It costs a lot to use (FBA) Fulfillment by Amazon. Given these hefty costs, you might be considering if FBA is worthwhile, whether you'd be better off completing your own Amazon purchases, or even whether you should use a different marketplace entirely.
Focusing on your profits, rather than the fees you are paying, should be your top priority when deciding whether or not to use FBA.
Maximizing profits, not cutting costs, is your aim as a seller. Although that's not always the case, cutting costs is beneficial when it increases profits.
Take into account the fact that the easiest approach to reduce fees is to sell anything on Facebook Marketplace and Craigslist. Almost never will you be charged any fees on these platforms. On the other hand, you'll have to spend a lot more time and money on each item's fulfillment, which will severely limit your sales.
This article will assist you in determining whether FBA is worthwhile for your company's needs and will direct you to tools that will enable you to reduce your out-of-pocket expenses.
Does Amazon FBA Selling Pay Off?
What you are selling and who you are selling it to will determine whether or not using FBA is worthwhile.
Because adopting FBA directly increases both sales and earnings, we've discovered in my company that it more than compensates the price.
Simply put, we profit more when we use FBA.
Additionally, it saves us time versus performing all of the fulfillment ourselves.
It saves a ton of time to be able to ship everything at once and then have FBA handle individual orders. You will appreciate this perk if you reach the stage when you are selling hundreds of goods each month.
However, it does not imply that we only use FBA. Sometimes we decide to "merchant fulfill" rather than use Amazon's fulfillment services, notably in Q4. In some cases, we might decide to sell instead on eBay or another marketplace.
However, FBA is the primary method we use to sell most of our goods.
As a refresher, here are some reasons why we think selling on FBA is worthwhile:
1.) Even though we pay higher fees with FBA, we often make more money in the long run because of the increased sales.
2.) We get great time savings via FBA.
Saving time can result in increased profits, which is another issue to think about. It is possible to use the time saved on order fulfillment to buy more merchandise.
Do you need to use FBA?
In my line of work, the crucial statistic that we focus on is the difference between the price we receive for a product when we sell it and the price it actually cost us. We don't mind paying the Amazon fees as long as we can get the profit and return on investment we're after.
Paying a charge to gain access to Amazon's enormous consumer base is a fine idea as long as you have the figures worked out in advance and are confident you will still make money once the fees are paid.
Start with this overview of all the costs related to selling on Amazon if you are unfamiliar with them or need assistance understanding how to calculate them.
Reducing FBA Fees: How to Do It
You may cut the cost of using Fulfillment by Amazon by a number of means.
Following are the top three:
If you sell more than 40 things each month, make sure you're on the Professional seller plan.
Decrease the cost of storage.
Your shipments to FBA facilities should be optimized.
Although a Professional seller account costs $39.99 per month, it does not have the $0.99 per item price that an Individual account does.
However, for the majority of users, the Professional account is well worth the cost because it opens the buy box, which can save you money if you sell more than 40 goods each month, and it saves you money on other transactions. The comparison between Professional and Individual accounts is shown here in full.
What products should you sell on FBA?
For the most part, we advise you to attempt selling anything you find that:
The option to buy is available.
Selling is acceptable.
Brings in a healthy profit margin.
Routinely sells.
For more help understanding any of the above, contact us and let's talk about growing your business on Amazon.
Comments