FBA - what does the customer pay?
We're investigating moving to FBA from our current self-fufillment. I have found the Revenue Calculator which is very helpful, but I am still a little confused.
Our product is $17 and we charge $6 shipping currently. So the customer pays $23, we pay our fulfillment provider the $6, Amazon take some fees, and we're left with about $13.50.
For the FBA scenario, it doesn't appear to show what the customer pays for shipping, is it free for the customer? It says for a $17 product the fulfillment fee is $4.16 and the Amazon fee is $2.55, leaving us with only $10.30, more than $3 less than our self-fulfillment scenario.
This makes it seem like continuing self-fulfilling will be much more profitable for us since our customers cover the $6 shipping fee, rather than Amazon charging the $4.16 fulfillment fee out of our $17 product price.
Have I missed something here?
FBA - what does the customer pay?
We're investigating moving to FBA from our current self-fufillment. I have found the Revenue Calculator which is very helpful, but I am still a little confused.
Our product is $17 and we charge $6 shipping currently. So the customer pays $23, we pay our fulfillment provider the $6, Amazon take some fees, and we're left with about $13.50.
For the FBA scenario, it doesn't appear to show what the customer pays for shipping, is it free for the customer? It says for a $17 product the fulfillment fee is $4.16 and the Amazon fee is $2.55, leaving us with only $10.30, more than $3 less than our self-fulfillment scenario.
This makes it seem like continuing self-fulfilling will be much more profitable for us since our customers cover the $6 shipping fee, rather than Amazon charging the $4.16 fulfillment fee out of our $17 product price.
Have I missed something here?
24 Antworten
Seller_WAZNnMBpd99sI
Normally, the buyer pays nothing for shipping.
Prime customers.
unless noted that Amazon is charging (sometimes they require a minimum of $35 or so in purchases in order for a buyer to receive free shipping).
In any case, that has nothing to do with you. You get no revenue from what Amazon collects in shipping charges.
Raise your price to cover what Amazon is charging you (normally 15% plus the "FBA" fee- which is their charge to you for shipping and handling)
Don't forget to add the cost of you shipping it to Amazon in the first place to your costs.
You've missed nothing.
It will cost you more to ship via FBA, all things considered.
*However, you may sell 2,3 or 10 times as much product, totally dependent upon popularity (overall sales from all buyers) of your product and how your competition reacts!!
Topher_Amazon
Thanks for the reply to OP, Wallaby!
@Seller_FSCHzhFimT5wb additionally I strongly recommend viewing the How Fulfillment by Amazon (FBA) works Seller University module (and series, thereafter) which explains both an overview and portion on FBA fees (3:16). Also, the FBA fees help page should be pertinent to your questions here.
If you have further questions please feel free to add them below and the community and myself will do our best to answer or point you to the correct resources!
Topher
Seller_y7K2usRrDUAe8
Prime-eligible items (i.e. FBA items) are free shipping so customers pay $0 - Essentially your Amazon referral and processing Fee is paying for the shipping.
If you want to keep your profit the same, you need to increase your item cost beyond $23. The reason is that a portion of Amazon's fee is calculated off item cost. So in order for you to keep the same $13.50 profit, you need to increase your product price beyond $23.
Seller_rm9a2zdejXhO9
You need to calculate, returns, and damaged return goods, warehouse fees. IMO I would stick with what you are doing.
Seller_6bsxKLlsfgTmU
Your products will get damaged, returns will increase, and the fees will be extreme. Stay away from FBA.
Seller_Qbd0RsfZFEZBY
With FBA there is no financial benefit for add-on purchases or multiple unit orders as the FBA fees are applied per item, not per order. Just an FYI
Seller_v2bkIPsWJQHOn
to make it simple, forget about $17 and $6.
your customers pay $23, this is the price of the product.
so, when selling FBA, you sell it at $23.
Seller_LaXfWb19u77C5
Per order, the customer pays nothing for shipping. This is for prime customers and customers who spend $35+ per order to earn "free" shipping. Prime customers, pay for the Prime membership which gives them "free" shipping throughout the time they purchase prime for - could be a monthly or yearly plan.
Seller_aUbEyzlSSnsDJ
Your sell price should include shipping. You charge 23.00. I would not do FBA to many unknowns and amazon changes with the wind.
We are FBM and built our own warehouse.
Seller_BeWo5Xt3t43rn
If they do not have PRIME and do not purchase the $35 worth of products to get free shipping w/o Prime then they pay amazon (not you) $5.99 or more depending on item for shipping.
