Have you heard of the benefits and operation of Amazon FBA, also referred to as Fulfillment by Amazon? It's not a case of "too wonderful to be true."
A reliable approach to organizing your shipment, storage, and customer service is through Amazon FBA. You can work from any location and still ensure dependable, on-time delivery.
It's not free, though. In addition to the usual referral, refund, and selling fees, there are a lot of Amazon FBA fees to take into account.
But don't be discouraged by the trigger word "cost." Despite the additional expense, there's a strong chance Amazon FBA will still be profitable from a financial and work-life balance standpoint.
To help you understand where every dollar of your money is going, we've broken down each Amazon FBA cost below. To assist you in calculating your costs and expected ROI, we'll also provide you with an Amazon FBA calculator.
But first, is figuring out these fees for Amazon FBA worth it?
Why Market on Amazon FBA?
Although Amazon FBA may have additional charges, you receive a lot for your money. Here are some arguments in favor of doing so:
- Consumers have faith in Amazon to continue on the reputation theme. They are sure that they will receive their purchases when they do (in days, not weeks).
- Offer quick shipping: Modern consumers demand 2-day delivery. Anything more than that puts you out of date. Even your greatest rivals' expedited shipping can be matched with Amazon FBA.
- Consolidate Your Processes: Are you overworked or nervous about overseeing a warehouse, customer service agents, and shipping teams? Send everything to the one-stop shop for Amazon FBA.
- Give the Dirty Work to Others: Running a business is challenging enough without having to do all of the customer service, packaging, labeling, and shipping tasks by yourself. You need to focus on more important things; let someone else handle the details.
- Work (or Don't) On Your Schedule: Whether at the office or relaxing on a beach, when you work with Amazon FBA, your products will be processed, shipped, and returned on time.
7 Amazon FBA Fees
We'll look at the costs you anticipate paying now that you're excited about Amazon FBA. Remember that we are only going over a list of your Amazon FBA fees. General Amazon fees (such as per-item fees, referral fees, closure fees, etc.), manufacturing fees, website hosting fees, and more will still apply. The 7 Amazon FBA fees are as follows:
1. Amazon FBA Shipping Cost
The pick-and-pack fee is another name for the FBA fulfillment fee you can add when you use your Amazon FBA Calculator. Amazon charges a per-unit cost for finding, labeling, and shipping items to customers. The item's size, weight, and category all affect the charge. To find out how much per unit you will be charged for the fulfillment, look at Amazon's rate cards before you start computing using your Amazon FBA Calculator.
Consider your product kind first. Determine the size tier next. Do you need assistance determining what size package you have? Take a look at how Amazon chooses this product size tier. The shipment weight will then be used to calculate your per-unit cost.
2. Fees for Amazon FBA Storage
A monthly inventory storage cost is assessed by Amazon based on the size of your merchandise. Depending on your product type and the season, these fees change.
For instance, stocking up on merchandise right before the holiday season is frequently more expensive since Amazon has to have extra inventory (for all the other businesses) at that time.
But you're not required to hazard a guess at this figure on your Amazon fba calculator. For each month of the year, Amazon provides rate cards that can be used to calculate your FBA storage costs.
3. Long-Term Storage Fee for Amazon FBA
You must store your excess goods with Amazon FBA, especially if it is moving slowly. Any item in storage for more than 365 days is subject to a long-term storage fee from Amazon.
The age of your inventory is calculated by FBA using the first-in, first-out principle. Check Amazon's inventory health manager to see whether items have storage restrictions, as some products have shorter long-term storage fees.
4. Fee for Amazon FBA Disposal Orders
If an old product isn't selling and storage costs are mounting, you should eliminate it. Your products will be disposed of for you through FBA. However, there is a price involved. The size and shipping weight of your merchandise affect the cost, so be mindful when you add it to your Amazon FBA fee calculator.
5. Fee for Amazon FBA Removal Orders
Disposal and removal is different. If you want Amazon to give your inventory back to you, place an FBA removal order; if you want them to throw it away, place an FBA disposal order.
The cost of a removal order also varies based on the dimensions and weight of your goods. Disposal and removal orders have the same prices; it should be noted. However, if you ask for a removal order and dispose of it yourself (unless you're selling sticky notes), you'll have to pay a second landfill fee.
6. Unplanned Service Fee for Amazon FBA
Before packaging and labeling your products for transportation to fulfillment centers, Amazon has rigorous guidelines. If you make a mistake, you'll have to pay a charge per item for them to fix it. Delays in sales may also result from these errors.
7. Amazon FBA Processing Fee for Returns
Conveniently, Amazon FBA handles all exchanges and returns for your products. However, many product categories with FBA include free return shipping. While this encourages more people to test your products, it also increases the number of returns, which costs you money.
Any clothing and shoe category products will have a per-item returns processing fee. The cost of processing returns can be high. For instance, if your consumers return an item, you can spend $2 to $43 for each item.
Amazon FBA Fee Calculator
Your genuine profits should be your first concern if you are new to Amazon Marketplace or are considering it. It is more complex than purchasing something at one price and then selling it for another. Amazon is a factor. If you decide to participate in the FBA program, you must be fully aware of the fees and the commissions you must pay Amazon on each sale.
Refrain from using your smartphone to perform the calculations yourself. No problem. You are an entrepreneur; a mathematician is not required. You could do it yourself, but it would be wiser to utilize the Amazon FBA calculator and determine your selling price to guarantee that you make money on every sale. Use this Amazon FBA fee calculator today!
How to Use the Amazon FBA Fee Calculator?
The calculator is straightforward. Find the item you wish to sell on Amazon first. If the item is unavailable or has yet to be created, estimate the weight and size of the packing.
Afterward, enter the self-fulfillment information, including the item's cost, usual shipping expenses, storage charges, and product cost. The projected costs and ROI for fulfillment by you and fulfillment by Amazon will be processed by this Amazon FBA fee calculator. The two choices' comparative net profit and margins are visible.
However, don't let this result be what makes or breaks you. Remember the critical time you could save that the calculator needs to account for. For instance, selling through FBA can result in less profit per sale, but you might save countless hours of labor. You may use that time to manage your company and make plans.
Is Amazon FBA the Best Option for Your Company?
You get to decide that. It's up to you to calculate this once you've completed and calculated the prices.
Additionally, there is sometimes a good or wrong response. For some firms, Amazon FBA may be a no-brainer, but others would rather be in complete control of the shipping and delivery process.
Remember that using Amazon FBA is about more than just the statistics while making your decision. You should also consider other aspects, such as return frequency, branding, and customer service. Therefore, using Amazon FBA Calculator, you don’t need to worry about calculating everything on your own. Our Amazon FBA Fee Calculator is here every step of the way!