What is the Amazon Marketplace Charge in 2024? The Complete Expert Guide
As an ecommerce consultant specialized in Amazon Marketplace selling, one of the most common questions I get from new sellers is trying to understand all the different fees involved. Specifically, most want to know exactly what the Amazon Marketplace charge percentage is and how it works.
In this comprehensive guide, I‘ll explain everything sellers need to know about Marketplace fees with tips for managing this major cost of selling on Amazon.
Breaking Down the Main Components of Amazon Selling Fees
To help sellers wrap their heads around the fees involved, here is a breakdown of the primary charges when selling products on Amazon‘s Marketplace:
- Referral Fee (Marketplace Charge): Amazon‘s commission on each sale, which is 15% of the total sales price for most product categories
- FBA Fees: Fees for fulfillment services if using Fulfillment By Amazon, includes pick & pack costs, weight handling costs, and storage fees
- Shipping Fees: Costs of shipping each order to customers
- Selling Account Fees: Small monthly or annual subscription cost for a Professional Selling Account
- Miscellaneous Fees: Other variable closing fees, refund administration fees, etc. that may apply
Of these main buckets the referral fee makes up the largest percentage at typically over 50% of total selling costs on Amazon. This is why fully understanding this commission charge is so critical.
What‘s Included in the Amazon Marketplace 15% Charge?
The Amazon Marketplace charge is essentially Amazon‘s cut of each transaction for providing the ecommerce platform and access to their ecosystem.
Each time a sale is made, they take a commission between 5-15% on the total sales price (not including shipping or tax). So if a customer bought a product for $100, Amazon would take $15 right off the top.
This fee helps pay for things like:
- Server infrastructure, hosting, and bandwidth
- Payment processing capabilities and fraud protection
- Customer service resources
- Investments in fulfillment centers and logistics networks
- All other overhead required to operate Amazon‘s vast Marketplace globally
Because it‘s the largest contributor to costs, a deep grasp of the referral structure is key for sellers:
Amazon Referral Fee Rates by Category:
| Product Category | Referral Fee Percent |
|---|---|
| Books, Music, Video, DVD | 5% |
| Consumer Electronics | 8% |
| Kitchen, Shoes, Software | 15% |
| Home Improvement, Jewelry | 20% |
*Note referral fees can range higher for some specialty categories
As you can see above, while most categories fall at the standard 15% commission rate, some product types actually have lower referral charges.
Understanding the category breakdown is important so sellers position themselves in the most profitable ones.
Real-World Examples of Calculating Referral Fees
Let‘s look at some real examples to demonstrate exactly how the percentage commission fees translate to dollar amounts:
Example 1)
- Product Sold: Bluetooth Speaker
- Category: Electronics
- Sales Price: $50
- Amazon Referral Fee Percent: 8%
$50 x 0.08 = $4
Amazon‘s Marketplace Charge = $4
Example 2)
- Product Sold: Set of Kitchen Knives
- Category: Home and Kitchen
- Sale Price: $150
- Amazon Referral Fee Percent: 15%
$150 x 0.15 = $22.5
Amazon‘s Marketplace Charge = $22.5
So in these examples, Amazon takes between $4-$22.50 per transaction depending on the price point and category.
And these referral fees apply EVERY TIME an order comes through – so they add up quickly!
This is why building them into your pricing strategy is so important which I‘ll cover now.
How to Factor Amazon Fees into Pricing to Preserve Margins
As an expert advisor to Amazon sellers, I always coach new Marketplace clients on the critical importance of accounting for fees in their margin calculations before determining pricing.
Amazon provides a Fee Calculator that lets you see the specific referral, FBA, shipping and other estimated fees per product.
Be sure to run your products through this tool to understand potential costs, and example scenario:
Pricing Example:
- Landed Cost Per Unit: $20
- Break Even Price: $25
- Marketplace Referral Fee @ 15%: $3 (on $25 sale)
- Other Variable Amazon Fees: $4
- Minimum Price Required: $32 minimum to maintain profit margin
As you can see in this example, correctly accounting for the 15% referral and other fees requires setting a $32+ price point just to break even. I counsel all new sellers to make sure they run these calculations, otherwise Amazon commissions will quickly eat into margins.
What About Other Platforms – Do They Charge Fees Too?
While 15% sounds steep compared to running your own store, sellers must remember the tremendous access and built-in audience Amazon provides. But to give some context around how Amazon‘s fees compare:
| Platform | Average Fees | Pros | Cons |
|---|---|---|---|
| Amazon | ~25% | Massive reach, built-in base of 300M worldwide Prime subscribers | Higher fees mean tighter margins |
| eBay | 10% | Large buyer base, cheaper fees | Less brand trust than Amazon |
| Etsy | 5% + Listing & transaction fees | Targeted to handmade/craft goods | Much lower traffic potential |
| Shopify | 2.4% + Credit card fees | Full control, make branding a priority | No built-in audience, all marketing costs on you |
As shown above, selling on Amazon comes with the highest overhead but unrivaled access to purchase-ready buyers. My recommendation for new ecommerce stores is test multiple platforms, but the power of Amazon makes it a cornerstone.
Tips for Handling Amazon Fees & Remaining Profitable
While the commission structure may seem intensive at first, sellers can absolutely maintain strong margins selling on Amazon by following some best practices:
Profit Optimization Tips:
- Carefully audit fees using provided Calculators before determining pricing
- Factor fees into your margins from day one
- Experiment with prices to allow room to absorb costs
- Boost efficiencies with Fulfilled By Amazon (FBA) to reduce operational costs
- Enroll in Amazon Programs that provide fee discounts like Vine Reviewer Program
- Ensure high quality listings and SEO to maximize sales volume & order sizes
Following this kind of profitability framework has allowed my clients to become quite successful on Amazon, even with the fee structure.
And let‘s remember that these charges allow us to access perhaps the greatest revolution that‘s happened in retail history. Amazon has fundamentally changed commerce – so smart sellers adapt to take advantage!
I hope this complete overview breaks down exactly what Amazon Marketplace fees entail in a way that empowers your business. Please reach out if you need any specific guidance tailored to your products – I‘m always happy to advise.
