Everything You Need to Know About Amazon FBA fees
Every smart and upcoming seller knows that the right place to get the highest reach and the best-added benefits is the Amazon FBA.
Here, sellers can list their products, let Amazon store them in its fulfillment centers and take care of all the shipping, and customer service. This allows the sellers to focus on actual business development than be embroiled in the loopholes of logistics.
Amazon FBA is a great opportunity for small businesses that cannot afford their own storehouses and expensive freight carriers. But like all good things, it does not come free.
However, this doesn't mean that it will eat out profits. It is actually a win-win strategy devised by Amazon FBA to let sellers utilize their framework for a nominal cost.
Here is everything you need to know about the Amazon FBA fee .
Types of Amazon FBA Fees
There are six major categories of how Amazon FBA charges sellers.
Referral fees are like the commission you pay to Amazon for every sale you make through Amazon FBA. It costs you about 15 % or less of the price at which the product was sold.
Variable closing fees
There are certain product categories that may be charged a flat fee. These include any forms of media and entertainment products like DVDs and books.
Fulfillment by Amazon fees includes the price involved in the logistics and the shipment of your product through FBA. Searching for the best Amazon Product Research Tool follow DataGuide and find a tools to help you become an Amazon seller. This involves product pick up, packaging and shipment. The major reason why FBA works is that it costs you a lot lesser if you choose to do all the grunt work involved in product shipment.
Individual seller fees
If you're not a professional dealer or retailer but instead an individual selling their own limited products, you will have to pay a flat fee of $1 per item.
This is the monthly payment professional sellers will have to pay Amazon. In this model, the seller need not pay per item cost but a flat $39.99 monthly. So, if you choose to sell more than 40 products, you better become a professional seller.
Storage fees are Amazon's way of charging sellers for making use of their warehouse facilities. Amazon owns huge warehouses spread across acres of land and yet there is a limit to the number of products it can hold at a time.
How Much Does Amazon FBA Cost?
The Amazon FBA cost listed above may seem overwhelming but if you sit down and make the calculations, you will realize how much you can actually save by opting for Amazon FBA.
For instance, for an individual seller, it might be a herculean task to find the right storage facility and make sure the product reaches the customer on time. They will have to make sure the packaging is done right and the product is undamaged on delivery.
Packing and shipment of each item can be a time consuming hard manual labor for sellers. Whereas Amazon makes it all the more easy and cheaper with assured quality of the product in each delivery. Here are some tips to make the best use of Amazon FBA
- Understanding the minimum referral fees and the percentage for each product category. Start with products that have less than 15% seller fees and choose the products that will get sold faster.
- FBA fees can vary based on the size and weight of the product to be sold. Amazon offers two size categories - Standard and Oversize - each with subcategories in the range of small, large and medium. The lighter and smaller your products are, the lesser it will cost you to sell them through Amazon FBA.
- If you are going to expand your business and are vying to earn a large income through Amazon FBA, opt for the subscription fee instead of the individual seller plan.
- Avoid sending in more than 2 months of stock to Amazon storage. The more your product sits in the Amazon warehouse, the more it is going to cost you in the form of storage fees.
The Wrap Up
For a long term seller, the benefits of selling through Amazon FBA are undeniably strong. Amazon gives you access to a huge consumer base, takes care of all the manual labor involved in the shipment of the products, gives you good analytics support to run sales estimate and you can scale up and down your sales with much ease.
You will find that you have saved both money and precious time needed for the much-beloved innovation and uplift your business needs.