Amazon Seller Fees Explained

Understanding Amazon’s fee structure is fundamental to running a profitable business on the platform. With 310+ million customers and £717 billion in 2025 sales, Amazon offers an unmatched sales channel. However, the fees can quickly erode your margins if you don’t know what you’re paying for.

This guide breaks down every fee you’ll encounter, shows you how to calculate your true net margin, and reveals strategies to reduce costs without sacrificing growth.

The Core Fee Structure

2026 Fee Landscape

Amazon made significant fee reductions in 2026 — FBA fulfilment fees reduced by average £0.26/unit in the UK. Low-Price FBA rates extended to products priced at/below £20. Category-specific referral fee reductions in Clothing, Home, Pet, and Grocery. Professional account subscription remains at £25+VAT/month. Individual account still £0.75/item with no Buy Box eligibility.

Amazon’s fees fall into several categories, and they compound quickly. Let’s examine each one.

Monthly Subscription Fees

First, you’ll choose between two account types:

• Individual Account: £0.75-0.99 per item sold (varies by region). No monthly fee. Best for sellers doing fewer than 40 sales per month.
• Professional Account: £29 per month (UK equivalent, varies by region). No per-item fee. Includes access to Seller Central tools, bulk listing options, and category restrictions. Recommended once you’re serious about scaling.

Most growing sellers use Professional accounts because the marginal cost per item (£25 ÷ number of sales) quickly becomes negligible once you’re doing volume.

Referral Fees: The Biggest Cost

This is where Amazon takes its largest cut. Referral fees are calculated as a percentage of your selling price (including shipping charges, if you include them in the price).

Average referral fee: 15%, but this varies by category from 5% to 20%.

Common category examples:

Always verify your category’s exact rate in Seller Central before finalising your pricing strategy. This fee is non-negotiable and unavoidable.

FBA Fulfillment Fees

If you use Fulfillment by Amazon (FBA), you pay per-unit fulfillment fees based on your product’s size and weight tier. These fees cover picking, packing, shipping, and customer returns. As of April 2026, a new fuel and logistics surcharge of 3.5% has been added to FBA fees.

FBA fees are tiered by size:

• Small Standard: Up to 1 lb, less than 18 inches on longest side. Example: £1.90-2.30 per unit.
• Large Standard: Up to 20 lbs or 18″+ on one side. Example: £6.10-9.20 per unit.
• Extra Large: Oversized items. £12.20+ per unit.

(Exact fees change quarterly. Check your Seller Central fee schedule for current rates.)

FBA fees are predictable and factored into your break-even calculation. The benefit: Prime eligibility, higher conversion rates, and Amazon handles customer service.

Storage Fees

Amazon charges monthly storage fees for inventory sitting in their fulfillment centres:

• Standard-size products: Typically £0.68 per cubic foot per month (Jan–September) and £2.25 per cubic foot per month (Oct–Dec during peak).
• Oversize products: £0.41 per cubic foot per month (Jan–Sept) and £1.28 per cubic foot per month (Oct–Dec).

Long-term storage fees: Items stored for 365+ days incur an additional £5.36 per cubic foot once per year. This incentivises you to turn inventory quickly.

Storage fees are a real motivation to forecast demand accurately and avoid dead stock.

Removal and Disposal Fees

If you remove inventory from Amazon’s fulfillment centres (or ask Amazon to dispose of it), you pay a removal fee, typically £0.38-0.50 per unit. If you ask Amazon to dispose of it instead, disposal fees apply (usually £0.38-0.76 per unit depending on size). Note: FBA Prep Services (which handled preparation of items before storage) ended in January 2026.

Other Fees You Might Encounter

• High-volume listing fee: If you’re a Professional seller with more than 5,000 active product listings in certain categories, you may pay a fee.
• Refund administration fee: In some cases, Amazon charges a fee if you issue a refund beyond the standard return window.
• Rental book service fee: Only applies if you sell books and enrol in the Kindle Textbook Rental programme.

FBM (Fulfillment by Merchant): A Lower-Fee Alternative?

If you handle your own fulfillment (FBM), you avoid FBA fees entirely. However, you bear other costs:

• Shipping costs: You pay for every shipment. Depending on weight and distance, this can rival or exceed FBA fees.
• Customer service: You handle returns, refunds, and inquiries yourself.
• Lower conversion rates: Products without Prime aren’t Prime-eligible, reducing customer appeal.

For most sellers, FBA remains the better choice despite the fees.

Advertising Spend: Not a Fee, But a Real Cost

Amazon advertising is optional but essential for most sellers who want to compete for visibility. The platform offers three main advertising types: Sponsored Products, Sponsored Brands, and Sponsored Display.

The key metric is ACoS (Advertising Cost of Sale): the amount you spend on ads divided by sales revenue from those ads.

Average ACoS: 29% across the platform, though high-performing sellers can achieve 15-20% and struggling sellers may see 40-50%.

At 29% ACoS, you’re paying approximately £0.29 for every £1.00 in ad-driven sales. This is why optimising ad campaigns is critical.

Calculating Your True Amazon Margin

Here’s the formula for your net margin per unit:

Net Margin = Selling Price − Product Cost − Referral Fee − FBA Fee − (Advertising Cost per Unit)

Let’s work through a real example:

Real-World Example: Baby Monitor

• Selling price: £40.00
• Product cost (inc. duty, shipping): £10.00
• Referral fee (15%): £6.00
• FBA fee (standard small): £2.50
• Monthly advertising spend for this product: £30 (across all your ad campaigns)
• Sales per month for this product: 20 units
• Advertising cost per unit: £30 ÷ 20 = £1.50

Net margin per unit: £40 − £10 − £6 − £2.50 − £1.50 = £20.00

Net margin percentage: 50%

This is healthy. But if you’re not tracking each cost, you might think you’re making £30 per unit (selling price minus product cost) when you’re actually making £20.

Total Take Rate

When you combine referral fees, FBA fees, and advertising spend, your total take rate typically ranges from 20-25%. This means Amazon and advertising platforms are taking 20-25 cents of every pound you make.

Knowing this helps you set realistic margin targets. A product with a 40% gross margin (selling price minus product cost) leaves 15-20% net after Amazon’s take.

Strategies to Reduce Your Amazon Costs

1. Right-Size Your Packaging

Packaging size determines your FBA tier. Moving a product from Large Standard to Small Standard can save £3-5 per unit. That’s significant at scale.

• Use packaging just large enough for your product plus protective material.
• Ask your supplier for help optimising dimensions.
• Test smaller packaging before full rollout.

2. Avoid Long-Term Storage Fees

Planning inventory is essential. If stock sits for 365+ days, you’ll pay £6.90 per cubic foot in additional fees. This spirals quickly.

• Monitor your stock age in Seller Central’s Inventory Health dashboard.
• Run inventory clearance sales before items age out.
• Use removal services strategically rather than letting stock accumulate.

3. Optimise Your Advertising

With average ACoS at 29%, small improvements compound. A 2% improvement (from 29% to 27%) directly increases your net margin by approximately 2% of sales.

• Negative keyword research: eliminate keywords that don’t convert.
• Bid adjustments: lower bids on underperforming placements.
• Seasonal pausing: turn off campaigns during low-demand periods.
• Search term analysis: identify patterns in what customers search for.

4. Increase Your Selling Price (Where Possible)

A £1 increase in selling price increases your net margin by £1 minus the referral fee (15% of £1 = £0.15). Net gain: £0.85 per unit. This is often easier than cutting costs.

• Use market research tools to understand competitor pricing.
• Test price increases on best-selling SKUs first.
• Bundle products to increase average order value.

5. Use Private Label to Improve Margins

Switching from white-label to own-label (private label) products can improve margins by 10-20% because you’re not competing on price with dozens of identical products.

Our founder, Trevor Ginn, grew Hello Baby from zero to £5m turnover on Amazon by investing in own-label products that differentiated the brand.

Frequently Asked Questions

What is the average referral fee on Amazon?

Amazon’s average referral fee is 15%, but this varies significantly by product category, ranging from 5% to 20%. Always check your specific category rate before calculating margins.

What is the total take rate on Amazon?

The total take rate on Amazon ranges from 20-25% when you combine referral fees, FBA fees, and advertising spend (with an average ACoS of 29%).

How much does Amazon FBA cost?

FBA costs include fulfillment fees (per unit, based on size tier), monthly storage fees (per cubic foot), long-term storage fees for items stored 365+ days, and removal fees. Exact costs depend on your product size and storage duration.

What’s the difference between Individual and Professional seller accounts?

Individual accounts charge £0.75-0.99 per item sold with no monthly fee. Professional accounts charge £29 per month with no per-item fee. Professional sellers also get access to advanced tools and category restrictions. (Prices vary by region/currency.)

Can I reduce my referral fees?

Referral fees are fixed by Amazon based on your product category. You cannot negotiate them. However, you can optimise your business by choosing categories with lower referral fees, right-sizing packaging to lower FBA fees, and improving advertising efficiency.

Should I use FBA or FBM to save on fees?

While FBA charges per-unit fees, most sellers find FBA.