Amazon Seller Policies and Fees to Guide New Sellers
Are you probably thinking of having your own business with Amazon? It is said to be one of the most powerful platforms for entrepreneurs to launch and sustain online stores. With millions of active buyers and the ability to enter the market globally.
However, before taking that major step, you need to understand what the Amazon seller policies are and learn some additional things related to Amazon seller fees.
Ecom Expert works as a business partner to the new sellers to help them through the depths of policy and fees concerning what Amazon charges for Amazon Seller policies and fees.
Why Understanding Amazon Seller Policies and Fees Matters
Indeed, Amazon is a customer-first market. In fact, it has created very strict measures concerning selling on the platform. Knowing these rules around the costs will safeguard your business’s profitability in several aspects:
- Account Health: Amazon’s rules may issue warnings, suspend your account, and even permanently ban you from being a seller on Amazon. Compliance matters so much.
- Profitability: Most importantly, knowing all the Amazon fees and how they accumulate enables the proper pricing of a product with the forebearance of unwelcome surprises eating into your margins.
- Customer Trust: Mechanisms established to ensure customer adherence to Amazon policies would guarantee a shopping experience that is good enough that they will always return and give good reviews.
Key Amazon Seller Policies Every Beginner Must Know
Greater Amazon Seller Account Healthy Maintenance: Amazon policies. Some of the most prominent policy areas every new seller should know about:
1. Amazon Product Listing Requirements & Guidelines
Amazon is like every other marketplace, requires that its products be listed appropriately and accurately. It simply means that there are a thousand-and-one moods in which details such as the following need to be captured:
- Accurate Descriptions: Titles, bullet points, and descriptions should be checked to ensure they remain true to fact and in perfect accordance with the product.
- High-Quality Images: Use clear, professional photos that meet Amazon’s image guidelines (appropriate size, plain white background, etc.)
- Prohibited Items: Do not list an item that is restricted or requires approval to sell (find out if an item falls under such restrictions before you list it with Amazon).
- Category-Specific Rules: Certain categories, such as health, beauty, or electronics, have special compliance requirements and documentation.
Pro Tip: Get professional, high-quality product photography at Ecom Expert so that your listings are compliant with Amazon’s criteria and attract the most buyers.
2. Amazon Customer Service Standards for Sellers
Third-party sellers are required to take to the customer service requirements and, therefore, uphold the reputation of Amazon, which is founded on good customer service. Accordingly, as a seller, you should:
- Respond to customer queries within 24 hours (including weekends).
- Resolve customer issues quickly and professionally, aiming for complete satisfaction.
- Maintain strong performance metrics, such as a low order defect rate, a low late shipment rate, and a low cancellation rate.
Poor customer service can hurt your seller performance metrics and search visibility.
3. Amazon Shipping and Fulfillment Options (FBA vs. FBM)
When it comes to fulfilling orders, sellers have two main options on Amazon:
Fulfillment by Amazon (FBA) or Fulfillment by Merchant (FBM). Each has its pros and cons:
| Feature | FBA (Fulfillment by Amazon) | FBM (Fulfillment by Merchant) |
| Storage & Shipping | Amazon handles storage, packing, and shipping. | Seller handles all storage, packing, and shipping. |
| Prime Eligibility | Yes, Items are Prime eligible by default. | No, unless you enroll in Seller-Fulfilled Prime. |
| Customer Service | Amazon manages customer service and returns for these orders. | Amazon manages customer service and returns for these orders. |
| Returns | Amazon processes returns on your behalf. | Seller must handle returns and refunds independently. |
FBA helps new sellers qualify for Prime two-day shipping and win the Buy Box more easily. But it comes with fees and storage costs. FBM saves those fees and gives you more control, but you’ll need to handle fast shipping and customer service yourself.
4. Amazon Returns and Refunds Policies for Sellers
Amazon’s return policy is very generous to customers, and all sellers must abide by it. Some key points to consider:
- 30-Day Return Window: In most categories, you must accept returns at least, within 30 days of delivery of the product requested by the customer.
- Prompt Refunds: As soon as you have the product returned (or proof of return is received), process the refund quickly to keep the customer satisfied.
- Fulfillment Method Rules: If you are an FBA seller, returns and refunds will be handled automatically by Amazon.
If you are an FBM seller, you will have to handle the returns process yourself as per Amazon’s guidelines.
Stay up to date on Amazon’s return policy for your category and handle returns smoothly, even if it’s just you. Quick, easy returns keep customers happy and improve feedback.
5. Prohibited Seller Activities on Amazon
Amazon strictly bans certain activities to keep its marketplace safe. As a seller, avoid:
- Review Manipulation: Don’t buy or fake reviews, or offer incentives for positive ones.
- Multiple Accounts: Running more than one seller account without Amazon’s approval isn’t allowed.
- Counterfeits/Infringements: Only sell authentic products you’re authorized to sell counterfeits or trademark violations can lead to bans or lawsuits.
- Price Gouging/Deceptive Pricing: Stick to Amazon’s fair pricing rules; unfair hikes or misleading prices can get you suspended.
Breaking these rules can cost you your account or even get you permanently banned.
Breaking Down Amazon Seller Fees
There are some fees that some will let you remain profitable on top of the myriad of costs associated with selling on Amazon others will totally consume your profits. Here are the primary Amazon business fees you can expect to come across:
Amazon Seller Account Subscription Fees
You can choose between two plans. The Individual plan has no monthly fee but charges $0.99 per item sold which is best for under 40 sales a month or testing the waters.
The Professional plan costs $39.99 per month with no per-item fee, making it the better choice once you pass 40 sales or need advanced features like ads and Buy Box eligibility.
Amazon Referral Fees
Amazon takes a percentage of every sale as commission for connecting you with customers. These fees vary by category, which is usually between 6% and 20%. Most hover around 15%. \
For example, if you sell a $20 item, Amazon might take $3.
Fulfillment Fees (FBA vs. FBM)
With FBA, Amazon charges fulfillment and storage fees for picking, packing, shipping, and customer service. Rates depend on size, weight, and season.
FBM avoids these fees since you handle shipping yourself, but you’ll have your own postage and packaging costs to cover.
Other Amazon Seller Fees
Depending on what you sell and how you run your business, you may also face:
- Closing fees on media items like books or DVDs.
- High-volume Amazon listing fees if you have over 100,000 active listings.
- Amazon refunds administration fees, where Amazon keeps part of the referral fee.
- Amazon coupon redemption fees when buyers use your promotions.
Other Costs to Factor In
Amazon ads are often necessary to get noticed, so set aside a budget for PPC campaigns. Don’t forget upfront inventory costs, supplier charges, and shipping expenses. You may also want to invest in Amazon Premium or third-party tools for analytics, keyword research, or repricing.
By planning for these costs in advance, you’ll be able to price your products in a way that protects your profit margins. Tools like Amazon’s FBA Revenue Calculator can help you see exactly what you’ll take home after fees.
Tips for New Amazon Sellers
Launching a store on Amazon is an exciting venture. Here are some essential tips to help new sellers start strong:
- Read Seller Central Resources: Amazon’s Seller Central has a wealth of guides and news. Stay updated with official policy changes and announcements straight from Amazon.
- Use the Amazon FBA Calculator: Before listing a product, use Amazon’s online FBA fee calculator to estimate all costs (referral fee, FBA fees, etc.) and your potential profit. This helps you price your product appropriately.
- Stay Compliant: Make it a habit to regularly review Amazon’s product compliance requirements (especially if you add new products) and keep an eye on your Account Health dashboard for any policy violations or performance warnings.
- Monitor Key Metrics: Watch your Order Defect Rate, Late Shipment Rate, Cancellation Rate, and other performance metrics in Amazon Seller Central. Keeping these low is crucial for maintaining good standing and winning the Buy Box.
- Price Strategically: Always factor in Amazon’s fees when setting your prices. Consider your competitor’s pricing too, but don’t forget your own costs. A common mistake for new sellers is underpricing and then losing money after fees.
- Focus on Customer Experience: Fast shipping, accurate listings, good packaging, and prompt communication lead to happy customers. Positive reviews and high seller ratings will help your Amazon products rank higher and sell better on Amazon.
Frequently Asked Questions
Q: How much does it cost to start selling on Amazon?
A: With the Individual plan, you pay $0.99 per item and no monthly fee. The Professional plan costs $39.99 monthly with no per-item fee. Both also include referral fees and FBA costs if used.
Q: What are Amazon referral fees?
A: They’re Amazon’s commission on each sale, usually 6%–20% depending on category, with most around 15%.
Q: What is Amazon FBA?
A: Fulfillment by Amazon, where Amazon stores, packs, ships your products, and handles returns. It makes items Prime-eligible but comes with storage and fulfillment fees.
Q: Can I sell on Amazon without using FBA?
A: Yes, through FBM (Fulfilled by Merchant). You handle storage, shipping, and customer service. Prime eligibility is harder to achieve, but costs may be lower.
Q: How do I avoid an Amazon account suspension?
A: Sell authentic products on Amazon, ship on time, keep descriptions accurate, maintain good metrics, and avoid black-hat tactics like fake reviews.
Q: What is the Amazon restricted products list?
A: It’s Amazon’s list of prohibited or gated items, like dangerous goods or certain brands. Some categories require approval before selling.
Q: How do returns work for Amazon sellers?
A: With FBA, Amazon handles returns for you. With FBM, you must accept and process returns according to Amazon’s policy, usually within 30 days.
Q: What is the Amazon Buy Box?
A: It’s the main “Add to Cart” spot on product pages. Winning it depends on price, Prime eligibility, performance, and inventory.
Final Thoughts
Selling on Amazon is a great opportunity for entrepreneurs, but it has some learning curves. Understanding Amazon seller policies and fees will offer a strong foundation for long-term success. It’s not only about selecting the right product; it is about compliance, trust, and learning continuously.
Be updated with Amazon happenings and use Amazon resources, and focus on truly creating value for your customers. This is how you protect your account and keep growing an Amazon business.
At Ecom Expert, we provide help to new sellers so they can save themselves from costly mistakes and start strong. With the right support, one can remain compliant while scaling with assurance. Here is to your Amazon success!
