29 March 2023
Amazon Seller Central vs Vendor Central: Which is Better for Your Business?
TweetLinkedInShareEmailPrint If you’re considering selling your products on Amazon, you have two main o...
Amazon FBA is a robust and convenient business model, but sellers should know all the fees before they get into it. Amazon charges a number of fees, including but not limited to monthly subscription fees, referral fees and FBA fulfillment fees. It’s important to stay on top of these fees, because Amazon is very punctual in collecting them every month. This is where Amazon Seller Repay charges come in, which we will explain further in this article.
First, before we get into what Amazon Seller Repay charges are, we need to refresh our memory on all the fees Amazon charges. If you’re a budding entrepreneur looking to enter the Amazon Seller space, this will be useful for you!
Amazon charges a $39.99/month fee for Professional Seller Plan. Most sellers choose this, for the Individual Plan it will cost you $0.99 per unit sold. We recommend the Professional Plan, because the Individual Plan is far too rudimentary.
For every sale, Amazon charges a percentage referral fee from the total sales price (excluding taxes). Referral fees can vary from 3% to 45% depending on product category. The screenshot below only shows a part of the table. You can find a comprehensive outline of referral fees for each category here.
For every unit sold, Amazon charges FBA fees that depend on product type, size tier of your product and shipping weight. Like referral fees, these fees are highly specific to those three dimensions. Once again, the screenshot below only provides a snapshot of the full table. You can find a detailed outline of Amazon fulfillment fees here.
Between the 7th and 15th of the month, Amazon charges storage fees based on the type of product, the month, and the size tier of your product. These fees are more expensive in the latter part of the year from October to December, and for dangerous goods products.
Long term storage fees are charged for inventory that’s been sitting in an Amazon Fulfillment Center for over 365 days. These are charged monthly between the 18th and 22nd of each month. Long term storage fees can be staggeringly expensive because they are charged per unit stored! Further details on these fees can be found here.
Do you have inventory that is simply not selling, and you’d like to discard it? Well, that also costs a fee, which is called the FBA disposal order fee. These fees are charged per unit disposed, and the charge depends on the shipping weight per unit. Disposing units from your Amazon FBA store can come out to be very costly.
You can find a more detailed outline of FBA disposal fees here.
Returns processing fees are charged whenever a customer returns your product. First, Amazon will assess the returned item, and then after that fees are charged per unit returned based on the size tier of your product. This is why it’s important to ensure the quality of your products before selling them on Amazon.
A more detailed explanation of these fees including an example is provided here.
Amazon charges a fee every time you issue a refund to a dissatisfied customer. Not only do you lose money equivalent to the original sales price, you also get charged a little extra for issuing a refund. This, and the Returns Processing Fee mentioned earlier are some of the “mitigating” measures Amazon takes to ensure high quality products from Amazon Sellers.
Refund administration fees are charged per unit returned, and depends if you’re refunding multiple quantities of the same item, or multiple different items from the same order. A detailed overview can be found here.
Amazon has a lot of other hidden fees that are highly product-specific. For example, the “Special handling fee” which only applies to flat-screen TVs that are 42 inches or larger, and the charge is $40 per unit fulfilled! Similarly, a “Closing fee” gets applied to products sold in the categories of – Books, DVD, Music, Software & Computer/Video Games, Video Game Consoles, and Video Game Accessories.
There is also the “Rental book service fee” and the “Lithium batteries fee” and even a “High-volume listing fee!” Specific details for all of these can be found on the Amazon Help page – Selling on Amazon fees guide.
As you can see Amazon has an absolute myriad of fees when you really take a closer look at their guidelines. Amazon is very prompt in collecting these charges, and will almost always do it exactly on time. Due to all these little hidden fees, sometimes Amazon Sellers don’t realise how easily they start stacking up. Amazon keeps withdrawing from your Account Funds, and at some point, you’re going to hit zero.
The unfortunate reality is that even once you hit zero funds in your Amazon Account, you will continue to be charged in a timely basis. These is what an “Amazon Seller Repay Charge” or a “Seller Repayment” charge is. Basically, if you weren’t able to settle your charges due to insufficient funds in your account, this warning will appear in your Payments section.
The warning means that Amazon will initiate the same charge again at the end of every billing cycle, until it is settled. Without any funds in your account, the repay charges are then charged to your credit card, and are labelled “Amazon Repay.” Have you seen it before and been scratching your head at what it could possibly be? Well now you know!
So how do you avoid these scary Amazon Seller Repay charges? Well, it’s simple. Keep your eyes peeled, and learn how to manage your cash flow. There are no magic tips that can help you avoid these fees, and no secret code to crack. To avoid Amazon Seller Repay charges you need to do some good old-fashioned business management.
Start off by checking your Payment Reports on a frequent basis, we recommend as frequent as once a week. It’s not hard! Take an hour out of your day to keep abreast of any surprise charges.
You can find your Payment reports in Seller Central under Reports->Fulfillment->Payments. There’s four reports to look through- Fee Preview, Inventory Storage Overage Fees, Monthly Storage Fees, and Long-Term Storage Fee Charges. There is also a Reimbursements report, but that is not a fee but actually Amazon reimbursing you for any of your inventory that was lost or damaged in their warehouses.
After you’ve checked out and ideally consolidated the information from this report, we recommend you to make an Amazon FBA Cash Flow Forecast. Making a cash flow forecast is simpler than you think, and if you click the link you can find our step-by-step guide to doing so!
Most often, the costs Amazon Sellers struggle most to cover are Amazon PPC costs. Running ads on a competitive marketplace like Amazon, where CPCs are increasing day by day, is incredibly expensive. High ACoS can bleed you dry, which is why we highly recommend using Amazon PPC Automation Software to bring that ACoS down and save you those precious dollars.
Like every business, even for Amazon FBA, it all comes down to being well-informed and managing your cash flow. Amazon paints a very lucrative picture for Amazon FBA on the surface, and they’re not lying! Amazon FBA is an incredibly convenient method of eCommerce in 2021, but not every single piece of information can be displayed outright.
Being aware of the various fees require deep research into Amazon fees that every Seller needs to do. Thankfully, we’ve done it for you! We hope you found this article helpful, and wish you the best in your Amazon business!
If you have questions or insights to share, please feel free to post them via the comments section. Please also consider joining our Facebook Group where we discuss any questions you may have about running an Amazon business.
We are SellerMetrics, our Amazon PPC Software helps Amazon sellers, brands, KDP Authors and agencies navigate Amazon Advertising PPC via bid automation, bulk manual bid changes, and analytics.