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Accurate Profit Calculation in the Face of Amazon's New Fee: Digital Services Fee
Following the introduction of Inbound Placement Fees, Low Inventory Level Fees, and Return Processing Fees in 2024, Amazon is now introducing a new fee: the Digital Services Fee. This fee will apply to sellers in countries with a Digital Services Tax (DST), including the UK, France, Italy, Spain, and Canada. If your business is located in one of these countries, you will be charged this digital services fee instead of the DST.
Amazon typically has lower fees for Europe and the UK compared to the US. For instance, their storage fees are not tripling in Q4 as they are in the US. The FBA fees are generally lower, possibly due to geographical factors, and advertising CPCs are more favorable. Additionally, there is no FBA Inbound Placement Service Fee, and the Low-Inventory-Level Fee only affects the EU, not the UK. Amazon seems to be focused on establishing a stronger presence in Europe and is not as harsh with fees in this region. However, this new fee will impact European and Canadian sellers starting October 1, 2024.
If you sell in the Canadian store, you will be charged this fee regardless of your location. Amazon cites the complexity and unpredictability of the DST tax which is affected by buyers’ location as well. So they claim to be making it more predictable by introducing a fixed fee. We should all be grateful for their thoughtfulness, when it comes to fees.
If your business is established in a country where DST hasn’t been introduced and you don’t sell on the Canadian store, the digital services fee won’t apply to you. As a result, U.S. sellers can breathe easy—their U.S. sales remain unaffected, with the changes impacting only their Canadian sales.
Instead of unpredictable variables like the location of the buyer, this new fee will be based only on your location and the store in which you sell.
How is it applied?
The fee will be applied if either:
- Your business is located in a country which has DST, or
- You sell in Canada store.
The countries with DST are the UK, France, Italy, Spain, and Canada. So, if your business is located in one of these countries, you will be charged digital services fee.
If you sell in Canada store, you will be charged this fee regardless of your location.
How is it calculated?
Digital services fee will be applied as a percentage increase to the following per-unit fees:
- Selling on Amazon fees: Referral fee, fixed closing fee, variable closing fee, and get-paid-faster fee
- FBA fees (UK and France only): FBA fulfillment fee and shipping chargeback fee
| Business location | |||||
|---|---|---|---|---|---|
| UK | FR | IT, ES, CA | Any other country | ||
| Store | CA | 2%* | 3%* | 3% | 2% |
| US, MX | 2%* | 3%* | 3% | 0% | |
| *Also applies on FBA fees | |||||
Calculation Examples
1- The business is located in the UK: The percentage will be 2% on selling on Amazon and FBA fees regardless of the store.
| Item Price | 100.00 |
| Referral fee | 15.00 |
| FBA fulfillment fee | 10.00 |
| Digital services fee | |
| On referral fee (2%) | 0.30 |
| On FBA fulfillment fee (2%) | 0.20 |
| Total Digital services fee | 0.50 |
2- The business is located in France: The percentage will be 3% on selling on Amazon and FBA fees regardless of the store.
| Item Price | 100.00 |
| Referral fee | 15.00 |
| FBA fulfillment fee | 10.00 |
| Digital services fee | |
| On referral fee (3%) | 0.45 |
| On FBA fulfillment fee (3%) | 0.30 |
| Total Digital services fee | 0.75 |
3- The business is located in Italy, Spain or Canada: The percentage will be 3% on selling on Amazon fees regardless of the store. FBA fulfillment fees do not incur any digital services fee.
| Item Price | 100.00 |
| Referral fee | 15.00 |
| FBA fulfillment fee | 10.00 |
| Digital services fee | |
| On referral fee (3%) | 0.45 |
| On FBA fulfillment fee (-) | 0 |
| Total Digital services fee | 0.45 |
4- Any business selling to Canada regardless of the business location: The percentage will be 2% on selling on Amazon fees. FBA fulfillment fees do not incur any digital services fee.
| Item Price | 100.00 |
| Referral fee | 15.00 |
| FBA fulfillment fee | 10.00 |
| Digital services fee | |
| On referral fee (2%) | 0.30 |
| On FBA fulfillment fee (-) | 0 |
| Total Digital services fee | 0.30 |
5- If your business is not located in the UK, France, Italy, Spain or Canada and you are not selling in Canada store, then you will not be charged for digital services fee.
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