ShippingCowAmazon vs. your own store: fees, margins and who owns the customer
Per order, your own store usually costs less in fees: no referral fee, just card processing and your platform. Amazon brings the buyer to you, and on your own store you have to bring them yourself. Your own store wins once a customer buys from you a second time, because you have their email and Amazon doesn't share it.
The fees on each side
| Cost | Amazon | Your own store |
|---|---|---|
| Monthly plan | $39.99 Professional selling plan | Platform fee, e.g. Shopify from $39 a month on monthly billing |
| Commission | Referral fee, 15% in many categories, $0.30 minimum | None |
| Card processing | No separate charge to the seller | Stripe: 2.9% + 30 cents per domestic card payment |
| Fulfillment | FBA fee per unit, by size and weight | Your warehouse, a 3PL, or Amazon Multi-Channel Fulfillment |
| Getting the buyer | Amazon search, plus ads if you choose | Your job: email, search, social, ads, partners |
Sources: Amazon pricing, Stripe pricing, Shopify pricing. Referral rates vary by category, so check yours on Amazon's pricing page.
A worked example: a $60 product
Take one $60 order and look only at the commission and payment fees, since fulfillment depends on your product.
On Amazon, a 15% referral fee is $9.00. On your own store with Stripe, 2.9% of $60 is $1.74, plus 30 cents, so $2.04. The difference is $6.96 per order.
That $6.96 is your budget to win the order yourself. If you spend more than that on ads to get one first order, the first sale on your own store earns less than the same sale on Amazon. The second order from the same customer is different: you already have their email, so getting it costs far less.
Some categories use different rates. Furniture, for example, is 15% on the first $200 of the price and 10% above that (Amazon pricing). Run the math with your own category and price.
Buy with Prime: Amazon checkout on your own site
Amazon's Buy with Prime program lets Prime members check out on your own website with their Amazon account. Amazon lists three fees: a Prime service fee of 3% of order value ($0.30 minimum), fulfillment starting at $5.60 per unit plus $0.78 per cubic foot per month of storage, and payment processing of 2.4% plus $0.30 with Amazon Pay (Buy with Prime pricing).
You need a US business, a Professional Seller Central account and Amazon Pay to set it up (Buy with Prime requirements). On Shopify it runs through Amazon's MCF and Buy with Prime app (Shopify Help Center). It can make a new store feel familiar to Prime shoppers. It also adds fees, so test it on a few products before turning it on everywhere.
Who owns the customer
On Amazon, you see what you need to ship an order and aggregate reports about your brand. Amazon's rules stop you from using Amazon messages for marketing (Communication Guidelines).
On your own store, the order record is yours: name, email, address, what they bought and when. With consent you can email them, and the FTC's CAN-SPAM guide sets the basic rules, including a working unsubscribe and your physical address in every message (FTC CAN-SPAM guide).
We wrote a separate post on exactly what customer data Amazon lets you keep.
Where Amazon still wins
A brand-new product with no reviews and no audience will usually find its first buyers faster on Amazon, because the shoppers are already there. That's why we suggest running both: Amazon for discovery, your own store for the customers who come back.
Sources
- Amazon, How much does it cost to sell on Amazon? (sell.amazon.com/pricing)
- Stripe, pricing and fees
- Shopify, pricing
- Amazon Buy with Prime, pricing
- Amazon Buy with Prime, requirements to set up checkout
- Shopify Help Center, activating Buy with Prime on Shopify
- Amazon Seller Central, Communication Guidelines (PDF)
- FTC, CAN-SPAM Act: a compliance guide for business
Questions
Is it cheaper to sell on my own website than on Amazon? +
Per order, the fees are usually lower on your own site because there is no referral fee. The cost of getting each buyer to the site decides whether the whole sale is cheaper.
Do I pay Amazon fees on sales from my own store? +
Only if you use Amazon services there, such as Buy with Prime or Multi-Channel Fulfillment, which have their own fees.
Send your Amazon link
Paste an Amazon product or store link. A person reads it and replies about a store.
$500 a month. The first 3 months are $1,500, paid upfront. There is no setup fee and no fee on your store sales.