Everything a seller needs to know about Amazon Referral Fee
Amazon’s revenue in the eCommerce market increased by 50% in 2020; more and more retailers will increase sales by joining the marketplace. It is essential to price products competitively, but it is also vital to factor in Amazon’s fees to ensure you make a profit. Being a seller is not always a bed full of roses. It takes a lot to establish yourself in the Amazon Marketplace. Ensure you are entirely mindful of what it will cost to sell on Amazon with Amazon referral fees.
Amazon takes a referral fee to promote the sales relationship between buyer and seller by subtracting a percentage of the total payment to the seller. The referral fee is implemented to each item and extras such as gift wrap and incorporates a closing fee but prohibits sales tax. Amazon charges lower applicable fees and fees delivered to you Amazon through a medium such as promotional fees that Amazon may provide from time to time. This does not ask certain sellers about warranties and other services.
What is Amazon Referral Fee?
The referral fee is defined as a fee Amazon charges a seller every time he sells a product. It is a percentage of the total sales price and usually 15%. The rate fluctuates based on the product category starting from 8% for personal computers and up to 45% for Amazon Device Accessories. These fees also vary as per the seller’s selling plan. There is a flat fee of £25 per month for the Professional selling plan and no per-item fee, whereas the Individual selling plan is a £75per fee for each item sold.
How much is the Amazon referral fee in the UK?
The referral fee is defined as a fee Amazon charges a seller every time he sells a product. It is a percentage of the total sales price and usually 15%. The rate fluctuates based on the product category starting from 8% for personal computers and going up to 45% for Amazon Device Accessories. These fees also vary as per the seller’s selling plan. There is a flat fee of £25 per month for the Professional selling plan and no per-item fee, whereas, in the Individual selling plan, there is a £75per fee for each item sold.
Why does Amazon charge a referral fee from a seller?
Sellers pay a referral fee for each item sold on Amazon. For all products, a percentage of the total sales price that buyer pays, including the product price, shipping charges, or gift-wrap charges charged by the seller, is subtracted as a referral fee.
How does Amazon calculate the referral fee?
Sellers pay a certain amount as a Referral Fee for each product sale on Amazon. Amazon subtracts a percentage of the total sales price, including any delivery or gift wrap charges as a referral fee. The referral fee percentage differs by category. Sellers also pay a shifting fee for all media products marketed.
Calculation
The selling price of the product + Shipping costs + Gift wrap charges + – Referral Fee applicable percentage of the total sales price including any delivery or gift wrap costs and VAT/import duties appropriate to the category = Total deposited to seller account.
However, there are a few changes made to Amazon referral fees in Europe that will be put into effect from 8 June 2021 and applicable across Amazon Europe stores, except where otherwise declared. All referral fee changes are inclusive of digital services tax (DST), wherever applicable.
Car & Motorbike excluding devices and accessories referral fee will be decreased from 15.3% to 9.18% for the portion of the total sales price above £45 and will remain unchanged at 15.3% for the sales price up to and including £45.
DIY & Tools
The referral fee will be increased from 12.24% to 13.26% for DIY & Tools collection in all sales prices.
Referral fee promotion on Clothing, Shoes, and Handbags
The referral fee promotion reduces the referral fee from 15.30% to 7.14%. The total sales price is more significant than £40 for Clothing, Shoes, and Handbags sold through FBA and Seller Fulfilled Prime, formerly catalogued to end on 30 April 2021. This promotion has been extended until 31 March 2022.
Cycling Accessories
From 1 April 2021, Amazon built a new Cycling Accessories category. The new class will reduce the referral fee on Cycling Accessories to 8.16% and retain the referral fee fixed for other Sports & Outdoors products at 15.3%.
Books
Effective from 25 January 2021, Amazon decreased the referral fee for Books from 15.3% to 5.1% for products with a total sales price up to £5.00 and remained unchanged at 15.3% for products with a total sales price greater than £5.00. Amazon also increased the closing fee to £1.00 per book sold while the closing fee for other media categories remains unchanged at £0.50 per media item sold. The different media categories are Music, DVD, Video, Video Games; Games, Accessories, Consoles, and Software.
Renewed fee
Starting on 8 June 2021, in addition to regular category referral fees, products sold in the Amazon Renewed program will be charged a Renewed program fee depending on the category. Renewed mobile phone devices and unlocked mobile phones will be charged 2% on top of standard category referral fees.
All other renewed products will be charged 1% on top of legal category Referral Fees.
B2B VAT Calculation Service for Referral Fees
Amazon currently charges Referral Fees on the item price, including the VAT calculated by the VAT Calculation Service for each transaction.
From 30 June 2021, for transactions that fall under the below-stated categories:
(i) business-to-business (B2B) intra-community supply of goods,
(ii) non-resident domestic reverse charge
(iii) exports to particular EU territories not included by EU VAT rules.
Amazon will begin to charge referral fees on the item price, including VAT rate in default ship-from the country chosen on the VAT Calculation Settings page. However, the current referral fee is €10.00.
Final Takeaway
Amazon can be an invaluable marketplace to sell on, but by lowering Amazon fees.
Selling on Amazon puts a seller on stage in front of millions of buyers with the potential to take the eCommerce business to the next level.
If you are an online Amazon seller, then you must have an intelligent tool that will guide your business towards success by targeting the brand story, right keyword, products research, analyzing competitors, fba calculator, and so much more. Get your ticket to success today!