So, you’ve just set up a Professional Seller Account on Amazon, paid £25 for the first month and entered the world of e-commerce with your head held high. You have even allowed some amount of money for referral fees which, by the way, can go up to 45% per item. There’s no denying that you’ve done a great job. But if you think that nothing else can take a massive chunk out of your profits, you can’t be more wrong. Amazon FBA fulfilment fees are something that can get you out of the running.
Although there are no subscription charges and minimum item requirements, Amazon’s fulfilment services are still pricey. If overlooked, these expenses can destroy your budget and lead to business stagnation. Continue reading to realise what exactly you should budget for.
Amazon FBA pricing: Fulfilment and storage
When you start a business, be it a brick-and-mortar facility or an online store, one of the weightiest things to do is to carry out a cost-volume-profit analysis. It is intended to help you scrutinise your potential revenues and determine your break-even point.
To perform an in-depth CVP analysis for your Amazon business, you’re better off having a list of your total expenses at hand, including FBA fulfilment fees. Here’s what you need to calculate:F
- Fulfilment. Every e-tailer can turn to FBA if they want Amazon to pack and ship their products. For those who run their businesses in the UK, these services will cost (as of June 2019) from £0.60 to £4.80 per a standard-sized item, depending on its exact size and weight. When it comes to oversized products, Amazon fulfilment charges start from £3.82 to £11.27 per item.
- Storage. What merchants often overlook when calculating Amazon FBA costs for their inventory is a fee for the space they use within a fulfilment centre. Yes, Amazon charges for its storage space separately. The monthly fee varies from low to high season and can be as much as £0.91 per cubic feet unless your products are bags, clothing or shoes which are the only categories of goods eligible for lower fees.
For example, if you sell paintings that are 0.5kg in weight and qualify for Standard Parcel dimensions, getting them fulfilled by Amazon will cost you £2.14/item + storage fees + additional services (labelling, bubble-wrap packaging, etc.). If your inventory turnover is over 100 items per month, it will be a great deal of money, no matter how you slice it.
Your most cost-effective fulfilment solution
As FBA pricing turns out to be quite exorbitant, you may think that fulfilling your inventory on your own is the best alternative. However, inadequately packaged and unprofessionally shipped orders all too often lead to Amazon penalties and lost customers, which may cost you even more.
To make sure your company’s reputation is maintained at the highest level, you can leave everything from preparation to fulfilment to Minatus. Our services include product inspection, order management, delivery, returns handling and much more. So, why not contact us and let experienced specialists provide fulfilment for you without those unreasonably high Amazon FBA shipping rates?