Amazon Fees in Singapore: What Every Seller Should Know

For small business owners in Singapore, selling on Amazon is an excellent way to reach a global audience and expand your online presence. However, before you get started, it’s essential to understand the various Amazon seller fees. These fees can significantly impact your profits, but incorporating them into your accounting services can help you manage costs more effectively and set competitive prices for your products.

1. Referral Fees: The Percentage That Makes a Difference

The most significant fee you’ll encounter as an Amazon seller is the referral fee. This fee is charged as a percentage of each sale you make on Amazon, and it varies depending on your product category. Typically, Amazon’s referral fees range from 6% to 45%, but most categories fall between 8% and 15%.

• Tip: Be sure to check the referral fee for your specific product category. Knowing this will help you set your prices correctly and ensure you’re covering this cost while staying competitive.

2. Fulfilment Fees (FBA Fees): The Cost of Convenience

If you decide to use Fulfilment by Amazon (FBA), Amazon charges a fulfilment fee. This fee covers the cost of storing, packing, and shipping your products from Amazon’s warehouses. The fulfilment fee depends on the size and weight of your products, so understanding these details is key to determining whether FBA is the best option for your business.

• Tip: If you’re using FBA, monitor the fulfilment fees regularly. For small or lightweight products, FBA can be a cost-effective solution, but for larger items, you might find the fees add up quickly. Compare the costs of FBA with Fulfilment by Merchant (FBM) to see which option offers the best value.

3. Subscription Fees for Professional Sellers

Amazon offers two types of seller accounts: Individual and Professional. The Professional seller account requires a monthly subscription fee of SGD 39.99 (or the equivalent in other currencies). This fee applies regardless of how many items you sell.

• What Sellers Need to Know: If you plan to sell more than 40 items per month, a Professional seller account is the way to go. However, if you’re just starting out or selling less frequently, you might consider the Individual seller account, which has no monthly fee but charges a small per-item fee.

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4. Storage Fees: The Cost of Keeping Your Products Safe

If you’re using Amazon’s Fulfilment by Amazon (FBA), you’ll also incur storage fees. These fees are based on the volume of your inventory stored in Amazon’s warehouses. Amazon has both monthly storage fees and long-term storage fees for products that remain unsold for six months or more.

• Tip: To avoid long-term storage fees, monitor your stock levels and remove slow-moving inventory. Efficient inventory management is critical to keeping your costs down and maintaining profitability.

5. Advertising Fees: Boosting Your Visibility

To drive more traffic to your store and increase sales, many Amazon sellers use Amazon Advertising. Amazon offers several advertising options, including Sponsored Products, Sponsored Brands, and Sponsored Display. These ads are based on a cost-per-click (CPC) model, so you only pay when someone clicks on your ad.

• What Sellers Should Consider: While Amazon ads can significantly increase your visibility, they come with additional costs. Make sure to monitor your ad performance and adjust your campaigns based on the return on investment (ROI). Avoid overspending on ads that aren’t delivering results.

6. Refund Administration Fees: Managing Returns

Returns are an inevitable part of online selling, and Amazon charges a refund administration fee when a customer returns an item. This fee is typically 20% of the referral fee for the product being returned. While this fee is relatively small, if your store experiences a high number of returns, these charges can accumulate over time.

• What Sellers Should Know: Keep track of your refund fees and try to minimise returns by ensuring your product descriptions are accurate and your customers are happy with their purchases. A clear return policy and effective customer service can also help reduce the number of returns.

7. Maximising Profitability Despite the Fees

To stay profitable on Amazon, it’s essential to manage all of these fees effectively. Here are some practical tips for Amazon sellers:

• Account for All Fees: Always factor in all fees—referral fees, fulfilment fees, storage fees, advertising costs, and refund fees—when setting your prices. This will ensure you’re covering your costs and maintaining your profit margins.
• Evaluate Fulfilment Options: Regularly assess whether Fulfilment by Amazon (FBA) or Fulfilment by Merchant (FBM) is the most cost-effective option for your business.
• Monitor Your Advertising Spend: Amazon’s advertising tools can be powerful, but make sure you’re getting value from them. Track the performance of your ads and adjust your budget or strategies based on results.

Summary

Selling on Amazon can be a lucrative business opportunity for small business owners in Singapore, but understanding Amazon seller fees is crucial for success. By being aware of the various fees involved and effectively managing them, you can ensure your business remains profitable.

Make sure to factor in all fees when pricing your products, use Amazon’s tools strategically, and monitor your advertising spend. With the right approach, you can grow your business on Amazon and maximise your profits.

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