E-Reader companies that use the an Amazon Warehouse to store their e-readers and e-notes and sell their products on Amazon will now have to pay more. Amazon has increased it from 40% five years ago to 50% today. Amazon sellers are paying more because Amazon has increased fulfillment fees and advertising fees.This is the first time each sale surpassed 50% in 2022, according to a study by Marketplace Pulse, which sampled seller transactions going back to 2016.
A typical Amazon seller pays a 15% transaction fee, 20-35% in Fulfillment by Amazon fees (including storage and other fees), and up to 15% for advertising and promotions on Amazon. The total fees vary depending on the category, product price, size, weight, and the seller’s business model.
The 15% transaction fee has stayed the same for over a decade. It varies by category and can be as low as 8%. Fulfillment by Amazon (FBA) fees have steadily increased. Amazon has raised fulfillment fees every year and introduced increases in storage fees. Selling on Amazon is tied to using FBA, so it’s rare for sellers to be successful without using it.
Amazon is dedicating more space on its site for advertising, which gives it more space to sell but also makes each spot less valuable, said Melissa Burdick, a former Amazon executive who is now president of Pacvue, an online marketing consulting firm. Conversion rates, which measure the number of shoppers who purchase a product after clicking an ad, declined each quarter last year, she said.
“The advertising space on Amazon isn’t as successful as it used to be for sellers,” Burdick said. “A lot of sellers are choosing to offer discounts rather than advertise because shoppers are responding more to discounts.”
“For these small businesses, it’s getting harder and harder to be profitable because they are spending more and more money on Amazon fees,” said Juozas Kaziukenas, Marketplace Pulse’s founder and chief executive officer. “Amazon might be tempted to keep increasing fees because it’s in a tough spot, but you have to reach some kind of equilibrium.”
Michael Kozlowski is the editor-in-chief at Good e-Reader and has written about audiobooks and e-readers for the past fifteen years. Newspapers and websites such as the CBC, CNET, Engadget, Huffington Post and the New York Times have picked up his articles. He Lives in Vancouver, British Columbia, Canada.
