Part 7/13:
Most smaller brands and third-party sellers rely on a pay-to-sell model, paying fees ranging generally from 5% to over 17% of their sales. Yet, a 2023 FTC lawsuit alleges that some sellers pay up to 50% of their revenues to Amazon after accounting for fees, prompting scrutiny over the fairness of Amazon’s platform practices.
Amazon’s expansive toolset includes Fulfillment by Amazon (FBA), which handles storage, shipping, and returns for sellers—an invaluable resource for small businesses. Despite this, the costs associated with FBA—such as storage fees, removal fees, and high return logistics costs—can significantly impact profit margins.