Sponsored Post
The Fulfillment by Amazon (FBA) service allows entrepreneurs to grow a business quickly. Amazon can receive orders from pretty much any e-commerce marketplace or the Amazon Marketplace and fulfill them in no time. However, it is essential that you understand the FBA program and more specifically the various FBA seller fees.
The program was started a few years ago in order to let anyone utilize Amazon’s excellent shipping infrastructure to fulfill your orders. Simply ship your products to Amazon and they take care of the shipping and any additional packaging for your items if required.
Why you should use the Fulfillment by Amazon program?
For starters, you can sell as many products as you want with this approach on the various marketplaces – eBay, Etsy, Jet.com, Walmart.com. You don’t need to have your warehouse, in fact, you don’t even need a storage location. All products can be sent directly to the Amazon warehouses, and that’s it. They will tackle everything and handle the entire shipping process, while you take orders (a third party multi-fulfillment processor may be required). It’s a unique approach and one that delivers lots of good value and impressive quality as you go along in here.
As mentioned earlier, it’s a lot easier to grow your business this way. You avoid spending a lot of time printing labels, sending the products, not to mention managing your inventory is a thing of the past with this particular approach, and that’s a great experience to be had due to that.
At the same time, you can promote your business faster and easier. It’s tough to promote your company when you lack time to do so – that’s where the Fulfillment by Amazon program shines. It delivers all the value and quality you want, and it includes all the necessary features that you would want from something like this. Not only is it a powerful to have, but it eliminates may of the potential problems and challenges that e-commerce sellers face.
What about the Amazon Seller FBA Fees?
When it comes to costs, you will notice that the Fulfillment by Amazon fees will differ. There are two types of seller accounts here: individual and the professional seller account. There’s no fee for the individual account, but you do need to pay a $0.99 fee per item sold on the Amazon Marketplace. On the other hand, if you go with the professional account, it will be $39.99 per month, but there will be no listing fees for each item.
Regardless of the account types, you also have to pay shipping, packaging, and storage fees for sold items.
For items sold on the Amazon Marketplace these fees include fulfillment fees, monthly item storage fees, referral and also variable closing fees. In case you sell more than 40 items each month, it makes more sense to use the professional account; otherwise, the individual one will work just as well. Referral fees for items sold on the Marketplace will be 6%-20% of the sale price, but most of the time they can be 15%. Variable closing fees can be around $1.25-$1.45.
Fulfillment fees change from time to time, but you can always find them here. Amazon charges for both fulfilment (shipping and packaging) fees and monthly inventory storage fees. Monthly inventory storage is charged per square foot of space that you use in the Amazon warehouse. The thing to keep in mind is that fees for this tend to be very high towards the end of the calendar year, so you should manage this the best way you can.
Use the following chart as a reference for all FBA Fulfillment & Storage costs:
How does the FBA program work?
The first thing you want to do is to scan products into the Amazon seller account. Amazon will require you to print some unique tags for the product, then you package all stuff into boxes, and then Amazon will tell you where you need to send all products. Once you submit all products, Amazon will handle all of that for you.
The products will be stored in one of their many warehouses, and then they will be sent directly to the buyer fast and easy. It’s a great system that they use with great success and we use them with our taxomate tool to send all of our settlements to Quick Books and Xero. Plus, the fact that Amazon actively takes care of everything and they don’t require you to put a lot of work into this is helpful. After all, it would be really hard for you to store the items and send them fast. That’s why the Fulfillment by Amazon system does make a lot of sense to use.
So, is it actually worth it to use the FBA program considering the fees?
As you can see, the FBA program does have quite a lot of fees that you need to take into account. So it’s natural to think about it and identify what works for you and what doesn’t by using Amazon profit calculator. The best part is that it does provide you with a stellar return on investment, and at the end that can be quite the experience. It’s by far one of the best options on the market, and in the end that can be an excellent opportunity to focus on. There will always be some challenges as you go along, but in the end what matters is that the FBA program can help you grow your business.
