Overview

Amazon charges a referral fee on every item sold through its marketplace, and understanding these fees is essential for accurate profit calculations. The referral fee is a percentage-based commission that varies by product category and is deducted from the total sales price — including the item price, shipping charges, and gift wrapping fees. Sellers who fail to account for referral fees properly risk mispricing their products and eroding their margins.

Key Points / What Sellers Need to Know

• Percentage-based fee — Amazon calculates the referral fee as a percentage of the total sales price, which includes the item price plus any delivery or gift wrapping charges paid by the buyer.
• Tax exclusion — Taxes calculated through Amazon's tax calculation services are excluded from the total sales price before the referral fee is applied.
• Category-dependent rates — Referral fee percentages differ significantly across product categories, typically ranging from 6% to 45% depending on what you sell.
• Minimum per-item fee — Most categories carry a minimum referral fee (commonly $0.30) that applies when the percentage-based fee would be lower than the minimum threshold.
• Automatic deduction — Amazon deducts referral fees automatically from your disbursements; there is no separate invoice or manual payment required.

How Referral Fees Are Calculated

The referral fee calculation is straightforward but often misunderstood. Amazon takes the total sales price — defined as the full amount the buyer pays, including the item price, shipping, and gift wrap — and multiplies it by the applicable category percentage. Critically, this means that if you charge for shipping, the referral fee applies to that shipping amount as well, not just the product price. For example, if a product sells for $20 with $5 shipping in a category with a 15% referral fee, the fee is calculated on the full $25, resulting in a $3.75 referral fee rather than $3.00. Sellers should factor this into their pricing strategy, particularly for heavy or oversized items where shipping charges are significant.

Common Category Fee Ranges