Best Ways to Reduce Amazon Seller Fees and Increase Profitability

Discover the three types of payments you can expect as an Amazon seller and how you can reduce Amazon fees. Get valuable advice on how to increase profitability by understanding Amazon's different seller plans.

Best Ways to Reduce Amazon Seller Fees and Increase Profitability

Amazon has 150 million monthly visitors and is considered one of the most popular choices for many online sellers looking forward to increasing their sales and expanding their brand. Also, if you are planning to grow your profits using Amazon, you must know about the cost required to sell on Amazon. You must also know the ways through which you can reduce that cost.

Types of Amazon Seller Fees

Though listing products on Amazon is free, it takes their fees once you can sell your item and forwards the rest of the money into your account. Below mentioned are the three types of payments.

Referral fees- This fee is different from the fee charged per item on the individual plan and binds both the category holders. The fees usually vary depending on per item category. With some items, a minimum referral fee is also charged depending on the per item category. When such a case occurs, you will have to pay the higher of the two options.

Shipping fees- This fee usually varies on the product weight and size, and it also depends on the company you are using. If you meet a detailed list of requirements, Amazon may also offer you two-day shipping.

Variable closing fees- This fee is invented for items considered to fall under the ‘media’ category. This fee is very much contested among the individual sellers.

How to Reduce Amazon Seller Fees and Increase Probability

There are various ways through which you will be able to reduce the Amazon seller fees and increase your profitability.

  • If you already have an individual seller plan, you must switch to a professional seller account that can help you to receive unlimited listings and no fees per item.
  • Reduce your referral and shipping fees as it can help you be strategic about which items to sell on Amazon.
  • Raise your ASP (Average Selling Price) because this can help you to increase your profit margins and decrease the seller fees. $35 is an excellent ASP to aim for. It would be best to remember that the higher your ASP is, the more your profit margin will be.

Two main selling plans of Amazon

Amazon mainly has got two selling plan options. Each plan comes with its own set of fees along with some pros and cons.

  • Individual Seller Plan- It refers to a plan that provides access to a set of listings and also orders management tools
  • Professional Seller Plan- It refers to a plan that provides access to the inventory tools required to upload batch files. It also helps to manage your order through various reports and feeds.

Selling your products on Amazon, which is considered one of the top eCommerce companies, can bring you in front of millions of buyers to take your business to the next level. Do not rush and be intelligent enough to know about what you are contributing to Amazon and reduce the cost.

Looking for eCommerce fulfillment partner?

Let's Chat

Looking for a FBA Prep Partner?

Let's Chat

Continue reading