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Listen "Increase Profits by Minimizing These 6 Amazon Selling Fees"
Episode Synopsis
This post was written by our friends at PingPong for the TurnKey Success Blog
If you sell on Amazon, it can sometimes feel like there’s a different fee hiding around every corner. But what are sellers really paying for and why? Is it possible to pay less in fees and make more money on Amazon? Yes, it’s possible! The first step is knowing what you’re being charged for and what to do instead.
In this post, we’ll cover 6 types of fees Amazon sellers run into, and how to keep those fees from cutting into your profits. From FBA fees to high currency exchange rates, we’ll take a look at a few of the costlier Amazon fees and strategic ways to lower them, so you can increase profits.
Amazon Fee #1: Fulfillment Fees
When you have items stored in an Amazon FBA warehouse, they need to be moved around when someone orders from you. Sometimes by robots, sometimes by humans. The items also need to be packaged and sent on their way. Amazon’s fulfillment fees pay for these services.
Amazon FBA fees are charged per unit of product and based on two factors:
The size of your packaged product (dimensions on each side)
The weight of your packaged product
Based on these two qualities, a product falls into a pre-determined bracket and gets charged accordingly.
Here, we can see an example of a dry erase board and how the fees are calculated:
How to Lower Your Amazon Fulfillment Fees
It might seem like there’s not much you can do about it, and there’s no point in dwelling on it since Amazon charges according to product size and weight.
But if you pay close attention, you may be able to make a slight change that puts you into a lower bracket. For example, you can try making your packaging more compact or adjust your product to make it weigh less.
Obviously, it’s not always an option, but it’s worth examining your products for smart opportunities to reduce their size and weight (and increase your profit margins).
Amazon Fee #2: Multi-Channel Fulfillment Fees
Multi-Channel Fulfillment by Amazon is a service that’s not limited only to orders from the Amazon platform itself. Amazon allows you to use its system to fulfill orders that are sold on other platforms or your own website.
The fees Amazon charges are calculated by unit, which is placed in one of the predetermined fee brackets. They’re based on the product’s weight and size, plus speed of delivery. There are three options:
Priority shipping (next day)
Expedited shipping (2 day)
Standard shipping (3-5 days)
How to Lower Your Amazon Multi-Channel Fulfillment Fees
Again, a way you can save money here is by studying your brackets to see if it’s possible to reduce the weight and or size of a single product unit.
You may also choose to have your products delivered via a longer delivery period. This is a tradeoff, obviously, however, note that your can pick and choose delivery times on a product-by-product basis to maximize profits.
Amazon Fee #3 - Amazon Storage Fees
When you have inventory in an FBA warehouse, you’re essentially paying rent to store your items with Amazon. Unlike the previous fees that are paid on a per unit basis, here you’re charged by the cubic foot of space your inventory takes up.
Exactly how much you pay in Amazon storage fees depends on three factors:
The amount of cubic space taken up by your inventory
The time of the year
How long the product has been housed in the warehouse
How to Lower Your Amazon Storage Fees
Amazon increases the storage fees during the 4th quarter or the last three months of the year. Not surprisingly, this is due to increased holiday shopping. If your product is seasonal and know you won’t sell many items during the winter, you can avoid higher storage costs during the holidays by having a summer blowout. You can also potentially save money by adjusting your packaging to make your products more compact.
Amazon Fee #4 - Amazon Referral Fees
These are the fees Amazon charges you for successfully sel...
If you sell on Amazon, it can sometimes feel like there’s a different fee hiding around every corner. But what are sellers really paying for and why? Is it possible to pay less in fees and make more money on Amazon? Yes, it’s possible! The first step is knowing what you’re being charged for and what to do instead.
In this post, we’ll cover 6 types of fees Amazon sellers run into, and how to keep those fees from cutting into your profits. From FBA fees to high currency exchange rates, we’ll take a look at a few of the costlier Amazon fees and strategic ways to lower them, so you can increase profits.
Amazon Fee #1: Fulfillment Fees
When you have items stored in an Amazon FBA warehouse, they need to be moved around when someone orders from you. Sometimes by robots, sometimes by humans. The items also need to be packaged and sent on their way. Amazon’s fulfillment fees pay for these services.
Amazon FBA fees are charged per unit of product and based on two factors:
The size of your packaged product (dimensions on each side)
The weight of your packaged product
Based on these two qualities, a product falls into a pre-determined bracket and gets charged accordingly.
Here, we can see an example of a dry erase board and how the fees are calculated:
How to Lower Your Amazon Fulfillment Fees
It might seem like there’s not much you can do about it, and there’s no point in dwelling on it since Amazon charges according to product size and weight.
But if you pay close attention, you may be able to make a slight change that puts you into a lower bracket. For example, you can try making your packaging more compact or adjust your product to make it weigh less.
Obviously, it’s not always an option, but it’s worth examining your products for smart opportunities to reduce their size and weight (and increase your profit margins).
Amazon Fee #2: Multi-Channel Fulfillment Fees
Multi-Channel Fulfillment by Amazon is a service that’s not limited only to orders from the Amazon platform itself. Amazon allows you to use its system to fulfill orders that are sold on other platforms or your own website.
The fees Amazon charges are calculated by unit, which is placed in one of the predetermined fee brackets. They’re based on the product’s weight and size, plus speed of delivery. There are three options:
Priority shipping (next day)
Expedited shipping (2 day)
Standard shipping (3-5 days)
How to Lower Your Amazon Multi-Channel Fulfillment Fees
Again, a way you can save money here is by studying your brackets to see if it’s possible to reduce the weight and or size of a single product unit.
You may also choose to have your products delivered via a longer delivery period. This is a tradeoff, obviously, however, note that your can pick and choose delivery times on a product-by-product basis to maximize profits.
Amazon Fee #3 - Amazon Storage Fees
When you have inventory in an FBA warehouse, you’re essentially paying rent to store your items with Amazon. Unlike the previous fees that are paid on a per unit basis, here you’re charged by the cubic foot of space your inventory takes up.
Exactly how much you pay in Amazon storage fees depends on three factors:
The amount of cubic space taken up by your inventory
The time of the year
How long the product has been housed in the warehouse
How to Lower Your Amazon Storage Fees
Amazon increases the storage fees during the 4th quarter or the last three months of the year. Not surprisingly, this is due to increased holiday shopping. If your product is seasonal and know you won’t sell many items during the winter, you can avoid higher storage costs during the holidays by having a summer blowout. You can also potentially save money by adjusting your packaging to make your products more compact.
Amazon Fee #4 - Amazon Referral Fees
These are the fees Amazon charges you for successfully sel...
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