Amazon FBA tips

Is Amazon FBA Right for Your Business?

This post has been updated in November 2017 to contain more up-to-date and accurate information.

If you are selling products online, you may be doing so with a marketplace like Amazon, which can be a profitable enterprise for online sellers. As your business increases, you may have considered using Fulfillment By Amazon (FBA) to streamline your selling and appeal to more customers. But how do you know if Amazon FBA is right for your ecommerce business? We’ve answered some questions to help you decide if Amazon FBA is right for you.

When Does Using FBA Makes Sense?

If you are already using Amazon and you are averaging over 40 products sold each month, then you should consider FBA for the following reasons:

  • Amazon FBA is a better value than other fulfillment services.
  • Customers that meet a certain minimum order amount are offered free shipping by Amazon FBA. This encourages customers to make additional purchases.
  • FBA offers your Amazon Prime customers free 2-day shipping on your products.
  • Customers trust Amazon’s brand, so knowing that Amazon is fulfilling their order instills confidence.

Note: You don’t have to list your products on Amazon to use FBA’s infrastructure, but you probably should. Amazon likes to “keep it in the family.” What I mean by that is the best FBA advantages are for those selling on Amazon. Before you decide to use these Amazon FBA tips for fulfillment for other sales channels, shop other fulfillment companies to see what is best for your budget.

How Does FBA Work?

Basically, there are two ways that your online business can use Amazon for your customers’ order fulfillment:

  1. Fulfillment by Amazon: This is offered to online businesses that are already using the Amazon marketplace to sell their products. In other words, the customer shopped and found the item on the Amazon marketplace.
  2. Multi-Channel Fulfillment: As mentioned before, this is offered to online businesses that sell their products through another online marketplace, like eBay or Etsy, or through their own online store. This means that the customer did not find the product on Amazon, but the order will be fulfilled by Amazon.

Where your products are listed will make a significant impact on the cost of using Amazon for order fulfillment.

FBA vs. Multi-Channel Fulfillment

In 2017, Amazon changed the fees for FBA and Mult-Channel fulfillment. For example, they have  consolidated the Order Handling, Pick & Pack, and Weight Handling fees into a single, per-unit Fulfillment Fee for both FBA and Multi-Channel Fulfillment. Take a look at the new fees for each to help decide which method of fulfillment is right for you.

The following is how the fees are broken down for FBA (per unit total):

 

Standard Non-Media

Small standard-size (1 lb. or less)

Large standard-size (1 lb. or less)

Large standard-size (1 to 2 lbs.)

Large standard-size (over 2 lbs.)

January-September

$2.41

$2.99

$4.18

$4.18 + $0.39/lb. above the first 2 lbs.

October-December

$2.39

$2.88

$3.96

$3.96 + $0.35/lb. above the first 2 lbs.

 

Standard-Size Media

 

Small standard-size (1 lb. or less)

Large standard-size (1 lb. or less)

Large standard-size (1 to 2 lbs.)

Large standard-size (over 2 lbs.)

January-September

$2.41

$2.99

$4.18

$4.18 + $0.39/lb. above the first 2 lbs.

October-December

$2.39

$2.88

$3.96

$3.96 + $0.35/lb. above the first 2 lbs.

 

Oversize

 Small standard-size (1 lb. or less)Large standard-size (1 lb. or less)Large standard-size (1 to 2 lbs.)Large standard-size (over 2 lbs.)
January-September$6.85 + $0.39/lb. above the first 2 lb.$9.20 + $0.39/lb. above the first 2 lb.$75.06 + $0.80/lb. above the first 90 lb.$138.08 + $0.92/lb. above the first 90 lb.
October-December$6.69 + $0.35/lb. above the first 2 lb.$8.73 + $0.35/lb. above the first 2 lb.$69.50 + $0.76/lb. above the first 90 lb.$131.44 + $0.88/lb. above the first 90 lb.

Monthly Inventory Storage Fees

Standard-Size

Oversize

January-September

$0.64 per cubic foot

$0.43 per cubic foot

October-December

$2.35 per cubic foot

$1.15 per cubic foot

The following is how the fees are broken down for Multi-Channel Fulfillment:

Standard-Size Products (per unit)

Standard Shipping (3-5 business days)

Size1 Unit Order2 Unit Order3 Unit Order4 Unit Order5 Unit Order
Small Standard-Size: 1 lb. or less$5.85$3.75$3.35$3.25$2.20
Large Standard-Size: 1 lb. or less$5.90$3.90$3.40$3.30$2.80
Large Standard-Size: 1 to 2 lb.$5.95$3.95$3.45$3.35$2.95
Large Standard-Size: Over 2 lb.$5.95 + $0.39/lb. above first 2 lb.$3.95 + $0.39/lb. above first 2 lb.$3.45 + $0.39/lb. above first 2 lb.$3.35 + $0.39/lb. above first 2 lb.$2.95 + $0.39/lb. above first 2 lb.

 

Expedited Shipping (2 business days)

Size1 Unit Order2 Unit Order3 Unit Order4 Unit Order5 Unit Order
Small Standard-Size: 1 lb. or less$7.90$4.65$3.55$3.40$2.41
Large Standard-Size: 1 lb. or less$8.30$4.80$3.80$3.55$2.99
Large Standard-Size: 1 to 2 lb.$8.35$5.35$5.15$4.95$4.18
Large Standard-Size: Over 2 lb.$8.35 + $0.39/lb. above first 2 lb.$5.35 + $0.39/lb. above first 2 lb.$5.15 + $0.39/lb. above first 2 lb.$4.95 + $0.39/lb. above first 2 lb.$4.18 + $0.39/lb. above first 2 lb.

 

Priority Shipping (next day)

Size1 Unit Order2 Unit Order3 Unit Order4 Unit Order5 Unit Order
Small Standard-Size: 1 lb. or less$12.80$7.30$6.30$5.80$4.30
Large Standard-Size: 1 lb. or less$13.80$7.80$6.80$5.90$4.80
Large Standard-Size: 1 to 2 lb.$13.85$7.85$6.85$5.95$4.85
Large Standard-Size: Over 2 lb.$13.85 + $0.39/lb. above first 2 lb.$7.85 + $0.39/lb. above first 2 lb.$6.85 + $0.39/lb. above first 2 lb.$5.95 + $0.39/lb. above first 2 lb.$4.85 + $0.39/lb. above first 2 lb.

Oversize Products (per unit)

Standard Shipping (3-5 business days)

Size1 Unit Order2 Unit Order3 Unit Order4 Unit Order5 Unit Order
Small Oversize$12.30 + $0.39/lb. above first 2 lb.$6.80 + $0.39/lb. above first 2 lb.$5.80 + $0.39/lb. above first 2 lb.$4.80 + $0.39/lb. above first 2 lb.$3.80 + $0.39/lb. above first 2 lb.
Medium Oversize$15.30 + $0.39/lb. above first 2 lb.
Large Oversize$143.30 + $0.92/lb. above first 90 lb.
Special Oversize$143.30 + $0.92/lb. above first 90 lb.

 

Expedited Shipping (2 days)

Size1 Unit Order2 Unit Order3 Unit Order4 Unit Order5 Unit Order
Small Oversize$13.30 + $0.39/lb. above first 2 lb.$7.80 + $0.39/lb. above first 2 lb.$7.30 + $0.39/lb. above first 2 lb.$7.15 + $0.39/lb. above first 2 lb.$6.85 + $0.39/lb. above first 2 lb.
Medium Oversize$16.80 + $0.39/lb. above first 2 lb.
Large Oversize$78.30 + $0.80/lb. above first 90 lb.
Special Oversize$143.30 + $0.92/lb. above first 90 lb.

 

Priority Shipping (next day)

Size1 Unit Order2 Unit Order3 Unit Order4 Unit Order5 Unit Order
Small Oversize$20.80 + $0.39/lb. above first 2 lb.$11.30 + $0.39/lb. above first 2 lb.$8.20 + $0.39/lb. above first 2 lb.$7.70 + $0.39/lb. above first 2 lb.$7.30 + $0.39/lb. above first 2 lb.
Medium Oversize$31.30 + $0.39/lb. above first 2 lb.
Large Oversize$78.30 + $0.80/lb. above first 90 lb.
Special Oversize$143.30 + $0.92/lb. above first 90 lb.

For more information on fulfillment fees and the recent changes, visit Amazon’s site.

What Are the Benefits of Using FBA?

When you list your products on Amazon, you are making them visible to a huge market. At the end of 2015, Amazon boasted 304 million customers globally – 54 million of which subscribe to Amazon Prime in the U.S.

When you use FBA, your Amazon Prime customers are eligible for free shipping, which is a deal-maker for many customers.

On your product page, your store is listed as the seller and Amazon is listed for order fulfillment – and customers like that. Building a brand is difficult, especially for dropshippers selling on Amazon, but the added trust factor of FBA is a nice boost.

Using FBA allows you to make more sales and lower the cost of order fulfillment.

Is FBA Right for You?

The bottom line is, by using Amazon FBA you are leveraging Amazon’s recognized and trusted brand to increase your visibility and sales on Amazon. FBA’s fulfillment costs are competitive and it will save you valuable time. If you are already selling on Amazon, but not using FBA, it’s likely that you are missing out on sales by following these Amazon FBA tips.

Thinking about using Amazon FBA, but worried about managing your Amazon FBA inventory? We can help you do that.

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About the Author

Jami

Jami is a blogger for ecomdash. She is an advocate for mental health awareness and addiction recovery, drinks her weight in caffeine every day, and has a deep affection for fine-point pens.

 

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