Amazon sellers are paying half of what they receive to Amazon in fees, according to a report from Marketplace Pulse, which it says is up from 40% five years ago.
The report said sellers have paid the same transaction fee for over a decade, which is an average 15% – so how is that possible? “Sellers are paying more because Amazon has increased fulfillment fees and made spending on advertising unavoidable,” according to the report.
Marketplace Pulse acknowledged that total fees vary depending on the category, product price, size, weight, and the seller’s business model. But it analyzed P&Ls from a sample of sellers and found the following:
“A typical Amazon seller pays a 15% transaction fee (Amazon calls it a referral fee), 20-35% in Fulfillment by Amazon fees (including storage and other fees), and up to 15% for advertising and promotions on Amazon.”
Marketplace Pulse said the increase is not a result of sellers using more services, but rather, it said the same services have gotten more expensive (FBA) or unavoidable (advertising). “Amazon doesn’t set advertising prices, but as more sellers choose to advertise, advertising gets more expensive due to competition.” In order to get exposure and sales, advertising on Amazon is not optional, it claims.
EcommerceBytes asked Amazon about the report. A spokesperson for the company provided the following statement:
“While the numbers laid out in this study are not an accurate depiction of the cost to sell on Amazon, it is true that Amazon is investing more than ever in supporting the growth of our selling partners and helping them achieve record sales.
“We offer a wide range of features and services to help our selling partners grow their business, or sellers can choose to handle many of these logistics themselves. Sellers who choose to purchase optional logistics or advertising services from Amazon do so because they see incremental value to their business.
“Fulfilment by Amazon – where we store, pick, pack, ship, and provide customer service for products enrolled – remains an average of 30% less expensive than standard-shipping methods offered by other major third-party logistics providers, and an average of 70% less expensive than comparable two-day shipping alternatives.
“Many of our selling partners have built and run their businesses without advertising; if they choose to advertise their products, they have many service providers to choose from. For additional information on recent fee changes and what’s driving them, see here.”
The post on Marketplace Pulse describes the dilemma that Amazon sellers face and is well worth a full read. Let us know what you think, and what percentage of your marketplace revenue goes to the marketplace.
