Amazon Fees: Profit-First Planning for Sellers

You made $50,000 in sales last month. Amazon deposited $32,000. Where did $18,000 go?

Amazon fees include referral commissions, storage fees, fulfillment fees, advertising costs, and long-term storage charges that stack up fast. Most sellers underestimate the total take and price products based on gross revenue instead of net profit.

Without accurate fee tracking, you lose visibility into which products actually make money or if your margins can survive a price war.

This guide shows you how to calculate Amazon fees at every stage, build profit-first pricing strategies, and automate fee reconciliation so your accounting reflects true profitability.

Why Amazon fees kill 40% of seller profits (and how to avoid it)

Amazon fees silently erode up to 40% of gross revenue for the average seller. Many sellers focus on top-line sales, only to discover that after fees, their take-home is far less than expected.

Reddit post about Amazon fees

For example, a seller with $100,000 in sales may see only $60,000 left after Amazon fees, before even accounting for product costs.

Profit-first planning means focusing on net profit after all fees, not just revenue. Most sellers underestimate the true impact of fees until it is too late. To protect your margins, you need to know exactly where your money goes.

Suggested read: From Amazon to Webgility: Tales from an Ecommerce Pro

Every Amazon fee explained: Your complete breakdown

Amazon’s fee structure is complex but predictable if you know what to look for. There are five mandatory fees and more than a dozen optional or situational charges. Understanding each is the first step to protecting your profit.

Mandatory fees

• Referral fee: Percentage of each sale (typically 8-15%, varies by category)
• Subscription fee: $39.99/month for Professional sellers or $0.99/item for Individual sellers
• Fulfillment fee: Per-unit charge for FBA, varies by size and weight
• Shipping fee: Paid by FBM sellers, varies by carrier and destination
• Closing fee: $1.80 per media item (books, DVDs, etc.)

Common optional/variable fees

• Long-term storage fee: Inventory held >181 days triggers $6.90+/cu ft fees
• High-volume listing fee
• Refund administration fee
• Removal/disposal fee
• Returns processing fee
• Peak season fulfillment surcharge
• Coupon redemption fee
• Labeling/prep fee
• Aged inventory surcharge
• Advertising costs
• Gift wrap fee
• Inventory placement service fee

Suggested read: Large Amazon Seller’s Guide to Expanding Product Lines

Comparing seller plans: Individual vs. Professional

Choosing the right plan can save you thousands if you know your break-even point and feature needs. Amazon offers two main plans:

• Individual: No monthly fee, $0.99 per item sold, limited features
• Professional: $39.99/month, no per-item fee, access to bulk tools, promotions, and restricted categories

Break-even example: If you sell more than 40 items per month, the Professional plan is more cost-effective.

• 41 sales x $0.99 = $40.59 (Individual plan fees)
• $39.99 (Professional plan fee)

Professional plan unlocks:

• Bulk listing and inventory tools
• Access to Amazon Advertising
• Eligibility for Buy Box
• API and reporting features
• Ability to sell in restricted categories

As your sales and channels expand, tracking fees manually becomes a major bottleneck.

Suggested read: QuickBooks and Amazon Integration in 6 Steps

Tracking fees across channels: Why visibility matters as you scale

Tracking fees across Amazon, Walmart, Shopify, and eBay quickly becomes unsustainable as order volume grows.

Without automated reconciliation, sellers spend dozens of hours each month piecing together payout reports, fee breakdowns, and settlement data from multiple platforms.

Most never gain clear visibility into which channels or products actually drive profit.

Danwidth, an accounting consultant serving ecommerce businesses, saw his clients drowning in manual reconciliation work.

After implementing Webgility, his clients gained complete visibility into channel-specific profitability and recovered hidden costs that were eroding margins.

They could finally see how much profit or loss they were making in each channel.

His clients collectively saved nearly 1,000 hours of busywork in the first few months of 2021, and that time went straight into strategic growth activities.

Sellers using accounting automation tools like Webgility reconcile payouts, fees, and COGS in real time, eliminating hours of manual work and revealing true margins by channel and SKU.

Save up to 90% of time on reconciliation and month-end close.

Amazon fee variations by category

Amazon referral fees vary by category, and fulfillment choices (FBA vs. FBM) add another layer of complexity.

Table 1: Amazon fees breakdown

Here is a scenario. A $20 toy sold via FBA:

• Referral fee (15%): $3.00
• FBA fulfillment: $3.50
• Storage (1 month): $0.10
• Net before COGS: $13.40

Same toy via FBM:

• Referral fee: $3.00
• Shipping: $3.00
• Packaging: $0.50
• Net before COGS: $13.50

Automated fee mapping tools break down profitability by SKU and fulfillment method.

Even if you optimize for category and fulfillment, hidden fees can still erode your profit.

Suggested read: Amazon Seller Accounting Software Guide

Hidden and variable fees: Avoiding profit pitfalls

Ignoring hidden fees can wipe out your margin, making proactive tracking and inventory management your best defense. Key hidden fees include:

Checklist:

• Long-term storage: Inventory held >181 days triggers $6.90+/cu ft fees
• High-volume listing: >1.5M SKUs incurs $0.005/SKU/month
• Refund administration: Up to $5 or 20% of the referral fee per return
• Seasonal surcharges: Peak FBA fees Oct–Jan, 5-10% higher
• Removal/disposal: $0.23-$0.43 per unit to remove unsold inventory

A seller with 100 units sitting 365+ days pays $690 in long-term storage fees, often more than the inventory is worth.

Strategies:

• Maintain inventory turnover above 4x/year to avoid long-term storage
• Rationalize SKUs to stay below high-volume listing thresholds
• Monitor Amazon fee updates quarterly
• Bundle slow movers with best sellers to trigger sales and reduce storage days

Regular, automated reconciliation flags unexpected fees before they erode your margins.

To avoid surprises, you need a system for calculating true profit after every fee.

Suggested read: How to Increase Sales on Amazon

Calculating true profit: The 5-step Amazon profit audit

Profit-first sellers use a repeatable framework to calculate and monitor true margins. Here is the 5-step Amazon profit audit:

1. List gross sales: Start with total revenue, minus discounts and promotions.
2. Subtract all Amazon fees: Referral, fulfillment, storage, closing, and variable fees.
3. Subtract COGS: Your landed cost per unit.
4. Subtract shipping/returns: Include FBM shipping, packaging, and return costs.
5. Review for hidden/seasonal fees: Long-term storage, removal, surcharges.

For example, $10,000/month seller in electronics (FBA, 200 units):

• Gross sales: $10,000
• Referral fee (8%): -$800
• FBA fulfillment ($3.50/unit): -$700
• Storage (2 cu ft, 1 month): -$1.56
• COGS ($20/unit): -$4,000
• Returns (5% rate, $5/unit): -$50
• Net profit: $4,448.44 (44.5% margin before advertising and other costs)

Once you know your true profit, you can start to optimize your fee structure for even better margins.

7 proven tactics to cut Amazon fees

Data-driven sellers use real-time insights to bundle, price, and manage inventory for maximum profit. Here are seven tactics:

1. Bundle slow movers with fast sellers to reduce storage fees.
2. Adjust pricing based on channel-specific fees.
3. Prioritize high-margin SKUs for FBA, low-margin for FBM.
4. Use inventory turnover dashboards to avoid long-term storage.
5. Monitor for fee promotions and category changes.
6. Automate refund and return reconciliation.
7. Revisit the fee structure quarterly to catch new surcharges.

Dashboards that break down fees and profit by channel and SKU help you prioritize where to invest.

To implement these tactics at scale, you need a system that brings all your data together.

Suggested read: QuickBooks Class Tracking for Multi-Channel Ecommerce

How Webgility helps Amazon sellers with real-time fee tracking, reconciliation, and profit clarity

Webgility brings all your Amazon fees, orders, and payouts into one real-time dashboard so you can track true profit as you grow.

Key features include:

• Automated payout reconciliation
• SKU-level margin reporting
• Multi-channel fee mapping

Webgility connects Amazon, Shopify, Walmart, and accounting tools like QuickBooks and Xero, so you always know your true profit. Your financial data stays up to date in real time, your reconciliation happens automatically, and you can make pricing decisions based on actual margins rather than guesswork.

Book a demo with Webgility today.

Frequently asked questions (FAQs)

How can I keep track of all Amazon fees without spreadsheets?

Use automation tools like Webgility to sync fees, orders, and payouts into a single dashboard for real-time profit visibility.

When should I switch from the Individual to the Professional seller plan?

If you sell more than 40 items per month, the Professional plan usually saves you money and unlocks extra features.

What is a typical net profit margin for Amazon sellers?

Most Amazon sellers achieve 15-20% net profit margins after fees, but this varies by category and optimization.

How do hidden fees impact my Amazon profits?

Hidden fees like long-term storage, seasonal surcharges, and refund administration can quickly erode profits if not tracked and managed proactively.