Although Amazon is a relatively new player in the Singapore marketplace, it’s been ranked as one of the most reputable companies in the world. It can be hugely advantageous to small and medium-sized enterprises looking to grow their audience, build brand awareness and boost sales.
It’s important to remember, however, that these advantages come with a price tag. Whether you’re a new or experienced seller on Amazon, you should make sure you understand all the relevant fees and charges - particularly as Amazon is a totally different ball game to other e-commerce platforms.
As your company grows, are you also looking for a way to get on top of your finances to make faster decisions to scale up? You’ll need an experienced e-commerce accountant. We’re here to help.
Read on to find out everything you need to know about Amazon seller fees and charges.
What Are Amazon Seller Charges?
If you have an Amazon seller account, you’ll be charged for using Amazon’s services, including services such as Inventory Placement Service, Fulfillment by Amazon, Amazon Partnered Carrier program, Premium account services, and Advertising. Even if you’re not actively selling any goods on Amazon, you’ll still be expected to pay these charges.
Amazon will withdraw the charges for your seller account at the end of every billing cycle. However, if you have a zero account balance, Amazon will charge the card on your file. This is known as Amazon Seller Repayment. In other words, it’s a follow-up attempt to pay for charges you’ve incurred after the first failed payment.
Types of Amazon Seller Accounts and Relevant Fees
If you’re just getting started with selling on Amazon, you’ll first need to decide which account category best suits your business. There are two categories - Individual and Professional - which connect to your seller profile and are dependent on your sales volume and business strategy.
Here’s what the Individual and Professional seller accounts offer.
Individual Seller Account
As an individual seller, you don’t have to pay a monthly subscription fee but you will be charged a $1.07 (with GST), or $1.00 (without GST) fee for every product you sell, along with any variable closing fees or referral fees. Amazon recommends the Individual Seller Account to e-commerce business owners that sell fewer than 40 products per month.
Professional Seller Account
The Professional Seller Account has a monthly subscription fee plus variable closing fees and referral fees, but no individual product charges. This makes it suitable for businesses with a high volume of sales. Until 31 December 2022, the Professional Selling Plan fee is waived - after 31 December 2022, it will be priced at $32.05 per month, including GST.
As a Professional seller, you also get access to benefits such as order reports, bulk upload, special listing features and seller-customised shipping rates, as well as the potential to have your product as the Featured Offer on product detail pages.
If you find the costs of maintaining a Professional Seller Account too high, you can always downgrade to the Individual account. You can do this by going into your Amazon Seller Central account, choosing Account Settings > Tasks and Tools > Switch Your Selling Plan/Close Your Selling Account. Then you can select the option to downgrade to an Individual seller account.
Every time you sell an item on Amazon, you’re required to pay a referral fee. This is calculated as a percentage of the item’s total price and varies depending on the product category.
A $1.07 (with GST), or $1.00 (without GST), closing fee is charged on every media item sold through Amazon, including DVDs, videos, video games, video game consoles, video game accessories, computers, software, music etc. This fee is applicable to both Individual and Professional sellers.
When you sell an item, Amazon collects the amount paid by your customer, including the product price and any gift wrap, delivery, or other charges. Gift wrap services are only available for Professional sellers.
Amazon refund administration fee
In the event that you refund a buyer for an order that you’ve already received payment for, Amazon will refund you the referral fee you initially paid for the items minus the applicable refund administration fee of $5.35 (with GST), $5.00 (without GST), or 20% of the applicable referral fee (plus applicable GST) - whichever is lower.
Stephanie refunds a buyer the $10.00 total sales price of an item in a category with a 15% referral fee. Stephanie’s refund administration fee will be S$0.30 (S$10.00 x 15% referral fee = S$1.50, including applicable GST).
How Do I Avoid Amazon Seller Repay Charges?
Having a negative balance in your Amazon seller account is the last thing you want to see.
If you’re not selling a lot on Amazon, or aren’t staying on top of the fees you owe, you may find yourself slapped with a seller repayment charge. As such, it’s crucial that you keep track of your Amazon activities to be clear of the additional fees charged to your seller account.
Stay on top of what you owe
Surprise charges may affect your profit margin. The best way to curb this issue is to have a comprehensive understanding of your account’s cash flow. Make sure you know what’s coming in and going out of your account at any one time. Track any new charges you may accrue as well as the charges you’re incurring on a regular basis, the amount you owe, and whether you have sufficient funds in your Amazon seller account to cover payment.
Keep track of payments
If you’re aware that you’re not selling much and you’re lacking funds in your Amazon seller account, take the initiative and use your credit card to pay off the charges. Although you’re still paying out of pocket, you won’t get any unwelcome surprises at the end of your billing cycle when extra charges reflect on your bank statement.
Switch to the best account type for your seller profile
While a Professional account is complimentary in Singapore at the moment, you may wish to re-evaluate your seller profile in the future. If you have a Professional account but you’re not selling enough products to cover all the charges, consider downgrading to an Individual account instead. With an Individual account, you’ll only be charged when you sell a product, and the charges are generally lower.
Additionally, you could develop a fulfillment plan and couple it with strategic marketing to ensure a healthy level of sales, so that your Amazon seller account doesn’t risk going into deficit.
Can I Close My Amazon Seller Account?
If you’re no longer selling enough goods to cover your expenses and make a profit, you can close your Amazon seller account. Be aware though that Amazon doesn’t reinstate closed accounts, so if you want to sell on Amazon again in the future, you’ll need to set up a brand new seller account.
To permanently delete your seller account, simply request for account closure in Seller Central. Be sure to resolve all your transactions and remove your listings before closing your account. You can either use Amazon’s Listings Status feature to remove your product listings entirely but keep your account for future use, or simply suspend your product listings.
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