Amazon relies on independent sellers to stock its marketplace and charges them a variety of fees. According to the source, the basic referral fee is 15 % of the sale price in most categories, but additional costs for fulfillment, storage, returns and advertising can push the total cut to close to half of each sale. The source notes that while the referral fee is mandatory, other charges such as fulfillment and advertising are effectively required for sellers to win the Buy Box and gain Prime eligibility, which the FTC describes as a “virtual necessity for doing business on Amazon.”
Because sellers must relinquish roughly half of their revenue to Amazon, they have little room to absorb those costs. The source explains that the remaining half must cover product manufacturing, shipping to Amazon warehouses, staff wages and other expenses, leaving sellers unable to offset the fees without raising prices. Since Amazon’s referral fee is a percentage of the sale price, any price increase also enlarges Amazon’s cut, creating a feedback loop.
Amazon’s Fair Pricing Policy further restricts sellers’ ability to undercut prices elsewhere. The source states that if a seller offers a lower price on another platform or on its own website, Amazon can remove the Buy Box or suspend the seller. Consequently, sellers who raise prices on Amazon to cover fees must raise them uniformly across all channels or risk losing Amazon sales. The source cites examples: in 2024 sellers told CNBC they lost the Buy Box after Target discounted the same item, and California’s attorney general alleges Amazon pressured brands to get Walmart, Target and other retailers to raise their prices. A seller was reportedly suspended by Amazon over a one‑cent price gap with Target reported by More Perfect Union.
The source notes that market competition would normally correct high prices by directing shoppers to cheaper alternatives, but the policy leaves sellers with nowhere to charge less. Amazon’s dominance—accounting for about 40 % of U.S. online retail sales—makes leaving the platform impractical for many vendors.
Regulators have acted on these concerns. The source mentions that in 2023 the FTC and 17 U.S. states sued Amazon, accusing it of illegally maintaining monopoly power by punishing sellers who offer lower prices elsewhere and forcing reliance on its services. Amazon denies wrongdoing and the case is set for trial next year. In Europe, Germany has ordered Amazon to stop controlling sellers’ prices, although the decision is not yet final.
The source concludes that even shoppers who avoid Amazon may still encounter its pricing influence, because the platform’s rules tend to lift prices across the broader internet.
Key facts
- Amazon’s total fees can reach close to 50 % of a seller’s sale price.
- The FTC describes Prime eligibility and advertising as a virtual necessity for sellers on Amazon.
- Amazon’s Fair Pricing Policy can remove the Buy Box or suspend sellers who list lower prices elsewhere.
- The FTC and 17 states sued Amazon in 2023 for allegedly maintaining monopoly power through pricing rules.
- Germany has ordered Amazon to cease controlling sellers’ prices, pending appeal.