If you’re just starting to sell on Amazon, or even if you’re just thinking about it, you may be wondering what Amazon seller repay is. As one of the world's largest marketplaces, Amazon isn’t, predictably, free for businesses.
In return for accessing a platform to grow your business and promote your sales to a broad target audience, you’ll be charged for using Amazon’s services, including programs 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 if you have an Amazon seller account.
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 who understands how e-commerce works. We’re here to help.
Read on to find out everything you need to know about Amazon seller repay charges.
What Are Amazon Seller Repay Charges?
At the end of every monthly billing cycle, Amazon collects service charges in a timely fashion. These service charges include closing, selling, as well as referral fees. However, if you’re unable to cover all your monthly fees, Amazon will implement a seller repayment charge. This is usually followed by Amazon deducting the monthly fees from your latest disbursement. If you don’t have enough funds, Amazon will charge the card on your file. In other words, Amazon Seller Repay is the initiated charge following any failed attempt to deduct regular monthly seller fees.
Paying attention to your seller account is crucial to ensure that these fees don’t end up eating into your profit.
Amazon Seller Account Types and 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 will be charged a £0.75 fee for every product you sell, along with any variable closing fees or referral fees - there’s no monthly subscription fee. This makes the Individual Seller Account best suited to e-commerce businesses that sell fewer than 40 products per month.
Professional seller account
The Professional Seller Account will set you back by £25 each month plus variable closing fees and referral fees, but doesn’t have individual product charges. This makes it suited to businesses with a higher volume of sales, as the £0.75 per-item fee from the Individual Seller Account can add up.
If you find the costs of maintaining a Professional seller account too high, you can always downgrade to an 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.
For every item you sell 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. The total sales price is the total amount paid by the buyer, inclusive of the item price and any gift wrapping or delivery charges.
A £0.50 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. The closing fee for books is now £1.00.
High-volume listing charges
If you have a large number of active non-media products on Amazon’s listings that were created at least 12 months ago, haven’t sold within those 12 months, and had an active offer on it at some point, you’ll be subjected to a high-volume listing fee.
This is only applicable if you go beyond 2 million items in a given month, and the £0.0003 fee per item will only apply to the highest number of items above the 2 million threshold at any time during that given month. The high-volume listing charge will be calculated monthly and reflected on your next month's statement.
For example, Elizabeth listed a total of 3 million active non-media items in September. The applicable high-volume listing fee for September would be £300 (3,000,000 - 2,000,000 SKUs = 1,000,000 SKUs x £0.0003).
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, minus the refund administration fee of £5.00 or 20% of the applicable referral fee, whichever is lower.
For example, Elizabeth refunds a buyer the £10.00 total sales price of a product in a category with a 15% referral fee. This makes Elizabeth’s refund administration fee £0.30 (£10.00 x 15% referral fee = £1.50).
How Can I Avoid Amazon Seller Repay Charges?
As an e-commerce business owner, the last thing you want is to see your Amazon seller account in deficit. Here’s three actionable steps you can adopt to steer clear of these unwanted charges:
Stay on top of payments
If you’re aware that you’re not selling much and you might be lacking funds in your Amazon seller account, take the initiative and pay off the charges that are due with your credit card. 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.
Keep track of what you owe
Surprise charges may affect your profit margin as an ecommerce owner. The best way to prevent this 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.
Consider the best account for your seller profile
If you have a Professional account but you aren’t 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.
Can I Cancel 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. Bear in mind 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.
Grow Your Business Without the Stress
At Osome, we’re always here for you. Selling via Paypal on Amazon and Square on Etsy? No problem. Simply connect your Amazon, Square, Shopify, or whichever platform you use, in just 2 minutes. We convert their statements into easy-to-read reports so you can see fees from platforms, warehouses, deliveries etc. as separate lines, all with correct tax categories. And if you sell outside the UK, we can help you file VAT there too.
Work with a dedicated accountant who specialises in e-commerce businesses and will respond to any queries within 24 hours, giving you the support you need for stress-free e-commerce accounting.