Overview

Amazon has lowered the referral fee for clothing items priced under $15 from 17 % to 5 %, a change announced in early 2024. The adjustment targets budget‑friendly apparel and is intended to keep price‑sensitive shoppers on the platform. Sellers who list low‑cost garments can now retain a larger share of each sale, improving the economics of the ultra‑discount segment.

Key Points

• Referral fee cut — Items under $15 in the apparel category now incur a 5 % fee, down from the previous 17 % rate.
• Category‑only change – The reduction applies solely to clothing; other product groups keep their existing fee structures.
• Discount storefront — Amazon is preparing a dedicated “bargain” storefront that will showcase low‑price items with the new fee schedule.
• Seller incentive — The move is designed to attract more third‑party sellers to list competitively priced apparel and increase overall volume in the budget segment.
• Margin impact — A $10 shirt that previously cost $1.70 in referral fees now costs $0.50, freeing $1.20 per unit for price cuts or profit.

How the Referral Fee Reduction Works

1. Identify qualifying products — Sellers list clothing with a sale price of $14.99 or less. For example, a summer tee priced at $12 qualifies, while a $16 polo does not.
2. Apply the 5 % fee — Amazon calculates the referral charge at 5 % of the final sale price. In the $12 tee example, the fee equals $0.60 instead of $2.04 under the old 17 % rate.
3. Combine with existing fees — All other fees (FBA fulfillment, storage, shipping) remain unchanged. A seller using FBA might still pay a $2.50 fulfillment fee for the same tee, so the total cost becomes $3.10 versus $4.54 before the reduction.
4. Reflect on pricing strategy — With the lower referral cost, sellers can either lower the list price to stay competitive (e.g., dropping the tee to $10) or keep the price and enjoy a higher margin.
5. Monitor fee updates — Amazon may adjust the fee schedule in response to market shifts, so sellers should regularly review their account notifications for any changes.