Nutrafol pays $1,353,264 in referral fees every month to Amazon for ONE product!

To size that up, Amazon can pay for 130 employees because of Nutrafol's generous contributions. I sure hope seller support pays attention to Nutrafol's support cases.

CONTEXT:

Referral fees are the cost of doing business on Amazon. Every sale from a third party seller (which make up the majority of the sales) Amazon charges a referral fee. Most the time it's 15%.

Nutrafol is a category leader in many respects.

It does an ungodly amount of monthy revenue for a single ASIN. It's over $9m and has held onto this or even higher for months. There's no way to avoid this fee. This is the cost of doing business on Amazon. If you raise your price, this fee scales with you! No way of hiding.

TAKEAWAYS:

Understanding your products profitability is important. I personally have Amazon's fee structures tattooed on my thigh. My wife loves it. You need to price your products to take in all the overhead and variable costs. This is especially important if you sell on multiple channels because as we all know, Amazon likes to be the least expensive!