2022 Fulfillment by Amazon Review: Costs, Features
Without a doubt, Amazon is currently one of the largest eCommerce platforms that are growing by leaps and bounds with each passing day. Each day, Amazon comes up with new features and programs for the convenience of both the sellers and its customers.
Speaking of ease and convenience, the Amazon FBA program is currently the talk of the town for all the right reasons. If you are new to the whole FBA business and amazon seller aggregatorsconcept, then this is the right place for you today.
Today we are going to talk about FBA in detail so that you know if it’s the right thing for you to opt for as a seller.
What Is Amazon FBA?
Amazon FBA, also known as Fulfillment By Amazon, is basically a service that helps third-party sellers automate their entire shipping and order fulfillment services. In simpler words, the sellers sell but Amazon ships, and that’s what Amazon FBA is all about.
When you enroll yourself for Amazon FBA, you can then rest assured regarding all the shipping, returns and refunds, warehousing, and even picking and packing. You just have to list your products on Amazon as a seller, and then when someone places an order, you then leave everything else on Amazon.
What happens here is that sellers send their products to Amazon, and Amazon then warehouses them. Upon receiving an order, Amazon processes it and delivers it to your customer.
Of course, FBA isn’t a free program, and you have to pay a specific fee to Amazon to use their service. However, if you consider all the benefits of Amazon FBA, you sure wouldn’t mind paying the fee. It’s just that FBA isn’t really for all sellers out there. Especially if you are selling low-valued items or products with large dimensions, you shouldn’t really opt for it.
When Should You Use FBA?
As per data, around 68% of Amazon sellers are currently using FBA, and then there are an additional 21% of sellers who are using this service combined with other fulfillment methods.
Now the thing about Amazon FBA is that it's not really a guaranteed solution for all the sellers out there. So we recommend FBA for;
Small Businesses: There’s no doubt in the fact that small or young businesses, even with a ecommerce accelerator, often struggle with logistics, and they don’t really have logistics in place. This is where Amazon FBA comes into action. For a small business, Amazon FBA is no less than a blessing because it really helps with everything, including warehousing, packing, and shipping.
If You Are Planning To Expand Your Store Online: If you are currently running a brick-and-mortar store, then, of course, Amazon FBA will work wonders for you. The reason is that with this program, you can create your own eCommerce space without worrying about massive investments or any such hassle. You can worry about your retail sales and work on your store while Amazon helps you grow 0nline and handles your online sales.
Lightweight And Small Products: Amazon FBA is just the right service for you if you are selling small and lightweight products. The best part here is that you don’t have to worry about paying a huge fee to Amazon here. If your products are easily manageable, Amazon won’t charge you much.
Amazon Sellers: Of course
The Cost Of FBA
For sellers who are new to Amazon FBA, the cost is really one of the biggest concerns. Now what you must know is that the FBA’s pricing structure is a little complex and difficult to understand. But to avoid any surprise charges, it’s important that you first understand the costs involved.
The Seller’s Fee
If you want to sell on Amazon, you’ll have to pay a fee of $39.99 per month, or you can simply give Amazon 99 cents per item sold. It really does depend on you and what’s more convenient for you.
The Fulfillment Fee
You’ll be charged by FBA to pick an order from the storage location, pack it and then ship it to your customer. The fee here starts from around $3.07 per unit, and it can go anywhere up to $2000 in case of special and huge deliveries. There are several factors that you have to consider here;
- Sales channel
- Shipping Speed
Stock Removal Fee
If you want to pull your inventory or remove any unsold stock from Amazon, you’ll have to pay a fee for it. The fee here is nominal, like $0.52 to $7.25+ but it really depends on the weight and the size of your items.
Amazon is quite serious when it comes to its labeling specifications. If your FBA items aren’t labeled properly, you’ll be charged a fee of 55 cents per unit.
The main fee that sellers have to pay for Amazon FBA is the storage fee. Amazon charges 53 cents per cubic foot to $2.40 per cubic foot to store your items in the FBA warehouse. During the months of October and December, the fee increases by 200%, and it’s never the same, so you have to keep yourself updated regarding the fluctuating costs.
Long Term Storage Fee
The long-term storage fee is one big turn-off for sellers. If your inventory stays in the FBA warehouse for more than 270 days, you’ll have to pay a long-term storage fee. An additional $1.50 per cubic foot is charged if your inventory is there between 271 and 365, and if it’s beyond 365 days, then, of course, you’ll have to pay more like $6.90 per cubic foot.
Now that you know what Amazon FBA is and how it works, it’ll be easier for you to decide whether you should enroll in it or not. Overall, it’s one great service by Amazon, and if you have the right products to sell through FBA, you sure will get a lot of benefits out of it.