Amazon's Clothing Referral Fee over £40 Drops to 7%

In brief: since 1 March 2020, Amazon had charged a reduced 7% referral fee — instead of 15% — on the part of the price above £40 (€45 in the eurozone) for fashion items — clothing, shoes, bags and accessories — sold with Prime, meaning through FBA or Seller Fulfilled Prime. On 10 May 2022 Amazon extended the promotion to 31 March 2023. It applied automatically to eligible products. Amazon noted the promotional rate carried a 2% upward adjustment in the UK (3% in France, Italy and Spain) to cover digital services tax.

How the clothing referral fee over £40 worked

Portion of the sale price	Referral fee
Up to £40 (€45)	15%
Above £40 (€45)	7% (plus the digital services tax adjustment)

Only Prime sales qualified: FBA and Seller Fulfilled Prime orders. Standard merchant-fulfilled sales paid the normal rate throughout.

A worked example

A £70 pair of trainers sold through FBA: 15% on the first £40 is £6.00, and 7% on the remaining £30 is £2.10 — £8.10 before the DST adjustment, against £10.50 at a flat 15%. Across 1,000 pairs a month that's roughly £2,400 less in referral fees.

What it means for your bookkeeping

• Referral fees aren't a flat percentage. For fashion sellers, a blended rate below 15% was expected; if the settlement shows 15% on everything above £40, query it.

• Fulfilment method affects the fee. Moving a product from FBA to merchant fulfilment lost the discount — part of the real cost of that decision.

• Watch the end date. The extension ran to 31 March 2023, so check the rate on settlements after that date.

• VAT: fees billed in 2022 used the reverse charge for UK VAT-registered sellers — see VAT on Amazon fees.

• Check the rate you paid. The blended rate only shows up per order — see reconciling an Amazon settlement.

How TrueBooks helps

TrueBooks posts referral fees from every settlement to their own account in Xero, and its analytics show fee ratios by marketplace, so you can check the blended rate you're actually paying. See the Amazon Xero integration.