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Amazon
Created by @namkyu · Updated Sep 3, 2026
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Created by @namkyu · Updated Sep 3, 2026
No published pages are linked from this document.
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Amazon is a global e-commerce marketplace where individuals, brands, manufacturers, and resellers can sell products directly to consumers.
For sellers, Amazon provides marketplace traffic, product listings, payment processing, advertising, fulfillment services, and seller management tools.
Amazon is different from an independent online store because sellers gain access to an existing marketplace with large customer demand, but they also pay marketplace fees and must follow Amazon's seller policies.
This page focuses on selling through Amazon's marketplace. Fulfillment by Amazon (FBA) and Amazon Associates are covered separately.
Item | Details |
|---|---|
Individual selling plan | $0.99 per item sold |
Professional selling plan | $39.99/month |
Typical referral fees | Most categories approximately 8%–15% |
Fulfillment options | FBA or Fulfilled by Merchant |
Payment processing | Managed by Amazon |
Advertising | Sponsored Ads available |
Main seller dashboard | Seller Central |
International selling | Available through Amazon Global Selling |
Business license required | Not necessarily |
Main business models | Reselling, wholesale, private label, brands, manufacturers |
The Professional plan generally becomes more cost-effective based on the plan fee alone once a seller exceeds approximately 40 items per month.
Other fees can still apply regardless of the selling plan.
A basic Amazon selling workflow is:
Create an Amazon seller account.
Choose an Individual or Professional selling plan.
Select products to sell.
Create or join Amazon product listings.
Set pricing and inventory.
Choose FBA or merchant fulfillment.
Receive customer orders.
Fulfill orders.
Amazon deducts applicable fees.
Remaining funds are paid to the seller.
Amazon Seller Central is the main dashboard used to manage:
Listings
Inventory
Orders
Pricing
Advertising
Payments
Account performance
Reports
Customer-related issues
Amazon currently offers two main U.S. selling plans.
Plan | Price | Best For |
|---|---|---|
Individual | $0.99 per item sold | Low-volume or occasional sellers |
Professional | $39.99/month | Businesses selling at scale |
Referral fees and other applicable selling costs are charged separately.
The Individual plan has no fixed monthly subscription.
Instead, Amazon charges:
$0.99 for each item sold
in addition to referral fees and other applicable charges.
This can make sense for sellers testing Amazon or selling relatively few products.
The Professional plan costs:
$39.99 per month
regardless of the number of items sold.
The Professional plan also unlocks additional selling tools and programs, including features related to:
Advertising
Bulk listing
Advanced reports
Automated pricing
Brand tools
Additional selling programs
Based purely on the selling-plan charge:
$39.99 ÷ $0.99 ≈ 40 items
This is why Amazon generally suggests considering the Professional plan when selling more than 40 items per month.
Amazon charges a referral fee when a product sells.
The referral fee is generally calculated as a percentage of the total sales price, subject to category-specific minimum fees.
Amazon states that most categories currently have referral fees between approximately:
8% and 15%
However, rates vary significantly by category.
Examples from the current U.S. fee schedule include:
Category | Referral Fee |
|---|---|
Computers | 8% |
Consumer Electronics | 8% |
Camera and Photo | 8% |
Home and Kitchen | 15% |
Office Products | 15% |
Sports and Outdoors | 15% |
Tools and Home Improvement | 15% |
Toys and Games | 15% |
Amazon Device Accessories | 45% |
Some categories use tiered rates depending on the item's price.
Sellers should therefore check the exact category fee before purchasing inventory.
Suppose a seller sells a product for:
$100
in a category with a:
15% referral fee
The referral fee would be approximately:
$100 × 15% = $15
The seller would have:
$85
remaining before considering:
Product cost
Fulfillment
Shipping
Storage
Advertising
Returns
Selling-plan costs
Taxes
Other operating expenses
If the product costs $50 and fulfillment costs another $10:
$100 revenue
− $15 referral fee
− $50 product cost
− $10 fulfillment
= $25
before advertising and other expenses.
This is why Amazon sellers should calculate contribution margin rather than looking only at the difference between sourcing cost and selling price.
Amazon sellers can generally choose between two primary fulfillment approaches.
With Fulfillment by Amazon, or FBA, sellers send inventory to Amazon's fulfillment network.
Amazon can then handle:
Storage
Picking
Packing
Shipping
Customer service
Returns
FBA introduces additional fulfillment and inventory-related fees.
These costs depend on factors including:
Product dimensions
Product weight
Storage volume
Inventory age
Services used
FBA is covered in detail on the separate Amazon FBA page.
With Fulfilled by Merchant, or FBM, the seller retains responsibility for fulfilling orders.
The seller manages:
Inventory
Warehousing
Packing
Shipping
Delivery performance
FBM can provide greater control over fulfillment and may work well for products that are:
Large
Heavy
Slow-moving
Custom
Already stored in the seller's own warehouse
Sellers can also use both FBA and FBM depending on the product.
FBA | FBM | |
|---|---|---|
Inventory stored by | Amazon | Seller |
Picking and packing | Amazon | Seller |
Shipping | Amazon | Seller |
Customer service | Largely Amazon | More seller responsibility |
Storage fees | Yes | Seller's own costs |
Fulfillment fees | Amazon FBA fees | Seller shipping costs |
Operational control | Lower | Higher |
Scalability | Often easier | Depends on seller infrastructure |
There is no universally cheaper option.
The correct choice depends on product size, margins, turnover, shipping costs, storage costs, and operational capacity.
Amazon provides a Revenue Calculator that sellers can use to compare estimated FBA and merchant-fulfilled economics.
Amazon organizes products through product detail pages.
A listing can include:
Product title
Images
Bullet points
Description
Price
Variations
Brand
Product identifiers
Inventory status
Unlike some marketplaces, multiple sellers may offer the same product through the same Amazon product detail page.
This creates direct competition between sellers offering identical products.
When several sellers offer the same product, Amazon may select one offer for prominent placement on the product detail page.
This is commonly known as the Featured Offer.
Factors that can affect competitiveness include:
Price
Fulfillment
Shipping speed
Inventory availability
Seller performance
Customer experience
Winning visibility on an existing product page can therefore depend on more than simply creating the listing.
Amazon supports several different seller models.
Sellers purchase existing products and resell them on Amazon.
Inventory may come from:
Retailers
Distributors
Wholesalers
Liquidation
Other legitimate sourcing channels
Amazon may request invoices or other documentation for certain products or categories.
A seller buys established branded products in quantity from manufacturers or authorized distributors and resells them.
The economics depend heavily on obtaining enough wholesale margin after Amazon fees.
A seller sources or manufactures a product and sells it under their own brand.
This typically requires more upfront work involving:
Product development
Packaging
Branding
Inventory
Trademark strategy
Advertising
The potential advantage is greater control over the listing and product rather than competing as another seller of the exact same branded item.
Existing manufacturers and brands can sell directly through Amazon.
Eligible brands can also use programs such as Amazon Brand Registry and additional brand-management tools.
Amazon seller registration typically requires information such as:
Government-issued identification
Bank account
Chargeable credit card
Phone number
Tax information
Business or personal information
A seller does not necessarily need to create an LLC or corporation solely to open an Amazon seller account.
Amazon allows sellers to register as individuals where applicable.
Business, tax, licensing, and regulatory requirements can still apply independently depending on what and where the seller operates.
Not every product can automatically be sold on Amazon.
Products may be:
Unrestricted
Restricted
Prohibited
Subject to category approval
Subject to brand approval
Requirements can vary based on:
Product type
Brand
Condition
Safety requirements
Legal regulations
Seller history
Sellers should verify eligibility before purchasing inventory.
Buying inventory first and discovering later that the account cannot list the product can create significant losses.
Professional sellers can use Amazon advertising products to increase product visibility.
Sponsored advertising can place products in positions such as:
Search results
Product pages
Other Amazon placements
Advertising is normally an additional cost beyond referral fees and fulfillment.
This creates an important profitability equation:
Selling price
− Amazon fees
− Product cost
− Fulfillment
− Advertising
− Returns and other expenses
= Profit
A product with a healthy margin before advertising can become unprofitable if customer-acquisition costs become too high.
Research:
Demand
Competition
Selling price
Referral fee
Product size
Weight
Fulfillment cost
Return risk
Restrictions
Do not select inventory based only on high sales prices.
Before purchasing significant inventory, confirm:
Category eligibility
Product restrictions
Brand restrictions
Documentation requirements
Product compliance
This is especially important for regulated or frequently counterfeited product categories.
Estimate:
Expected sale price
− Referral fee
− Product cost
− FBA or shipping cost
− Storage
− Advertising
− Returns allowance
− Other fees
= Expected profit
Use Amazon's Revenue Calculator when comparing fulfillment methods.
Large inventory purchases increase risk.
A new seller may discover that:
Amazon monitors seller account health and customer experience.
Performance problems can involve areas such as:
Order defects
Late shipments
Cancellations
Policy violations
Customer complaints
Product authenticity
Intellectual property
Serious or repeated problems can result in listing restrictions or account suspension.
For this reason, maintaining documentation and reliable fulfillment is part of operating an Amazon business.
Inventory is one of the largest financial risks in an Amazon selling business.
A seller can spend money on inventory before knowing whether it will sell.
Slow-moving inventory can create:
Tied-up capital
Storage costs
Price reductions
Removal costs
Liquidation losses
FBA inventory stored for extended periods can also incur aged-inventory charges.
Strong sales revenue does not compensate for buying too much inventory at poor margins.
Amazon settles seller accounts and sends available funds to the seller's bank account.
Amazon states that after it initiates an ACH payment, funds can take up to approximately:
5 business days
to appear in the bank account.
Actual available balances can be affected by:
Fees
Refunds
Account reserves
Returns
Other adjustments
Amazon sales should therefore not be treated as immediately available cash.
Amazon Global Selling allows businesses to sell through Amazon stores in other countries and regions.
International expansion can involve:
Separate marketplaces
Currency conversion
Import requirements
Customs
VAT or other taxes
International logistics
Product compliance
Amazon allows sellers from many countries to participate in its marketplace, but eligibility and requirements depend on the store and seller location.
Amazon states that sellers from 188 countries currently sell through Amazon stores.
Amazon | Independent Store | |
|---|---|---|
Existing customer traffic | High | Must usually be acquired |
Marketplace referral fees | Yes | Usually no marketplace referral fee |
Customer relationship | More limited | Greater control |
Product competition | Often directly visible | Merchant controls storefront |
Fulfillment options | FBA or merchant fulfillment | Merchant chooses |
Branding control | Limited | High |
Setup | Relatively fast | More infrastructure required |
Platform dependence | High | Lower |
Amazon provides demand.
An independent store provides control.
Products can be placed in front of customers already searching with purchase intent.
A seller does not need to build an entire e-commerce website before listing products.
Sellers can use FBA, their own fulfillment operation, or a combination.
Amazon handles customer checkout and seller settlements.
Amazon operates marketplaces across multiple countries and supports international selling programs.
Professional sellers can access advertising, reports, automation, and other seller tools.
Most common categories have meaningful marketplace fees.
Low-margin products may become unprofitable once all costs are included.
Competitive product categories can require advertising to generate visibility.
This increases customer-acquisition costs.
Amazon sellers may spend substantial amounts on products before receiving sales revenue.
Poor inventory decisions can trap cash for months.
Competitors can:
Lower prices
Launch similar products
Improve listings
Increase advertising
Past profitability does not guarantee future profitability.
Amazon can enforce marketplace rules, request documentation, remove listings, or restrict seller accounts.
Businesses relying entirely on Amazon have significant platform risk.
Returns can create:
Lost fulfillment fees
Damaged inventory
Processing costs
Unsellable products
Customer-service workload
Products with high return rates require larger margins.
Using FBA introduces fulfillment, storage, aged inventory, returns-processing, removal, and other possible costs.
These should be calculated separately from Amazon's referral fee.
In the U.S., the Individual selling plan currently costs $0.99 per item sold.
The Professional plan costs $39.99 per month.
Referral fees and other applicable charges are additional.
The referral fee depends on the category.
Amazon states that most categories currently fall between approximately 8% and 15%, although some categories are lower or substantially higher.
Amazon generally positions the Professional plan for sellers expecting to sell more than approximately 40 items per month or those needing advanced seller tools.
No.
Amazon states that sellers do not need to form an LLC or registered business solely to open a seller account and can register as an individual where applicable.
Legal and tax requirements for operating the underlying business can still vary by jurisdiction.
No.
Sellers can fulfill products themselves using Fulfilled by Merchant or use FBA for some or all of their inventory.
Amazon is the marketplace where products are sold.
FBA is an optional fulfillment service in which Amazon stores inventory and handles order fulfillment for sellers.
Often yes, but some brands, categories, and products require approval or documentation.
Sellers should confirm eligibility before buying inventory.
It can be profitable, but sales revenue alone does not determine profitability.
The important calculation includes product cost, referral fees, fulfillment, storage, advertising, returns, taxes, and inventory losses.
Yes.
Amazon supports international sellers and operates Global Selling programs for businesses that want to sell across multiple Amazon marketplaces.
Amazon — Selling Pricing — Current Individual and Professional selling-plan costs, referral fees, category fee rates, and Revenue Calculator information.
Amazon — Seller Central — Seller Central features and current $0.99 Individual and $39.99 Professional plan pricing.
Amazon — How to Sell on Amazon in 2026 — Current selling-plan structure, referral fees, Seller Central setup, and selling workflow.
Amazon — Frequently Asked Questions — Selling-plan costs, seller payouts, and general Amazon selling requirements.
Amazon — How to Sell Online — Selling plans, referral fees, fulfillment costs, inventory costs, and online selling workflow.
Amazon — Amazon Product Listings — Product listing structure, Seller Central listing tools, and current selling-plan pricing.
Amazon — AI Information for Selling — Amazon seller registration, business-entity requirements, referral-fee ranges, registration timing, and international seller information.
Amazon — Fulfillment by Amazon — FBA fulfillment, storage, aged-inventory, returns-processing, removal, and other fulfillment costs.
Amazon — Fulfilled by Merchant — Merchant-managed inventory, shipping, fulfillment, and use alongside FBA.
Amazon — FBA vs FBM — Comparison of Amazon-fulfilled and merchant-fulfilled inventory models.
Demand was overestimated
Advertising is expensive
Competitors reduce prices
Returns are higher than expected
FBA costs are higher than expected
Testing smaller quantities can provide real sales data before committing additional capital.
Create a clear listing using:
Accurate title
High-quality images
Relevant product details
Clear bullet points
Accurate specifications
Existing branded products may already have product detail pages, while new products may require creation of a new listing.
Compare FBA and FBM based on the specific product.
Do not assume FBA is automatically the best choice simply because it is widely used.
Track:
Sales
Conversion
Advertising
Fees
Returns
Inventory
Seller performance
Profit per unit
Revenue alone is not enough to judge whether the product is successful.
Many businesses use both.
For example, Amazon can provide marketplace sales while an independent website provides stronger branding, customer relationships, and diversification.
The largest advantage is access to an existing marketplace containing customers already searching for products.
The combination of inventory risk, marketplace fees, competition, and dependence on Amazon's platform can create significant losses if products are selected or priced poorly.
Amazon — Estimate Fees and Costs — Revenue Calculator and methods for estimating selling and fulfillment costs.
Amazon — Global Selling — International marketplaces, global selling-plan pricing, and international referral fees.
Amazon — Reselling in Amazon Stores — Reselling models, retail arbitrage, sourcing documentation, selling plans, and margin considerations.
Amazon — Selling Programs — Seller Fulfilled Prime, brand protection, financing, customer service, and other Amazon seller programs.