re selling a product for $100 but have decided to drop the price to $0, then Amazon will calculate the fee off of $80. The referral fee, in this case, would be $12. 

If you’re shipping these products yourself, the customer will pay you for shipping, and the fee is calculated by adding the shipping fee and the sale price and multiplying that number by the percentage. 

Unfortunately, the fee preview in the Amazon dashboard will not change when you run a sale. However, you will only pay the fee based on the actual price the customer pays regardless of what it says in Seller Central.

Minimum Referral Fee

Amazon charges a minimum referral fee if the price of your item is very low. If the referral fee percentage will be less than $1, then they will charge a minimum $1 referral fee. Amazon applies this fee on a per-item basis, so it doesn’t matter which category type the product falls into. Amazon almost always will charge this minimum referral fee. After all, they have to make money, too.

Who Pays a Referral Fee?

Everyone who is a seller on Amazon pays this fee. It doesn’t matter what type of account you have or what type of fulfillment you’re using. Whether you have an individual seller account or a professional seller account, you will still always pay the referral fee. You’ll also have to pay this fee if you are fulfilling orders yourself or using FBA. 

Does the Referral Fee Adjust for Discounts?

The Amazon referral fee does adjust for coupon codes and other discounts. The referral fee will simply be the percentage of the sale price after the discount has been applied. 

Amazon referral fees can be difficult to understand, especially because they have so many other fees attached to their services. However, there are significant advantages of selling on Amazon. When done right, you can become a successful seller and keep your profit margins high.