Merch Royalties Explained: How Amazon Works Out What You Earn

You sell a shirt and a hoodie with the same design, and the hoodie earns you less. Or the same shirt earns one amount in the US and a very different one in Germany. Merch royalties look random until you see how Amazon builds them.

This article walks through the formula, the royalty groups that arrived in 2026, and a few worked examples.

What a royalty is

A royalty is the money you keep from each sale. You do not pay for printing, shipping or returns yourself. Amazon takes those costs out first, and what is left is your royalty.

Amazon's Royalties page puts it this way: your royalty is based on the product's offer price, less any tax, less Amazon's costs, with a multiplier for your royalty group.

So the formula, in plain words:

1. Start with the price the customer pays.
2. Take out sales tax or VAT.
3. Take out Amazon's costs.
4. In the US store, multiply by your royalty group's rate.

What counts as "Amazon's costs"

Amazon lists them: materials, production, fulfillment (picking, packing and shipping, including Prime and free shipping), customer service, returns, exchanges, and fraud prevention.

You never see these costs as separate lines. They are baked into the royalty tables. That is the key idea: a product that costs more to make and ship leaves less for you, even at a higher price.

Why royalties differ

Three things move your royalty: the product, the price and the marketplace.

By product

Every product type has its own costs. A heavy hoodie costs more to print and ship than a light tank top. A two-sided print costs more than a one-sided one (Amazon lists an extra $4.00 cost for 2-sided printing in the US).

Here are a few rows from Amazon's own US table for the basic Creator group, as published at the time of writing:

Look at the hoodie: it costs the customer far more than the shirt, but the royalty is not far ahead. Amazon updates these tables, so always check the current Royalties page in your Merch account (Resources, then Royalties) before you make decisions.

By price

Price is the lever you control. On many products, each extra dollar of price goes almost entirely to your royalty, because Amazon's costs do not change when you raise the price.

Amazon's US standard t-shirt table shows this clearly: from $15.99 to $25.99, the Creator royalty rises from $0.96 to $4.66. That is about $0.37 more royalty for each extra dollar of price, in that table.

Not every product scales the same way. Some accessories (mugs, PopSockets, hats, posters) climb only a few cents per dollar in Amazon's table. So raising the price of a mug does much less for you than raising the price of a shirt.

A higher price can also mean fewer sales. That trade-off gets its own article later in this series. If you are new to the program, start with what Merch on Demand is.

By marketplace

Each Amazon store has its own costs, its own taxes and its own currency.

• US prices exclude sales tax. Tax is added at checkout and is not part of the royalty math.
• UK, EU and Japan prices include tax. The price on the page already contains VAT (value added tax, a sales tax built into the price). Amazon removes it before working out your royalty. Germany's VAT on apparel is 19% and the UK's is 20%, per Amazon's FAQ.
• UK kids' clothing is VAT-free. Amazon notes that because the price is the same for all fits, royalties on UK youth sizes come out higher.
• Currency. A UK sale pays in pounds, a German sale in euros, a Japanese sale in yen. Your bank may convert them when you are paid.

In Amazon's tables the same product can pay quite differently from one store to the next. For example, the UK standard t-shirt at £15.99 shows a royalty of £2.59, while some UK hoodie prices show royalties under £1.

Royalty groups: the 2026 change

In 2026 Amazon added royalty groups for US store sales. They reward sellers who bring their own traffic.

Non-organic traffic means traffic Amazon can tie to you: ads (on or off Amazon) and social media. Organic traffic is shoppers finding you through normal Amazon search and browsing.

The rules, from Amazon's Royalties page and FAQ:

• Plus and Premium need at least 10 US units sold per month.
• Amazon looks at a trailing 60-day window that ends two weeks before each earnings month. Amazon's example: the June group is based on sales from March 19 to May 18.
• Your group updates monthly. New rates can take up to 2 business days to kick in.
• Stores outside the US keep their old rates.

So the same $19.99 US shirt from the table above earns $2.44 in Creator, about $4.88 in Plus, and about $5.27 in Premium. Amazon may change these definitions and rates, so treat them as a snapshot.

Worked examples

Note These use invented example numbers to show the math. They are not real sales.

Example 1: price change. Say you sell 10 standard US shirts at $19.99 in the Creator group, using Amazon's table royalty of $2.44. That is about $24.40 in royalties. You raise the price to $21.99 (table royalty $3.18), and over the same length of time sales drop to 8. Now you earn about $25.44. Fewer sales, slightly more money. If sales had dropped to 7, you would earn less.

Example 2: product mix. Say a design sells 5 shirts at $19.99 and 2 hoodies at $35.99, all in the Creator group. Using the table: 5 x $2.44 = $12.20 from shirts, and 2 x $3.95 = $7.90 from hoodies. The hoodies brought in more revenue per sale but less royalty per dollar of price.

Example 3: royalty group. Say an invented seller sells 100 US units in the window, and 20 came from their ads. That is 20% non-organic, which clears the 15% bar for Plus (as long as they also sell 10 or more US units per month). Every US royalty in the next month doubles compared with Creator.

Where to see your real royalties

• Royalty table: in your Merch account, Resources, then Royalties (you need to be signed in). This is Amazon's full list by product and store.
• Create page: when you set a price, Amazon shows an estimated royalty for that product and store.
• Analyze tab: your actual sales, with a royalties column per product and marketplace.

Tip Use your real numbers, not the table, when you judge results. Amazon may sell at a price different from your list price, and royalties are based on what the customer actually paid.

Why this matters for ads

Your royalty sets the most you can spend on ads for one sale without losing money. A shirt with a $2.44 royalty can afford far less ad spend than a shirt with a $5.27 royalty. That ceiling is called break-even ACoS (ACoS is ad spend divided by ad sales), and it is different for every product, store and royalty group.

How MerchPPC helps

MerchPPC reads the royalties you actually received, per product and marketplace, and shows them in each store's own currency on the dashboard. It uses those real royalties to work out break-even ACoS for each product, and for US accounts it tracks your royalty group window. It does not change your prices or your royalties.

The short version

• Royalty = price paid, minus tax, minus Amazon's costs, times your royalty group rate (US only).
• Each product type has its own costs, so royalties differ even at similar prices.
• On shirts, most of each extra dollar of price goes to you; on many accessories, very little does.
• UK, EU and Japan prices include VAT, which comes out before the royalty math.
• US royalty groups: Creator (1x), Plus (2x, 15%+ non-organic), Premium (2.16x, 35%+ non-organic), with a 10-unit monthly minimum.
• Check the current table in your Merch account. Amazon changes it.