Do you know that understanding of Amazon FBA fees is the most crucial part of Amazon’s business?
Whenever a person starts to think about an online selling platform, the biggest site that comes to mind is Amazon. Amazon is one of the largest online selling platforms that is operating in Seattle.
According to the reports, Amazon delivered almost 3.5 billion packages in 2019 using their fulfillment network. But, what is the Fulfillment platform? Another key problem new users face in this business is Amazon FBA fees and how to calculate it.
In this guide, we will cover all details about the Amazon FBA fees in detail. We will learn about the cons and pros of Fulfilment and how you can start your business using Amazon.
Table of Content
Chapter 2: How can you start your business on Amazon?
Chapter 3: Guide to Start Fulfillment by Amazon Business
Chapter 4: Benefits of FBA to seller
Chapter 5: Drawbacks of FBA to Seller
Chapter 6: Understanding Amazon FBA Fees
Chapter 7: Tools to Calculate Amazon FBA Fees
Chapter 8: Alternatives to Amazon FBA
Chapter 9: FAQs about Amazon FBA Fees
Table of Contents
Chapter 1: What is Amazon?
Amazon is one of the largest online stores that is perfect for a buyer and a seller. But, before going towards the FBA and its fees, let’s talk about the history of Amazon and how it became the world’s largest online store.
1. History of Amazon
Amazon.com, Inc. is a multinational American company based in Seattle, Washington that started its operations in July 1995. In the start, the company’s entire focus was on books, but Jeff Bezos (founder) emphasized saying “Amazon is more of a technology company”.
Originally, Bezos wanted to name the company “Cadabra”. But, was talked out of it by his lawyer. Later, he went for the name after the world’s largest river.
Amazon took its first steps from Bezos garage, and since then, it is changing the way we conduct sales/purchases.
2. How Amazon became the largest online platform?
At its peak, Amazon sold more than 400 items/second. The question is how did it grow from a bookseller to a retail giant?.
Well, since its foundations, Amazon has grasped the attention of users due to its modernized methods of conducting business. In 1995, a book store was launched, and after that, the company’s migration across different parts of the world made a rapid growth of its services.
The world was shifting towards the state of the art solutions and that was the perfect opportunity for Amazon to step up the game since its motto was “Deliver anything, anywhere”. Due to the advanced internet capabilities, Amazon quickly gained the title of the world’s largest eCommerce store.
Other than that, the company launched a series of IT services that include AWS and Amazon prime video streaming that boomed the name of the giant.
3. How can you start your own business on Amazon?
Yes, the idea of entrepreneurship is a high risk and challenging. While it is great when looked through the society as many people are innovating, taking high-end risks and working 18+ hours is not in the best interests. Keep in mind that potential pay is good with this. But, the odds of success are pretty low.
The thing is what if there was a way to start a business without sacrificing blood and sweat.
That is where Amazon comes in. The organization has made it simpler for a person to start his/her own business by spending just an hour/day and less than $1000. You can create your own business empire offering financial and time freedom. Here is what it takes and how you can do it.
-Research sample products
The first and foremost thing to consider is looking for the product that you want to sell in the market. For that, the best way is to visit Amazon.com and search for best seller ranks (between 100-6000).
Then visit a similar marketplace like Alibaba or DHgate who make exact products and order samples. The samples costs between $20-$30 and you can request the supplier to make custom changes for an extra little cost.
-Order inventory
After selecting the product by inspecting the samples, it is now time to order the items in bulk. Bear in mind that you should calculate the expense that is required to get the product to the customer. If you are going to order from China, you will need a sourcing agent like Ejet.com to handle all the necessary steps.
The best solution to store the items is Fulfilment by Amazon (FBA) where you can order the items from the supplier and send them to Amazon where they will handle shipping and customer service. Yes, Amazon takes a little percentage from every sale.
-Branding
There are plenty of manufacturers that will allow you to sell the product under their name. But, there are some that offer “white label” products where you can create your own custom branding and sell products under your name.
-Launch the product
The last step is to divert the user’s attention to your product after launching it. You can do that with Amazon ads, or there is an option to go for Facebook ads. In the end, the ultimate goal is to create brand awareness.
4. Advantages/disadvantages of Amazon selling
Amazon has effectively carved out the sales and made itself a king in the online retail race. The thing is small-scale businesses are looking for a way to start their financial freedom plan using Amazon. Here are some of the benefits and downsides of selling on Amazon.
A-Benefits
-More sales
Every month millions of customers come to Amazon to shop for their products. Take a look at this that in 2019, $240 billion worth of products were sold using Amazon. By listing your products on Amazon, you automatically gain the trust and credibility of the customers as many customers prefer buying from Amazon rather than other channels.
-International reach
Amazon is the biggest and most trusted seller globally and it is very easy to start your business in different markets. The giant is operating in more than 100+ countries. And it is drastically easier to expand your business using Amazon, compared to other online cart systems.
-Low marketing costs
Amazon basically works like a search engine for products. Shoppers come and search for their desired products. And that saves the cost of advertising your product. Yes, there is a need to stand out from the rest of the crowd by putting in the efforts in the listing. This way you will be on top of the search results. Plus, there is always an option to advertise products using sponsored products, sponsored brands, and lock screen ads.
B-Downsides
-High competition
Due to the advantages more and more sellers are trying to get into Amazon selling and that is increasing the competition. Unlike Google shopping which lists products according to the seller’s page, Amazon orders its pages by products. So, when multiple sellers sell the same products, Amazon decides what product is the right fit. And when a customer adds the product to the cart, most likely featured sellers will get the advantage.
-Selling Fee
Another downside of selling on Amazon is that it charges hefty fees that can result in lower profit margins. Amazon FBA seller accounts are divided into two different types
- Professional account- $39.99/month with no per item fee
- Individual account- no subscription fee but $0.99 fee per item sold
Plus, there are other fees included that consist of Amazon FBA fees, referral fees, and removal order fees.
-Complex data management
Amazon wants to update product data on daily basis. That means sellers need to create a feed from scratch. And, there are specific requirements that include ASIN number and uploads to be done using Amazon API. The API is a complex method and can cost a seller.
5. Is doing business on Amazon worth it?
Amazon offers multiple advantages to its sellers that allow them to sell their products without any difficulty. For example, Amazon FBA enables users to store their product in Amazon warehouse available in over 100 countries. Amazon is responsible for handling the product.
Another perk of using this channel is that sellers can expand their business without any hectic work. Since the organization is popular and trusted by a lot of users, there is a chance, your small-scale business can rise to a multinational business as millions of customers visit the site every day.
Chapter 2: How can you start your business on Amazon?
Now that you have an idea about What Amazon is, let’s talk about how you can start your own business from less than $1000 as an investment. The first question that comes into mind is what can you sell on Amazon.
1. What can you sell on Amazon?
Amazon is a one-stop-shop for everything a customer need. That means there is a wide variety of products available on the company’s website. If you are planning to sell your items using Amazon but are not sure what you start with. Here are some of the categories that are worth looking for.
-Electronics
The category that has the eyes of every customer is electronics. Amazon actually offers a wide range of electronic products from different manufactures that include headphones, cameras, laptops, smartphones, and accessories. Furthermore, customers can also find wearables and security devices.
-Fashion apparel
Moving towards the second category you can sell is fashion items. In 2019, Amazon sold almost 400 items per second related to fashion. A new seller can opt for T-shirts, jeans, shoes, and purses if they are planning to sell on Amazon.
-Industrial products
There is always an option to go for industrial tools and items as they have a good profit margin. Amazon allows items like cutting tools, hydraulics, hammers, and raw materials for selling.
-Automotive
Car accessories are very popular in Amazon’s listing. The category is loved by every car enthusiast. Sellers can select items like car care, exterior or interior accessories, paint supplies, performance parts, and many more.
-Miscellaneous
Other than the above-mentioned categories Amazon covers baby products, gaming consoles, art & craft, beauty & personal care, health items, home products, and sports supplies.
2. The steps required for starting the business
Amazon has over 300 million active customers and selling on this channel can result in higher profit margins. But, to start a business on Amazon, there are a number of steps required that need be fulfilled before you start selling.
To clarify, these steps are when you have researched the market and have decided what you are going to sell and contacted the supplier.
-Register for an Amazon selling account
The first step towards Amazon selling is registering for an amazon account. The organization offers two main types of accounts named “Individual account” and “Professional account”.
There is no subscription fee in an individual account per amazon charges a $0.99 fee per item sold. Whereas, the professional account is charged at 39.99/month and gives the power of Amazon’s API and platforms like Launchpad.
Here are some of the things you need along with seller account
- Bank account number
- Chargeable credit card
- The government issued national ID card
- Tax information
- Phone number
-List your first product
In order to sell a product on Amazon, first, you have to list it. Now, there two options for doing that. The first one is to select a matching list or if you are the first seller, you can create your own list. The product listing varies on the seller’s selling plan. For example, a professional seller account has the option of listing products in large batches. Whereas, individual sellers can list products one at a time.
Here are some of the things that you need to list the product
- Products must have GTIN (Global Trade Item Number)
- SKU
- Product title and description
- Product images (500 x 500 or 1,000 x 1,000 pixels)
- Search keywords
Note: Following practices in the listing can result in a huge impact and can place you one step ahead. So, make sure you are using high-resolution images with descriptive titles, and clear bullet points when explaining features.
-Extra information
Another important thing to consider is the product details page. A product details page is the one where customers can read about your offering. When multiple sellers offer a single product, Amazon combines the information into one detailed page.
After following these steps, there is a chance you will get your first sale. But, the key thing is patience. So, hold the horses and let time do the work.
Chapter 3: Guide to start fulfillment by Amazon business
Amazon is trying to help its sellers by providing them with state of the art solutions. And that is where Amazon FBA comes in. But, the question is “What is Amazon FBA”.
1. What is FBA?
Let’s look at an example of Fahad and Hamza who both have started their online selling business.
Whenever a customer places an order from Hamza’s products, Hamza has all the responsibility of packing it and shipping it to the customer. Furthermore, he also has to store the items in his own warehouse and has to provide customer support to make sure customers are happy. Yes, this is pretty economical when talking about a single order. But, it can get a lot hectic if there are multiple orders.
For example, let’s say Mr. Jason has moved all those responsibilities to Amazon by opting out Amazon FBA option. All, Jason has to do is ship the products to the Amazon warehouse and the rest is up to the Amazon officials. Amazon will not only store the items in their warehouse but will also pack the item, ship it, and will handle customer support. In addition to that, Amazon FBA will also help Jason in scaling his business with its huge network.
To summarize, Amazon FBA is an option that allow sellers to store their product in Amazon’s warehouse. And, whenever a customer places the order, a highly trained amazon work team will pack the item and ship it to the customer. Yes, Amazon charges a little percentage called Amazon FBA fees whenever an order is placed.
2. How does FBA work?
Merchant fulfilled means you are packing the order and shipping it to the customers. Amazon charges the shipping fee based on the shipping method and product type. Set shipping rates apply to all products under the individual plan. So, it is important to determine if you can list the items without lowering the profits.
The best option here is to select an Amazon shipping tool like Amazon FBA that will manage all the processes after the order has been placed and is economical compared to merchant fulfilled. Talking about Amazon FBA, here is how it works.
Step 1: Ship the item to Amazon’s warehouse where it will be scanned and made available for sale.
Step 2: Whenever an order is placed, Amazon will pack the order and ship it to the customer.
Step 3: Amazon collects the payment from the customer and pays you after every two weeks.
Step 4: Amazon customer support handles all returns, refunds, and questions.
Note: A fee known as Amazon FBA fees is charged on each order.
3. Pros/Cons of FBA
Amazon FBA has gained a lot of attention due to its perks. But, it is not all lilies. There are some drawbacks. But, first, let’s cover the good side of the channel.
- Pros:
-Hassle-free shipping and returns
Whenever you get an order, you have to print the slip, print the label, pack the box, tape the box, place the label and ship it to the customer. There is a chance you are doing it yourself or you have an employee dedicated to it. But, what if there are 10 or let’s say 20 orders? A good piece of time will be lost to this method.
Now, entering Amazon FBA, it covers all these aspects. The only thing you have to do is send your products to Amazon’s warehouse and let the company do the rest. This is for shipping.
Let’s talk about the returns, you have to communicate with your buyer, send them a replacement or refund, check the item, and list it again. In Amazon FBA, you don’t have to deal with the buyer because Amazon will handle the return processing.
-Cheap shipping
The next advantage of Amazon FBA is that the shipping costs are lower compared to other channels. For example, with FBA, $1.04/unit in packing and $0.50 to $0.60/pound of weight handling. The shipping is free. So an overall product with a 3-pound weight will cost around $2.50/order compared to inhouse fulfillment that can range from $2.80 to $3.50 for a 3-pound product.
-Multi-channel fulfilment
Amazon FBA is not only for Amazon itself. You can sell your products using any channel you want and can cover your multi-channel orders using FBA.
Despite all these perks and advantages, there are still some cons to this FBA channel that you need to consider.
- Cons:
-Stale inventory
A warehouse is a place that holds millions of products. Like that, Amazon FBA warehouse houses items and there is a chance not all of them will sell. So, you will probably end up paying rent for stale items that are not selling.
-Mixed inventory
Like I said, Amazon houses millions of products. And, not every seller gets his own place for storing the items. There is a chance Amazon mixes up your product with other items lying in the same category. It is not a big deal, but your customers are likely to get an item that you didn’t send to Amazon.
-Difficulty in sending the item to Amazon
The last con of Amazon FBA is that Amazon has strict rules when talking about storing the items in their warehouse. For example, you have to label each one of your products, pack them into multiple shipments and send them off.
4. Tips to scale FBA business
A lot of sellers have tasted the Amazon FBA business and are looking for scaling their business without increasing their workload. So, here are some tips that will help you in scaling your Amazon business.
-Launch more products
Let’s say you are already selling hair care products and have gained feedback from customers. Why not continue to add more hair care products under the same listing. But, adding additional products should be done carefully. Check what type of products your customers are diverting their attention to.
-Add product variants
This is the easiest way to scale your FBA business. Instead of launching similar products, why not use the already established ones. Actually, launching a product under a different category takes time. So, the best solution is to add variety to the existing one. For example,
- Add different sizes
- Range of color and designs
- Packs or combos
-Expand into more Amazon market
Yes, Amazon US is leading the sales, but entering into other markets can also result in huge profits. In fact, Amazon insists on launching your product in the rest of the world and will handle the shipping.
Countries like Germany and Japan can provide additional revenue as these markets have a high level of demand.
-Go off-channel
Apart from Amazon itself, you can opt for channels like eBay, Walmart, and Ruketan. Or there is an option to sell your products using your own Shopify or WordPress website. Don’t worry, Amazon FBA also features the capability to sell products on multi-channels.
Chapter 4: Benefits of FBA to seller
Amazon offers plenty of benefits of using Amazon FBA to the seller and that is why a lot of sellers are opting to this option. Some of the benefits are.
1. Win the Amazon buy box
Amazon FBA offers a capability to win Amazon Buy Box that can lead to more sales. Buy box is the first thing a customer sees whenever he/she visits the product’s page.
To be clear, no one knows how this formula works and which seller can win the buy box. However, according to some sources, free shipping is one of the keys to getting this.
2. Earn Ccustomer trust
Amazon is trusted by a lot of customers because of returns and improved customer services. With Amazon FBA, you can get more items to your customers who are looking for free shipping. The FBA symbol guarantees efficient delivery and it is something shoppers can trust.
3. Lower your shipping cost
With merchant fulfilling, there are a lot of factors to be considered. For example, there is weight, size, and destination. This is also valid for small packages. Despite all these factors, the customer still expects free and fast shipping even it is not profitable for the seller.
With FBA, you can pay a lot less than compared to the other option. All these are covered by amazon itself.
4. Customer service
Dealing with a customer can be hectic work because you can reply and answer the queries. It is easy in the case of a single order, but, multiple orders are difficult to manage.
Amazon FBA option has its own trained customer agents that cater to this problem, allowing you to relax in every way possible.
5. Return management
With Amazon FBA, your customers can use the return centers whenever they feel like using them. The team will handle all necessary processes and you won’t have to stress about the difficulty of logistics.
Chapter 5: Drawbacks of FBA to seller
Despite having benefits to the FBA, there are still some drawbacks that you need to consider when going for the Amazon FBA option.
1. Commingling merchandise
Amazon combines the same items from different sellers for processing and shipping. From a seller’s perspective, it saves you time and money because you don’t have to stick FBA labels to each of your products. As for Amazon, it helps them in getting the product to the customer as fast as possible.
The downside of this is that your buyer can get the item that he didn’t order. Let’s say you are selling a spatula of the same specs that another seller is selling. Now, the other seller is offering a lower quality compared to you. Amazon will not compare the quality as long as specs are same and with this, your customer can get the item that you didn’t send to FBA warehouse.
2. Sales tax compliance
Another problem with FBA is that sales tax compliance. As a seller, you have to collect sales tax in states where your item has been stored. This means that if your items are stored in multiple Amazon warehouses all over the country, you have to pay the taxes.
Back in the day, Amazon was transparent with your stored items but now you can see exactly in which warehouse your items are stored by going to Reports > Fulfillment > Inventory Event Detail.
3. Long-Term storage fees and managing inventory
FBA is growing more than ever due to the services offered by Amazon and growing means paying more for the storage. Other than that, Amazon charges you more if your product sits more than 365 days or in peak holidays.
The issue with this is if you have an inventory that is not selling, you still have to pay for its storage. Plus, it is very difficult to monitor which of the items are entering into stale mode if you have thousands of products offering.
4. Preparing items for shipment
Yes, Amazon FBA handles all the processes after you have shipped the item to fulfillment centers. But, sending the items to fulfillment centers is still a hectic process.
Amazon takes this seriously and it is on the seller to meet the requirements. For example, the seller has to label each item and ship it to the warehouse. Other than that, it takes more planning and time to decide the right warehouse for sending the items.
Chapter 6: Understanding Amazon FBA fees
Back there we told about a percentage that Amazon charges when you store your items in the fulfillment centers. Well, that is called Amazon FBA fees. Let’s talk about what it is and how you can calculate it.
1. How to Calculate Amazon FBA fees for Amazon.com orders
While it is important to go through the benefits of using Amazon FBA, there is also a need to look through the Amazon FBA fees and decide whether it is beneficial for your business or not. Amazon has divided its Amazon FBA Fees into three main categories standard size tier, oversize tier, and dangerous goods. The organization charges fees on per unit basis. To calculate the fee, look through these first steps.
- Select whether the product is non-apparel or apparel
- Check the product size (standard or oversize tier)
- Calculate shipping weight
-Standard-size product tiers
Let’s talk about the standard-size tier. For calculating, we will assume the shipping weight to be 10oz
For non-apparel items (standard size items)
The overall cost of a product that lies under standard size their and has a weight of 10oz will cost $2.50. Take a look at this table to understand it better.
For apparel items cost (standard size items)
For apparel items, the cost of FBA will be $2.92. given that it lies under the standard size tier and has a weight of 10oz.
Note: Remember to add the monthly storage fee that is $0.75/cubic feet and from October to December it is $2.40.
Monthly Storage Fees
-Examples of standard size products
Examples of items that lie under the standard size tier are given below
*Small standard size (0+ to 10 oz)
*Large standard size (apparel, 10+ oz to 16 oz)
*Large standard size (over 3 lb)
-Oversize product tiers
Moving towards oversize product tier Amazon FBA fees, here is how you can calculate it. (taking 71lb to be the weight of the product), the fee will be $8.26 + $0.38/lb above the first 2 lb.
Note: This is for both apparel and non-apparel. Below is the chart to understand the calculation better. And, you have to add the monthly storage fees that is same as standard-size product tier.
6.1.4) Examples of oversize products
Examples of oversize products are
-Fulfillment fees for dangerous goods
The last tier that Amazon categorizes products into is dangerous goods. These items require special handling and hazmat suits. The table below shows how to calculate the fee for that.
And there is a separate storage fees for these types of goods. Take a look at the table for that.
2. How to calculate Amazon FBA fees on multi-channel orders
As mentioned, Amazon allows users to use the FBA service to sell goods from their own websites. However, the costs with this are different.
Taking the example of the same 10oz product that lies under the standard-size tier, it would cost $5.69 to offer expedited and two-day free shipping. For next day shipping, the figure will turn to $12.80.
3. Additional fees to consider
There are some additional fees to consider when talking about Amazon FBA fees. Now, these are mentioned so you can consider going for the FBA option or not.
-Selling Fees
This is the fee that is linked to the selling plan. Amazon divides this fee into two plans and the plans are
Individual plan– $0.99 per unit sold
Professional Plan– $39.99 per month no matter how many units you sell
-Referral Fees
Amazon charges a referral fee for each item sold. The fee depends on the product category. Most of the time, this fee lies between 8% to 15%.
-Removal Order Fees
This is the fee when you ask Amazon to remove or dispose of your item in their fulfillment center.
-Returns processing fees
Whenever a customer returns the order, you have to pay a fee to get the job done. Yes, the processes are done by Amazon itself but, the charges are paid by you.
-Unplanned Service Fees
If your items arrive at the Amazon warehouse without proper paperwork and labels, Amazon does these processes and charges you with a fee.
4. How to calculate the shipping weight
For calculating the Amazon FBA Fees, you have to calculate the shipping weight. Amazon has two main shipping categories from where you can see estimate the shipping weight. Here is how to calculate the shipping for each category.
-Standard size and special oversize
In this category, the shipping weight for each unit is calculated by adding the packaging weight to the unit weight. Shipping weight for standard and large size tier under one pound is calculated by rounding to the nearest whole ounce.
-Large standard-size items weighing more than 1lb, small oversize, medium oversize, and large oversize.
For this category, the shipping weight for each unit is calculated by adding the packaging weight to the dimensional weight. Then the total weight is rounded up to the nearest pound.
The table shows how you can calculate the overall shipping weight.
-Examples of dimensional weight
The items that weigh more than one pound have an additional term called dimensional weight that is added to the packaging weight and that is used to calculate the shipping weight. Dimensional weight is the unit volume (length x width x height) divided by 139. Dimensional weight for oversize items assumes a minimum height and width of 2 inches.
Chapter 7: Tools to calculate Amazon FBA fees
Due to the increased demand of Fulfilment by Amazon, many are using calculators that can be used to calculate Amazon FBA fees. Now, there are multiple tools available out there. Let’s talk about these tools.
1. Amazon’s FBA calculator
The Amazon FBA calculator is a useful tool for a seller who is using the FBA service. With this tool, a seller can compare FBA or FBM (Fulfilment by merchant) fee and can select the most economical one.
-What do the FBA Calculators take into account?
Amazon FBA fee calculators are available for different countries. Each calculator takes individual currencies along with the different fees in those countries. Plus, there are some additional fees that are added when calculating the fee.
- Order handling
- Outbound shipping
- weight handling
- Inbound handling
- Prep service
- Picking and packing
Note: These additional fees are not fixed because there is a chance that you don’t have to pay the picking and packing fee or prep service fee.
2. AMZScout’s Chrome extension
Another tool to calculate Amazon FBA fees is AMZScout which comes in the form of a chrome extension. To use the AMZScout, open the product on the Amazon and select the FBA calculator to find the exact fee in a matter of seconds.
3. EcomCrew
EcomCrew has its own Amazon FBA fees calculator that comes in the format of an excel sheet. You simply need to enter the dimensions and weight and it will do the rest and will give you the final fee.
Chapter 8: Alternatives to Amazon FBA
There are a series of alternate options to Amazon FBA. The reason they are here is that some of them are pretty cheap compared to the giant option. Other than that, some offer capabilities that are not available on Amazon FBA.
1. ShipMonk
Just like Amazon FBA, ShipMonk delivers its services using modernized tools and it is perfect for people who are getting into the online retail business. For instance, this is the perfect service if you are a person who is operating from your home and are not expecting huge orders.
2. ShipBob
just like ShipMonk, ShipBob is the new name is the town but its reputation is up to the highest standards. Now, if you are thinking why not use famous platforms like FedEx or Rakuten instead of ShipBob, that is because ShipBob deals in a variety of categories that include beauty, clothes, shoes, and electronics. And the amazing thing is it has an annual order requirement of just 1800 orders.
3. Rakuten Super Logistics (Webgistix)
Rakuten claims that their accuracy is 100 percent and they say if any type of error occurs, they do the fulfillment for free. Plus, they also make 98% of fulfillment in one day in the US. They have 13 fulfillment centers operating in the US so that makes it very flexible.
4. Red Stag Fulfillment
Red stag fulfillment is another option that you can opt for and the best thing is it meets the requirement for seller fulfilled prime. It is best for fast direct-to-customer fulfillment and small to the medium size e-commerce business.
5. Fulfillment Service
eFulfillment Service is the one if you are looking for something that is cheap yet offers state of the art options. In this service, there is no setup fees, long-term storage fee or minimum order volume.
Chapter 9: FAQs about Amazon FBA fees
1. Is Amazon FBA worth it in 2021 during Covid19?
Online retailers have witnessed a hike in Covid-19 due to the fact that a lot of people are following SOPs to prevent the spread of the disease. In other words, the pandemic has led to more sales using online platforms like Amazon compared to traditional retail stores.
As from the seller’s side, they don’t have to manage and interact with the customer even in times of COVID-19.
Due to these points, doing business using Amazon FBA is worth it in these times of pandemic.
2. How much fee Amazon takes for FBA?
Amazon takes a percentage of orders from the seller. Now that percentage consists of fees like selling plan, referral fees, return processing fee (In case the customer returns the fee), and handling fee (depends on the location). There is a detailed chart given above where every type of fee is mentioned that Amazon takes.
3. What do you need for Amazon FBA?
To get the registration done, you will need some additional information apart from the seller account that includes.
- Business information
- Credit card
- Phone number
- Tax information
4. How much can you realistically make with Amazon FBA?
Let’s take an example of a seller selling 100-300 products a month. An average product sells for $25 with a profit margin of 25% and that adds up to $625 to $1,875 per month for a single $25 dollar product.
5. How can I lower my Amazon FBA fees?
Despite people are making thousands of dollars from Amazon FBA, there is still a need to lower the Amazon FBA fees. Here are some ways you can adapt to lower the fees
- Send particular items to fulfillment centers
- Monitor your inventory using the performance dashboard closely
- Sell items in bundles
Conclusion
Since its formation, Amazon has revolutionized the way of online retail business. And due to these methods, a lot of small scale businesses are selling their services using options like Amazon FBA. Amazon FBA is a tool that allows sellers to manage their inventory and customers. The option charges a fee known as Amazon FBA fees, and we have compiled a guide that will help you in understanding the fee.
We hope that this detailed guide about Amazon FBA fees will help you in starting your own business.
