Selling on Amazon can be quite profitable, but there are several fees associated with the platform that must be taken into consideration.
This blog post is about Amazon Seller Repay and what you need to know to avoid incurring unwanted fees on your account as an e-commerce seller. Let’s get started.
What Is Amazon Seller Repay?
Amazon Seller Repay is a fee that Amazon takes out of your registered credit card to cover past unpaid charges when your Amazon account balance is insufficient. If there’s nothing there, it will make a second attempt and bill your credit card to collect these fees.
When Do I Incur Amazon Seller Repayment Charges?
By default, Amazon deducts the fees from your account balance during each billing cycle. However, if there isn’t enough money in the balance to cover all the charges, it will make an additional attempt by charging your credit card for those same fees. This charge should appear on your next statement as a “seller repayment” entry – and can come across as quite confusing or disruptive unless you know its presence beforehand.
Things To Know Before Selling On Amazon
To avoid being slapped with a seller repayment fee, keeping tabs on all your selling fees is important.
Selling on Amazon can be lucrative, but be aware that various fees exist to start a successful online business.
What Fees Does Amazon Charge
Understanding Amazon’s fee structure is vital to selling on Amazon. Below are the main components:
Professional seller account: Professional sellers are usually more devoted to their Amazon business and pay $39 monthly subscription fees to extend their selling privileges. Only professional seller has access to most Amazon APIs and selling reports and can be allowed to sell on all product categories.
Referral Fees
Amazon’s referral fees are a significant part of its cost structure for selling on the platform. Depending on your product category, Amazon takes a percentage of each sale as a referral fee, ranging from 6% to 20%. Amazon will deduct an appropriate referral fee (calculated in percentage) from the total sale price, excluding the tax.
FBA Fees
If you are using Fulfillment by Amazon (FBA) to fulfill your orders, additional fees must be considered. Their services include:
Product size tier: Product size tiers are measurement categories based on a packaged item’s unit weight, product dimensions, and dimensional weight.
Product size tier
Unit weight
Longest side
Median side
Shortest side
Length + girth
Small standard-size
16 oz
15 inches
12 inches
0.75 inch
n/a
Large standard-size
20 lb
18 inches
14 inches
8 inches
n/a
Small oversize
70 lb
60 inches
30 inches
n/a
130 inches
Medium oversize
150 lb
108 inches
n/a
n/a
130 inches
Large oversize
150 lb
108 inches
n/a
n/a
165 inches
Special oversize
Over 150 lb
Over 108 inches
n/a
n/a
Over 165 inche
Shipping weight: The shipping weight of an item is determined by either its unit weight or dimensional weight.
Dimensional weight: It calculates the volumetric weight of a package using the package’s length, width, and height. It is sometimes used instead of unit weight to determine the shipping weight.
Fee category: Products from different categories will charge you different fee types.
Fulfillment Fee for Standard-size product tiers
Most products (non-dangerous goods, non-apparel):
SHIPPING WEIGHT
FULFILLMENT FEE
Small Standard
4 oz or less
$3.22
4+ to 8 oz
$3.40
8+ to 12 oz
$3.58
12+ to 16 oz
$3.77
Large standard
4 oz or less
$3.86
4+ to 8 oz
$4.08
8+ to 12 oz
$4.24
12+ to 16 oz
$4.75
1+ to 1.5 lb
$5.40
1.5+ to 2 lb
$5.69
2+ to 2.5 lb
$6.10
2.5+ to 3 lb
$6.39
3+ lb to 20 lb
$7.17 + $0.16/half-lb above first 3 lb
Apparel:
SHIPPING WEIGHT
FULFILLMENT FEE
Small standard
4 oz or less
$3.43
4+ to 8 oz
$3.58
8+ to 12 oz
$3.87
12+ to 16 oz
$4.15
Large standard
4 oz or less
$4.43
4+ to 8 oz
$4.63
8+ to 12 oz
$4.84
12+ to 16 oz
$5.32
1+ to 1.5 lb
$6.10
1.5+ to 2 lb
$6.37
2+ to 2.5 lb
$6.83
2.5+ to 3 lb
$7.05
3+ lb to 20 lb
$7.17 + $0.16/half-lb above first 3 lb
Dangerous goods:
SHIPPING WEIGHT
FULFILLMENT FEE
Small standard
4 oz or less
$4.19
4+ to 8 oz
$4.48
8+ to 12 oz
$4.64
12+ to 16 oz
$4.37
Large standard
4 oz or less
$4.64
4+ to 8 oz
$4.89
8+ to 12 oz
$5.03
12+ to 16 oz
$5.34
1+ to 1.5 lb
$6.00
1.5+ to 2 lb
$6.29
2+ to 2.5 lb
$6.56
2.5+ to 3 lb
$6.85
3+ lb to 20 lb
$7.63 + $0.16/half-lb above first 3 lb
Other factors will also influencer the fee, for instance:
Seasonality
Amazon fulfillment fee is usually higher in the peak season (October – December).
Units stored in the fulfillment center for 271 to 365 days will be charged $1.50 per cubic foot.
However, for units stored for more than 365 days in the warehouse, the fee rises to $6.90 per cubic foot or $0.15 per unit, whichever is greater.
This fee is paid monthly in addition to the monthly inventory storage fee.
However, if your products are eligible for the following programs, the fulfillment fee might vary:
FBA Dangerous Goods Program
If you are dealing with items that contain hazardous materials or substances such as inflammable, pressurized, corrosive, and other potentially dangerous ingredients while storing, transporting, or handling them, it is essential to check the FBA Dangerous Goods Identification Guide.
Notably, ‘dangerous goods’ (also called hazmat) encompass consumer products like laptops, smartphones, household cleaners, spray paints, and cosmetics, which also need attention.
These products may incur different FBA fees, and sellers must remember that.
SBA (Small And Light) Program
This program helps sellers reduce the cost of fulfilling orders for small and lightweight FBA inventory priced under $12. As a result, products enrolled in this program incur lower fulfillment fees than others.
However, products must meet all three requirements:
Measure less than 18 (length) x 14 (width) x 8 (height) or less in inches
Weigh 3 pounds or less
Priced $12 or less
Notice that products from certain categories, such as FBA-prohibited, adult, dangerous, and temperature-sensitive products, are not eligible for this program.
Refund Administration Fees
The refund administration fee is charged when a customer returns an item under Amazon’s A-Z Guarantee program. This fee covers the cost of restocking, repackaging, and testing the returned product before it can be sent to another customer. This fee is $5.00 or 20% of the product’s referral fee (whichever is lower). Though not
Closing Fees
The Closing Fee is an extra Amazon Referral Fee that applies only to commodities like CDs, books, movies, and video games.
A flat fee ($1.80) applies to each item, regardless of the item’s price. In addition, whether you are selling as an individual seller or have a professional account, you will be charged a closing fee if you sell products in the abovementioned categories.
High-Volume Listing Charges
This fee applies to sellers who maintain more than 100,000 active listings in their accounts. Those who dropship on Amazon are most likely to be affected.
If you have that many listings and do not have a sale from any seller in the past 12 months, Amazon will charge you an additional monthly fee of $0.05/ASIN for a high-volume listing fee.
The first 100,000 ASINs meeting these criteria will not be charged.
Advertising Costs
Amazon sellers must also consider the cost of advertising their products on the platform. Advertising costs vary depending on the type of ad you create or place. They may not look huge initially, but they can add up fast.
Other fees may also affect your profit margin and add up to your operation cost, including:
Avoiding Amazon Seller Repay Charges: Tips And Tricks
All these fees above can add up to an overwhelming amount, especially when you are a new seller on the Amazon marketplace.
The best way and the only way to avoid Amazon seller repayment charges is to always keep an eye on all the potential costs and fees and your account balance and ensure there is enough money in the balance to cover all the fees. It’s also important to maintain your fee payments in advance or at least keep your payments up-to-date.
Keep Track Of your Regular And Additional Selling Fees
It’s important to keep track of all your selling fees and expenses to better manage your costs.
You can also check the fees’ details by downloading your Settlement Report.
By understanding this fee structure, it will be easier for you to calculate the profit margin of each product and project the business development.
Keep Track Of Your Cash Flow
Maintaining a good income flow is another key to successfully managing your Amazon seller account and avoiding unexpected charges. Ensure you keep track of your cash flow and plan for any anticipated fees so you don’t incur a Seller Repayment charge.
This is why managing your cash flow and monitoring all the selling fees is important. With this knowledge, you can better manage your selling costs and make informed decisions while managing your Amazon store.
Frequently Asked Questions
Why am I being charged for an Amazon seller account?
Some of the charges you may be seeing include subscription fees for the Marketplace and individual product sales, referral fees when selling items on Amazon, storage fees for warehousing or fulfillment services, order handling fees for preparing your orders, and return administration fees.
How often do I need to review my Amazon Seller Repay charges?
It’s highly recommended to review your monthly charges to catch any irregularities, incorrect fees, or other discrepancies. Ensuring transparency with your finances is an essential step that will ensure the success of a business – Amazon sellers included!
What can I do if I find inaccuracies in my Amazon Seller Repay account?
If you find inaccuracies in your Amazon Seller Repay account, it is important to take action quickly. The best thing you can do is to contact Amazon’s customer service team as soon as possible and explain the issue.
8-figure Amazon seller and serial online entrepreneur since 2015. Research and practice various online business models, and apply his in-depth learnings to further expand and grow his businesses as well as help others to achieve greater successes. Ex-VP of a high tech VC in Vancouver and a Management Consultant with over a decade of experience in the industry. Master's Degree from HEC Paris.
