Feeling like Amazon is taking a bigger bite out of your profits than ever before? Amazon seller fee hikes, storage penalties, and hidden costs are stacking up, and for a lot of sellers, the numbers just aren’t adding up anymore.
Amazon’s fee structure isn’t just expensive, it’s punishing. If you’re not careful, your margins will bleed out faster than your sales rank drops after a stockout.
So what’s the solution? Sellers who are tired of the grind are starting to build their own DTC (direct-to-consumer) brands, and for good reason. More control. Better margins. Real customer relationships.
In this blog, our Amazon agency will discuss how Amazon’s rising fees in 2025 are killing seller margins, making it harder to stay profitable even with strong sales. Building a direct-to-consumer channel gives you control over pricing, customer data, and fulfillment, helping you keep more of your revenue and reduce your dependency on Amazon.
Table of Contents
The Real Cost of Selling on Amazon in 2025
When business owners start out on Amazon, they often think all they need to pay for are the products, and then the profits will start rolling in. But as they gain more experience, they quickly realize Amazon is packed with constantly rising fees, especially for FBA, which can eat up margins fast.
Amazon Fees That Are Eating Into Your Profits
There are several Amazon seller fees you’ll have to deal with, and once they start stacking up, you might not even notice how much profit is slipping away. Below are the key fees every seller should know so you can keep better track of where your money’s going.
| Fee Description | Price Range | |
|---|---|---|
|
Referral Fee |
A percentage cut Amazon takes from every sale. The rate depends on your product category. |
8% to 15% of the total sales price |
|
Professional Plan Fee |
A flat monthly fee for access to bulk listing, ad tools, and more. |
$39.99/month |
|
Individual Per-Item Fee |
A fixed fee is charged per item sold if you’re on the Individual plan. |
$0.99 per item |
|
Closing Fee |
An extra charge on media items like books, DVDs, and video games. |
$1.80 per unit |
|
FBA Fulfillment Fee |
The fee Amazon charges to pick, pack, and ship each FBA item. |
$3.22 to $7.17+, depending on size/weight |
|
Monthly Storage Fee |
Charged for the space your inventory takes up in Amazon’s warehouse. |
$0.87 to $3.63 per cubic foot |
|
Aged Inventory Surcharge |
Extra fee for inventory that sits unsold in FBA for 181+ days. |
$0.50 to $6.90+ per unit, depending on age |
|
Disposal/Removal Fees |
Cost to remove or destroy unsold inventory stored in FBA. |
$0.97 to $2.83+ per unit |
How Small Amazon Seller Fees Become Big Problems
At first glance, Amazon’s fees might look small, just a few cents here, a couple of dollars there. But once they start stacking up across hundreds or thousands of units, you’ll feel how fast they can eat into your margins.
- Fulfillment and low inventory fees add up fast. You’ll pay more if your inventory drops below Amazon’s 28-day threshold or if you have oversized items with high handling costs.
- Storage fees punish both overstocking and understocking. Too much inventory means high monthly fees, while too little can trigger low-inventory surcharges.
- Unexpected fees can catch you off guard. Charges for things like labeling, prep services, or warehouse transfers show up when you least expect them.
- Returns eat into your bottom line. You not only lose the sale but also pay return processing fees, and sometimes you can’t even resell the returned item.
- Fee increases are constant. Amazon tweaks its fee structure often, making it hard to build reliable profit projections.
- Managing fees becomes a full-time job. Trying to stay ahead of seasonal trends, demand shifts, and penalty fees can distract from actually growing your business.
- Price competition makes things worse. In a saturated marketplace, dropping your prices to stay competitive while juggling high fees can make profitability nearly impossible.
- Shipping costs can’t always be passed on. If you sell bulky or heavy items, shipping alone can wipe out your margin, and Amazon’s fee doesn’t cover all of it.
Direct-to-Consumer: The Smart Way to Escape Amazon Seller Fees
In the search for ways to reduce, or even avoid, Amazon’s growing list of seller fees, many brand owners are building direct-to-consumer channels. This is because DTC gives you full control over pricing, customer relationships, and profit margins without Amazon’s increasing fees.
Amazon vs DTC Fees: Which One’s Eating Your Margins?
Wondering why more Amazon sellers are eyeing DTC as a serious alternative? When you stack up the costs side by side, the math starts to make sense.
Here’s a breakdown of the typical fees you’ll deal with on Amazon compared to running your own direct-to-consumer channel:
| Amazon | DTC | |
|---|---|---|
|
Website Fees |
$39.99/month (Pro plan) or $0.99/item |
$29–$300/month, depending on the platform and features |
|
Referral Fees |
6%–20% of the item price |
$0 |
|
Storage Fees |
$0.48–$2.40 per cubic foot (approx. $29–$146 per pallet depending on season) |
$25–$40 per pallet/month |
|
Order Prep Fees |
$0.50–$2.30 per order, depending on size/type |
Typically included in base fulfillment costs or charged hourly/project |
|
Fulfillment Fees |
$3.07–$170+ (size/weight based, includes pick/pack/ship) |
Variable: Depends on provider, size, weight, and distance |
|
Pricing Model |
All-in-one (less transparent) |
A la carte (more transparent, customizable) |
|
Shipping Surcharges |
Fuel & inflation surcharge (5% or more) |
Negotiated carrier rates, often itemized |
And it’s not just about fees, it’s about what’s left in your pocket. Let’s break down a simple profit scenario so you can see how Amazon stacks up against DTC when all the numbers shake out:
| Amazon | DTC | |
|---|---|---|
|
Product Price |
$40 |
$40 |
|
COGS |
$12 |
$12 |
|
Fees |
$15 |
$5 |
|
Profit |
$13 |
$23 |
|
% Margin |
32.5% |
57.5% |
The Key Benefits of Selling DTC
When you sell through a DTC site instead of only on Amazon, you can avoid paying Amazon’s growing stack of fees, but that’s not the only win. Here are the key reasons why going direct-to-consumer makes sense, especially if you’re tired of Amazon eating into your profits:
1. No Middlemen, No Markups
Selling on Amazon means handing over a percentage of your profits in referral fees, and that’s before FBA, storage, and other deductions. With DTC, you skip the middlemen and keep more of the retail price, turning a $40 sale with $12 COGS into $23 profit instead of just $13 on Amazon.
2. Total Control Over Your Pricing Strategy
Amazon often forces sellers into a race to the bottom through price matching and algorithm-driven competition. DTC gives you the freedom to price based on value, not pressure, which helps protect your margins from unnecessary discounting fees.
3. Lower Supply Chain Costs
Amazon fees can eat 30–50% of your revenue, depending on product size, weight, and storage duration. DTC fulfillment lets you shop around for better shipping and warehousing deals, potentially reducing your logistics costs.
4. First-Party Customer Data
Amazon keeps all buyer data to itself, so you’re stuck paying more for ads without truly knowing your audience. DTC gives you direct access to customer insights, helping you lower acquisition costs and increase repeat sales with no extra fees required.
5. No More Competing in a Sea of Sellers
On Amazon, you’re just one of over 9 million sellers, many of whom are offering the exact same or nearly identical products. When you sell DTC, you’re not just another option in a crowded marketplace since you control the entire buying experience, making it easier to stand out, tell your brand story, and connect directly with your ideal customer.
6. Stronger Customer Loyalty
On Amazon, the customer belongs to Amazon. With DTC, you control follow-ups, email flows, and the post-purchase experience, turning one-time buyers into loyal fans without paying to win them back.
7. Sell Anywhere Without Limits
Amazon restricts where and how you can sell, especially internationally, unless you pay for additional programs. Your DTC site, on the other hand, can ship worldwide from day one, on your terms, not Amazon’s.
8. Faster Product Testing and Launches
Testing new products on Amazon takes time and money, including listings, FBA setup, PPC, and approvals. DTC gives you the freedom to drop new products fast, ride trends early, and keep 100% of the profit without jumping through hoops.
Challenges in Building a DTC Channel for Your Amazon Brand
Yes, building a DTC channel comes with real benefits, but like any business move, it’s not all upside. There are still some key challenges you’ll have to face, and knowing what they are ahead of time can help you decide if the hassle is worth breaking free from Amazon’s never-ending list of fees.
1. Driving Your Own Traffic
Unlike Amazon, where shoppers are already searching with the intent to buy, your DTC site won’t have built-in traffic. Every visitor will cost you time or money through SEO, ads, influencers, or email campaigns.
2. Owning Fulfillment and Returns
Going DTC means you’re now in charge of storing, packing, and shipping your own products, or paying a 3PL to do it. You also need to set up and manage returns, which Amazon normally handles for FBA sellers.
3. Taking Full Responsibility for Customer Service
With DTC, every question, complaint, and refund request hits your inbox. Customers will still expect fast responses and smooth service like they get from Amazon.
4. Building and Managing Your E-Commerce Infrastructure
You’ll have to choose and maintain your own e-commerce platform, plugins, email tools, and payment systems. On top of that, someone has to analyze the data and optimize performance since it’s not plug-and-play.
5. Strategic Pricing and Competitive Pressure
You’ll be competing against big DTC brands and retail giants, and you can’t just copy-paste your Amazon pricing strategy. If you’re not careful, you could cannibalize your own sales or confuse customers with pricing inconsistencies.
Going Hybrid: Why You Don’t Have to Go All-In on DTC
Not ready to ditch Amazon completely? The good news is, you don’t have to. Running both DTC and Amazon side by side can give you margin relief without sacrificing sales.
Here’s why combining Amazon and DTC works:
- Reduce Your Fee Dependency
A hybrid model works because it lets you offset Amazon’s rising fees by shifting margin-sensitive sales to a lower-cost channel. You can run high-volume or low-margin products through your DTC site, where you avoid FBA storage fees, referral cuts, and surcharges. - Keep Amazon’s Built-In Traffic
It works because you don’t lose the visibility and traffic Amazon brings just by adding a DTC site. While your DTC presence grows, you can keep your top-performing SKUs on Amazon to capture cold traffic and maintain search rank. - Use DTC for Retention and Upsells
A hybrid model lets you do what Amazon doesn’t: build long-term customer relationships that grow. You can use your DTC store to collect emails, launch loyalty campaigns, and retarget buyers who would otherwise stay anonymous in Amazon’s system. - Split-Test Pricing and Offers
It works because you get pricing flexibility without violating platform policies. With a DTC store, you can test promotions, bundles, and subscriptions that would trigger Amazon’s price-matching rules or lead to suppressed listings.
Frequently Asked Questions
Don’t Let Amazon Fees Box You In
Amazon’s growing list of fees, storage, and surcharges can drain your profits, even when sales are strong. But with the right strategies, you can take back control and protect your margins without walking away from Amazon entirely.
Adding a DTC channel helps you balance your revenue streams, build customer loyalty, and reduce fee pressure over time. The brands that win long term are the ones that diversify early; don’t wait until your margins disappear to make the move.
Tired of bleeding margins? Check out MAG’s DTC services for real advice on building a channel you can actually control.
