Trying to understand FBA Costs
I am currently doing FBM. I am selling an item that sells for $9.99 on Amazon. I probably average about $6.5 per shipment depending on where the customer lives no including packaging. Amazon fees are $1.79.
I'd like to get the buy box, so I'm considering switching to FBA. Using their calculator, it says that fulfillment costs $4.98. Add in Amazon fees ($1.79) and storage cost ($0.04) and that's about $6.81.
So it looks like FBA will be roughly the same as FBM with the added perk of the prime badge and hopefully the buy box. But $6.81 really isn't the actually cost of doing FBA, right? Like I have to pay for shipping from my warehouse to Amazon.
So in reality, maybe FBA isn't really that great of a deal? I never really see people talking about this part. People usually just talk about how FBA handles all the shipping cost for you, but that's not really true since you still have to calculate in shipping to the fulfillment warehouse. Not sure if I'm missing something here.
Trying to understand FBA Costs
I am currently doing FBM. I am selling an item that sells for $9.99 on Amazon. I probably average about $6.5 per shipment depending on where the customer lives no including packaging. Amazon fees are $1.79.
I'd like to get the buy box, so I'm considering switching to FBA. Using their calculator, it says that fulfillment costs $4.98. Add in Amazon fees ($1.79) and storage cost ($0.04) and that's about $6.81.
So it looks like FBA will be roughly the same as FBM with the added perk of the prime badge and hopefully the buy box. But $6.81 really isn't the actually cost of doing FBA, right? Like I have to pay for shipping from my warehouse to Amazon.
So in reality, maybe FBA isn't really that great of a deal? I never really see people talking about this part. People usually just talk about how FBA handles all the shipping cost for you, but that's not really true since you still have to calculate in shipping to the fulfillment warehouse. Not sure if I'm missing something here.
7 replies
Seller_UnbaYArIZoItV
Sorry, so using FBM, my cost would be $6.50 + $1.79 + $1 for packaging. Total is $9.29. So FBA is definitely cheaper at $6.81. However, my question still is, don't I also need to calculate in the cost of shipping to the Amazon warehouse?
Seller_z3XfkorVSmnEY
Yes, you need to add shipping your product to Amazon's warehouse. We're paying between $0.25-$0.35 per pound + the inventory placement fee starting at about $0.20/unit. You can always create an FBA SKU, create an inbound shipment and see what the costs would be. You're not obligated to ship until you accept the shipping and placement fees.
Other things to consider with FBA -- typically higher return rate, lost inventory, long term storage fees, etc.
You can always keep your FBM listing at $10 and send some to FBA and offer them at a higher price. Then you can see if it makes sense for you to FBA.
Dominic_Amazon
Hi @Seller_UnbaYArIZoItV,
Dominic from Amazon here, some of your fellow Sellers have given you some good feedback. FBA has to make sense for your business and it may depend on the product itself. Some are better fits for FBM, such as large bulky items. Please let me know if you have any questions!
Best,
Dominic
