How Much Does It Cost to Sell on Amazon?

Introduction

Selling on Amazon is one of the fastest ways to reach millions of customers — but it’s not free.

Whether you’re a brand new seller or a growing business expanding to Amazon, understanding your true costs is the difference between scaling profitably and watching your margins disappear.

In this guide, we’ll break down:

• The fees you’ll pay to sell on Amazon

• Whether you’re required to pay for advertising

• What Amazon ads really cost

• How to budget smartly so your profits stay healthy

By the end, you’ll have a clear picture of what it really takes to sell (and succeed) on Amazon in 2025.

1. Do You Have to Pay to Advertise on Amazon?

The short answer: No — but you’ll probably want to.

You don’t have to run ads to list products on Amazon, but it’s nearly impossible to gain meaningful visibility without them. Amazon’s marketplace is competitive — and advertising gives your product the momentum it needs to rank organically.

How Amazon Advertising Works

Amazon uses a pay-per-click (PPC) model. That means:

• You only pay when someone clicks your ad.

• You can set daily budgets and maximum bids.

• You can pause or adjust campaigns at any time.

This flexibility makes it easy to start small. Some sellers begin with just $10–$20 per day per product to test which keywords convert best.

Do You Need to Advertise?

If you’re launching a new product or brand, yes — paid ads help you:

• Appear in top search results faster

• Compete against established brands

• Collect data on what keywords drive sales

Once your organic ranking improves, you can scale back ad spend — that’s when your TACoS (Total Advertising Cost of Sales) starts dropping, a signal that your ads are driving long-term growth.

2. Understanding Amazon Selling Fees

Before you think about advertising, it’s important to understand the baseline cost of selling on Amazon. Every seller pays a mix of account, referral, and fulfillment fees.

Example:
If you sell a $25 product and Amazon charges a 15% referral fee, you’ll pay $3.75 per sale just for platform access — before fulfillment or ads.

3. How Much Does It Cost to Advertise a Product on Amazon?

Advertising costs vary based on your category and competition, but most sellers fall within these ranges:

Let’s say you’re spending $25/day on ads with an average CPC of $0.75. That’s roughly 33 clicks per day, or about 1,000 clicks per month. If your conversion rate is 10%, you’ll make around 100 sales — a great return if you’ve optimized your listings and pricing.

Pro Tip: Always calculate both ROAS (Return on Ad Spend) and TACoS (Total Advertising Cost of Sales) to get the full picture of ad profitability. ROAS shows ad efficiency, while TACoS shows overall business growth.

4. Realistic Example: Monthly Amazon Costs

Let’s break down what your monthly expenses might look like for a $25 product that sells 100 units per month.

Gross Revenue: $2,500
Net After Costs: $1,435 (≈ 57% margin before taxes and overhead)

This is a simplified example — actual margins depend on product weight, category, ad efficiency, and pricing — but it gives a realistic sense of what sellers can expect.

5. Budgeting for Amazon Success

To stay profitable, your pricing and budget should account for all variable costs:

1. Estimate your TACoS early. New sellers typically start at 15–20% TACoS and work toward 8–12% over time.

2. Build ad testing into your launch plan. Don’t expect profitability in the first week — you’re buying data.

3. Monitor your fees monthly. Amazon adjusts FBA and storage fees seasonally.

4. Keep your return rate low. High returns erode your margins fast.

5. Reinvest profits into optimization. Use your data to refine listings, improve creatives, and test new ad types.

At Brand GrowthIQ, we often tell clients: Profit isn’t about spending less — it’s about spending smarter.

6. How to Lower Amazon Advertising Costs

If your ads are eating into your profit, try these strategies:

• Optimize your listings first. Ads convert better when your copy, titles, and images are strong.

• Use negative keywords. This prevents wasted spend on irrelevant searches.

• Split test campaigns. Run variations to identify which ad types deliver the best ROAS.

• Leverage auto campaigns for discovery. Then move top-performing keywords into manual campaigns.

• Track TACoS trends over time. If your TACoS is dropping while sales rise, you’re scaling profitably.

7. The True Cost of Selling on Amazon

When you factor in fees, fulfillment, and advertising, most sellers should expect to invest 25–40% of revenue back into Amazon-related costs.

The good news? With proper optimization and strategy, those costs generate momentum — helping your brand rank organically, capture repeat customers, and grow total revenue sustainably.

8. Key Takeaways

Final Thoughts

Selling on Amazon isn’t just about listing a product — it’s about managing your cost structure strategically.

By understanding how fees, fulfillment, and ads work together, you can plan for profitability instead of guessing.

At Brand GrowthIQ, we help sellers:

• Reduce TACoS through smarter ad targeting

• Improve ROAS with better campaign structure

• Build scalable, data-driven growth strategies

👉 Book a free strategy call to see how we can help you grow profitably on Amazon.