Sell on Amazon and save costs! That's how it's done

Earning money with Amazon is not only possible as a large and well-known company. Even as a small seller, you can play along on the gigantic marketplace. Of course, there are also costs involved.

But did you know that you can easily avoid certain costs when selling on Amazon? If you want to know which ones they are, then read on.

You don't just want to sell in Germany? Or do Do your products come from abroad?

As soon as you act on Amazon in other currencies, e.g. if you also offer your products in Great Britain, you can expect additional costs! Because the currency exchange at Amazon runs with an exchange rate surcharge. ³

Avoid these fees with Wise's free multi-currency account. You can use it to convert your money into EUR at the official mid-market rate, i.e. without surcharges, and save.

Pay your suppliers directly in their currency and also save when purchasing the goods. Because with Wise you can send money in over 50 currencies from a single account. And that at extremely low fees.

Fixed fees for dealers

As a seller on Amazon, there are different ways in which your fixed fees are calculated. On the one hand, you have the option of running your sales activity via a subscription.

You will be charged a monthly price of 44.85 EUR. This allows you to upload and sell as many products as you want. There is also a sales fee, which is presented in more detail in the next section.

The other option is that you register as an individual seller without a monthly fee. The monthly fee of 44.85 EUR then does not apply, but you pay a fee of 1.14 EUR per item sold.

It's only worth doing if you expect to sell few items on Amazon. Because from 40 items sold, the monthly basic fee is more worthwhile. You can start your first months without any obligation and only pay when you sell something.

It is also worth mentioning that the previous prices include sales tax. If you are exempt from sales tax, the monthly basic fee is reduced to 39 EUR and the fee per item sold to 0.99 EUR. ¹

You are usually exempt from sales tax if you operate as a small business owner. You are always there if you made less than 22,000 EUR in sales in the previous year and this is likely to be less than 50,000 EUR in sales in the current year.

Fees when selling

In addition to the monthly basic fees or the sales price per item, there is also a variable sales fee that causes costs when selling on Amazon. It is calculated differently depending on which product category the item belongs to.

For books, music, videos, and DVDs, the sales fee is initially 17.25% (15% if not subject to sales tax) on the product price of the item. Shipping costs are not included.

Then there is a variable completion fee that depends on the subcategory and the destination country of the buyer.

When shipping to Germany, the variable acquisition fee for each of the 4 categories is EUR 1.16 (1.01 excluding VAT). After that, however, the costs are different.

If a DVD were to be sent to the EU, Switzerland or Liechtenstein, the fee would be EUR 2.20. For shipping to the rest of Europe 10.25 EUR and to the rest of the world 8.42 EUR. The exact price table is available from Amazon. Two examples to illustrate this.

Example 1:

You sell a DVD to a customer in Germany for EUR 20 and are exempt from sales tax

The sales fee is EUR 20 * 15.00% = EUR 3.00.

The variable acquisition fee is EUR 1.01.

A total of 4.01 EUR fees are incurred.

Example 2:

You sell a book to a customer in the US for EUR 18 and are subject to sales tax.

The sales fee is EUR 18 * 17.25% = EUR 3.11.

The variable acquisition fee is EUR 3.23.

A total of 6.34 EUR fees are incurred.

For all other product categories that do not belong to these four, the price calculation works differently. There the sales fees are calculated based on the total income. So including fees for shipping, gift wrapping, taxes, and customs.

For electronics, this would be e.g. B. 8.05%, for musical instruments 13.80%, food & beverages 17.25% and for a variety of other products 17.25%. ¹

In this case, it is not directly relevant to your costs where the product is shipped to.

Amazon FBA fees

Amazon FBA stands for Fulfilled by Amazon. This means that the products are stored at Amazon and shipped from Amazon. This means that customers can benefit from fast Amazon shipping and Amazon prefers the products in the search results.

Amazon does not charge a basic fee for this service and there is no “minimum value”. The costs are calculated based on the required storage space and a flat shipping fee. Optionally, you can also have Amazon take over the disposal.

On the one hand there is the Small & Light program. If the product has a price of up to 10 EUR, weighs no more than 225 g and the dimensions are a maximum of 33.5 x 23 x 4.6 cm, it can be shipped over this. The fees are then lower.

Otherwise, the price for shipping depends on the size and weight. A product that is sent with a standard package of approx. 45 x 34 x 26 cm and weighs approx. 1.5 kg costs 4.59 EUR for shipping. If it weighs 11 kg, the shipping costs would be 6.25 EUR. ²

The storage fee depends on the space required in cubic meters, the product category and the season. In the high season from October to December, storage is more expensive. Clothing and shoes can be stored more cheaply than other items.

Currency exchange costs

If you are active on several marketplaces at Amazon, for example at Amazon.co.uk or Amazon.com, you also have income in different currencies.

You can use the Amazon currency calculator service to have the foreign currencies paid out to your bank account herein Germany. So there are additional costs for selling on Amazon, which is included in the exchange rate

You can save a lot of money here with the Wise multi-currency account. Because this gives you individual bank details for EUR, USD, GBP, AUD, and NZD, which you can store on Amazon.

So you can withdraw the money directly without paying the fees included in Amazon's exchange rate. You can then simply use Wise to exchange money. The advantage for you is that Wise always uses the fair mid-market rate.

This is the only real exchange rate with no premium. It corresponds roughly to what you get displayed on Google.

At the same time, you can also save on purchases, as you can, for example, buy more goods directly with the proceeds from Amazon. The account with Wise is free and there is only a small fee for transfers.

What are the costs for returns?

The cost of a return when selling on Amazon depends on why the item is being returned. The use of the FBA program also has an impact.

In general, if the item is returned due to a defect, you will have to pay the return costs

If you work with FBA, you will incur a fee for returning a customer. However, this only applies if the product was sold in one of the categories of watches, jewelry, clothing or shoes, and handbags. This processing fee corresponds to the amount of the total shipping fee for the respective product

If a product comes back, Amazon withholds 20% of the sales fee up to a limit of 5 EUR and reimburses you for the remaining 80%. For media products (books, music, videos, and DVDs), the entire fee will be reimbursed

Goods that have been taken back from Amazon can now go two ways: If the product is still in order and only needs to be repackaged, you can have it sent to your home. This is managed under remission at Amazon and costs differently depending on size and weight. A standard size package weighing 2 kg e.g. B. 0.90 EUR.

If the goods are too damaged and can no longer be sold, you can also have them disposed of by Amazon. A fee also applies here, depending on size and weight. For example, EUR 0.45 for a standard size package weighing up to 1 kg

Conclusion on selling on Amazon

Amazon's fee structure is anything but slim. With the FBA program, Amazon offers a comprehensive service for all sellers who want to give up shipping. However, this causes extra fees.

On the other hand, you can easily avoid the costs of changing currencies when selling on multiple Amazon marketplaces. Simply deposit the bank details of your free Wise multi- and benefit from the fair mid-market rate. currency account