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In recent years the cost of goods sold by Amazon FBA sellers has also been rising For most sellers, the main costs that affect profitability are delivery fees, sales commissions, warehousing fees, advertising fees, and FBA fee Amazon generated by returns and refunds.
In this article, we will break down the top 4 cost factors that affect sellers’ profits, and introduce how to reduce FBA fee Amazon, so that the platform seller’s business profits are more controllable.
FBA fee Amazon
Strategy for reducing FBA fee Amazon strategy
Logistics costs
Amazon FBA logistics costs include two parts: product size class and transportation weight. The size class is determined by the shipping weight, which is calculated according to the larger data of unit weight or volume weight.
Sellers can use Amazon’s FBA Revenue Calculator to estimate logistics costs before sending their products to Amazon warehouses. This will help sellers avoid unexpected costs and help decide which products to sell on Amazon.
Here are some ways to reduce your Amazon delivery costs:
- Choose smaller, lighter packaging to reduce your shipping weight and lower shipping costs.
- Use Amazon’s FBA Lightweight Program to handle small, lightweight items at a lower logistics cost.
- Sellers can bundle products to reduce the number of units that need to be picked and packed
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FBA fee Amazon
Platform commissions
Amazon charges a commission on each item sold on its platform. The sales commission is a percentage of the sales price of the item and may vary by product category. For most categories, the sales commission is 15% of the sales price, with a minimum fee of $0.30 per item.
Sellers may choose to recommend niches with lower fees. Examples include home and kitchen products, toys and games, and office products, where the sales commission is only 15% of the sale price, and jewelry, where the sales commission is 20% of the sale price.
Here’s how to reduce FBA commissions:
- Choose products with lower commission rates.
- Sign up for Amazon’s Brand Commission Incentive Program.
Warehousing costs
As with logistics costs, warehousing costs are charged according to the volume of the product occupied in the Amazon operations center.
Reduce FBA warehousing fees as follows:
- Sellers only need to keep 60 to 90 days of inventory.
- Before incurring a stale inventory surcharge, sellers can use Amazon’s Remove Order service to remove slow-moving products from Amazon’s operations centers.
- Send promotional discounts to sell stale products.
FBA fee Amazon
Advertising Costs
Reduce Amazon advertising costs by doing the following:
- Set a target ACoS and regularly adjust underperforming campaigns.
- Set advertising budget and track ROI.
- Remove poorly performing keywords.
- Research free marketing strategies such as social media marketing.
Refine product listings to help increase conversions.
If you want to know more about it, click on Amazon Seller Center.
Selling on Amazon and finding a reliable Amazon FBA freight forwarder is a big step towards success.
