Introduction
For many people in the UK, selling on amazon is an attractive way to turn a hobby, a small-batch product or unwanted goods into cash. It offers access to millions of shoppers and a familiar marketplace, but success depends on understanding fees, fulfilment choices and the little practical details that affect profit margins. This guide explains how the platform works for UK sellers, outlines likely costs and equipment, and helps you decide whether it suits your situation.
How it works — the basics
At its simplest, you list items on Amazon, set prices and handle orders. There are two main selling plans for individuals and small businesses: an Individual plan with no monthly subscription that charges a per-item fee, and a Professional plan with a monthly subscription that removes the per-item charge and adds business features. Amazon charges referral fees on most sales, normally a percentage of the item price that varies by category.
Fulfilment models
- Fulfilment by Merchant (FBM): You store, pack and post orders yourself. Good for low-volume sellers or bulky items that attract high third-party fulfilment fees.
- Fulfilment by Amazon (FBA): You send stock to Amazon warehouses and they pick, pack, deliver and handle returns. This raises visibility and Prime eligibility, but adds storage and fulfilment fees.
Typical costs and pricing to expect (GBP)
Costs vary a lot with product type, size and sales volume. Below are realistic ranges to help plan a budget.
Subscription and listing
- Individual plan: per-item fee around 75p. No monthly charge. Best for occasional sellers.
- Professional plan: roughly £25 plus VAT per month. Suitable if you sell more than a handful of items each month or need advanced listing tools.
Referral and fulfilment fees
Referral fees are typically a percentage of the sale price and vary by category, often in the range of 8–15%. Fulfilment by Amazon fees depend on size and weight; small items may add a few pounds per sale, while larger items cost more. If you fulfil yourself, postage and packaging are the main variable costs.
Postage and packaging
- Royal Mail and courier prices vary; expect around £1.50–£4 for small parcels within the UK, rising for heavier or tracked services.
- Packaging materials: padded envelopes to small boxes typically cost £0.20–£3 each depending on quality and bulk discounts.
Other startup costs
- Printer and postal scales: from about £10 to £60 for a basic set-up, label or thermal printers from £30 upwards.
- Barcode scanner or handheld device: optional, £20–£150.
- Product photography: DIY setups can be inexpensive; expect to pay £30–£150 per product for pro images if you outsource.
- Returns and handling: set aside a contingency — returns, refunds and customer service time are real costs.
Practical setup and day-to-day considerations
Think through the logistics before listing stock. If you have limited storage at home, FBA might be attractive despite higher per-item fees, because Amazon handles warehousing. If you sell seasonal or bulky goods, holding stock yourself can be cheaper but takes space. For part-time sellers, the Individual plan avoids a monthly fee and suits low volumes.
Photography, listings and keywords
Good photos and clear titles are crucial. Shoppers often choose by image first, price second. Use natural-light photos on a plain background and include multiple angles. Product descriptions should be factual and list benefits, dimensions and any guarantees. Learn basic keyword thinking — the phrases shoppers use — but avoid keyword stuffing.
Returns, VAT and legal points
UK consumers have strong protections. Amazon returns policies vary with your fulfilment choice, and handling them promptly protects your seller rating. If your sales exceed the VAT registration threshold of £85,000 (current at time of writing), you must register for VAT. Even below the threshold, some sellers choose to register to reclaim input tax; get advice from an accountant if you’re unsure.
Alternatives and diversification
Amazon is powerful, but it needn’t be your only sales channel. eBay suits second-hand and niche items, Etsy is better for handmade and craft, and a basic Shopify or WooCommerce site can help you build a brand and retain customer data. Many successful sellers use Amazon for reach and a shopfront elsewhere for brand control.
Pros, cons and who should consider selling on Amazon
Pros
- Huge customer base and trust, especially useful for new product discovery.
- FBA simplifies fulfilment and offers Prime visibility.
- Tools and data to scale if you want to grow from a side hustle into a business.
Cons
- Fees can be significant, particularly for low-margin items or bulky goods.
- Competition is intense; pricing pressure can be severe in some categories.
- Less control over customer relationship and brand presentation compared with your own website.
Who it suits
If you sell compact, mid-priced products with good margin, or handcrafted items that can stand out with great photographs and descriptions, Amazon can be an efficient channel. If you’re testing a product idea, selling on amazon offers low friction to market. If your items are large, fragile or low-margin, consider alternative platforms or merchant-fulfilled sales to keep costs down.
Final thoughts
Selling on Amazon can be a solid route into ecommerce for many UK sellers, but it pays to do the sums. Factor in subscription and referral fees, fulfilment and returns, and the time cost of customer service and marketing. Start small, refine your listings and logistics, and consider diversifying channels once you have a repeatable process.
FAQ
Do I need a company to sell on Amazon?
Not necessarily. Many sellers start as sole traders. If you expect substantial sales, registering as a limited company or consulting an accountant can be sensible for tax and liability reasons.
Which is better for beginners: FBA or fulfilment by merchant?
For beginners with limited storage, FBA removes day-to-day packing and postage. However, if margins are tight or you have large items, merchant fulfilment can be cheaper. Try both on a small scale to see what works.
How quickly will my items sell?
That depends on demand, price, listing quality and whether the item is seasonal. Promote new listings with competitive pricing and excellent images, and give them a few weeks to gain traction.
Is selling on Amazon profitable after fees?
It can be, but margins need careful calculation. Include all fees, postage, packaging and your time when pricing items. Low-margin goods can quickly become unprofitable once referral and fulfilment fees are applied.