Update to Amazon US referral and FBA fees: Effective June 1, 2021


#98

takes real brain power to say no to a system that works for you so you and your team can scale your business much faster.


#99

Hmmm. Let’s set the hyperbole aside and look at numbers. Math is very clear and truthful. An item that sells for $12.95 and weighs 8 oz with dimensions of 4x4x5.

Amazon fees today:
FBA Pick & Pack Fee: $3.31
Referral Fee on Item Price: $1.94
Shipping to FBA by the case (Packaging Materials & Shipping): $0.32

Amazon fees based on new costs:
FBA Pick & Pack Fee: $3.64
Referral Fee on Item Price: $1.94
Shipping to FBA by the case (Packaging Materials & Shipping): $0.32

My Cost to ship the same item to PR right now today (assuming Ebay or Etsy or Walmart order):
USPS Flat Rate Ground: $3.69
Ebay/Paypal Fees: $1.94
Box & Paper Tape: $0.33
Thermal Label & Receipt: $0.03
Labor Cost: $0.30 to $0.55 (based on $15/hr [loaded with taxes & benefits] - 40 items per hour)

Other shipping costs:
Across the street: $3.46
CA $3.85
TX: $3.69
NY $3.49

Please explain to me how Amazon costs more using the above math. My cost to ship items to customers is actually less.

Personally, I do think that the cost of selling on Amazon is higher than other Marketplaces. But it is not because of the referral / pick & pack fees. The added cost is storage fees, returns, and shrinkage due to all the customer funny business. Based on shipping costs alone, Amazon FBA is not expensive. Perhaps large bulky items significantly alter the math.

My storage fees are low because I sell smaller items. I manage my inventory well (I think) so my storage fees as a percentage of sales is a fraction of 1%. In my business, FBA gets items to customer quicker. It also takes pressure off our shipping department. When Amazon is running well, I have more time to concentrate on growing my business.

Please show me with math how FBA is costing you more.


#100

Beautifully said![quote=“DirDes, post:99, topic:806848, full:true”]

Hmmm. Let’s set the hyperbole aside and look at numbers. Math is very clear and truthful. An item that sells for $12.95 and weighs 8 oz with dimensions of 4x4x5.

Amazon fees today:
FBA Pick & Pack Fee: $3.31
Referral Fee on Item Price: $1.94
Shipping to FBA by the case (Packaging Materials & Shipping): $0.32

Amazon fees based on new costs:
FBA Pick & Pack Fee: $3.64
Referral Fee on Item Price: $1.94
Shipping to FBA by the case (Packaging Materials & Shipping): $0.32

My Cost to ship the same item to PR right now today (assuming Ebay or Etsy or Walmart order):
USPS Flat Rate Ground: $3.69
Ebay/Paypal Fees: $1.94
Box & Paper Tape: $0.33
Thermal Label & Receipt: $0.03
Labor Cost: $0.30 to $0.55 (based on $15/hr [loaded with taxes & benefits] - 40 items per hour)

Other shipping costs:
Across the street: $3.46
CA $3.85
TX: $3.69
NY $3.49

Please explain to me how Amazon costs more using the above math. My cost to ship items to customers is actually less.

Personally, I do think that the cost of selling on Amazon is higher than other Marketplaces. But it is not because of the referral / pick & pack fees. The added cost is storage fees, returns, and shrinkage due to all the customer funny business. Based on shipping costs alone, Amazon FBA is not expensive. Perhaps large bulky items significantly alter the math.

My storage fees are low because I sell smaller items. I manage my inventory well (I think) so my storage fees as a percentage of sales is a fraction of 1%. In my business, FBA gets items to customer quicker. It also takes pressure off our shipping department. When Amazon is running well, I have more time to concentrate on growing my business.

Please show me with math how FBA is costing you more.
[/quote]


#101

Are these fees based on ship in a box, in an envelop or in the same item package.

See that Amazon is eliminating the packaging weight adjustment to our rate card calculation for FBA. Does this mean Amazon will ship items in the same item packaging. ??This is a huge no. FYI this is considered used.


#102

Damn math, examples, and facts.
pic


#103

@SB62781, Thanks for our question. Starting June 1, 2021, we will not have packaging weight included in shipping weight.


#104

@seamod Thank you for responding. So this is a break in fees for sellers.

If my unit weight is 15oz, my shipping weight would fall under the 1-2lb ($4.90) range based on the current rules. After June 1, 2021 my shipping weight will be in the 12-16oz range ($4.25).

Will I need to request a re weighing of my item after June 1st, 2021?


#105

What are they using to calculate dim weight? The package dimensions or the shipping box dimensions?


#106

I think almost every seller is storing their products for you around the country or in their garage, getting inbound freight cancelled etc at great expense to all of us. We see the earnings reported on the stock market, do you really need more?


#107

So glad I made the decision to Remove from FBA years ago!


#109

Math is very clear and truthful when used correctly and all components are factored in.

Your math is incomplete.
There are many other factors in the equation.

Your premise is also incorrect.

We did not speak directly to sellers costs in the quote you used
from us but rather the cost / selling price of items on Amazon as
sellers add in the costs of selling on Amazon to the price of their goods.

You also agreed and now are attacking your own position using math?

Nope123:

Personally, I do think that the cost of selling on Amazon is higher than other Marketplaces. But it is not because of the referral / pick & pack fees. The added cost is storage fees, returns, and shrinkage due to all the customer funny business.

VTR:

Damn math, examples, and facts.

Math , examples and facts are quite useful when used appropriately
and calculated correctly.

In the post you were responding to they were not used correctly.
The poster created a false narrative / sum using an incomplete equation
and by no means should be considered a mathematician, problem solver
or comprehensive reader.


#110

Can you provide an example of a cost factor that is missing that should be considered? Things like the value of time and other factors can only be measured independently, just like if a seller is already fulfilling other channels and adding Amazon to the mix.


#111

These are a few additional factors that many Amazon sellers
factor into their prices when listing their products on Amazon.

The poster we responded to did not include or even consider them.

Many times we hear that these additional factors, as they are magnified on Amazon,
are a “cost of doing business” here which of course they are.

As such they are added into the selling price for items listed on Amazon to meet the margin.


#112

Got it.
I would really like to compare apples to apples in regards to people making assertions one way or another.
Obviously, the expense of ones location plays a critical role in the determination of costs for SF/FBA. A person in NYC has a much higher cost of living than someone in rural Louisiana.


#113

In this instance “apples to apples” would be online selling.

For this, consider each online market place a “location”.

Therefore things often cost more on Amazon (NYC) than they do on Venue X (Louisiana)

Thanks for helping us bring our point to light.

You are appreciated.


#114

I guess I got the conversation mixed. I was looking to address this assertion and supported the wrong reply because that reply fits the assertion I thought it did LOL. Sadly I do not have a pony in that race as we do not offer on other online venues with rare and unique exception.


#115

“we absorbed over $5 billion in COVID-related costs on your behalf, and are absorbing billions more in the first half of 2021”

Forgive me not not believing this. Please make me feel better about this statement and give maybe, i don’t know, 2 examples with amounts.

How much do you value our time? Enough to proved a customer support rep that you do not spend 25% of the call asking to repeat what they said or them having a freaking rooster crowing from what sounds like their desk. Enough to actually answer the questions that are “escalated” the the mysterious team and not just send you a back link to an ambiguous policy that you called about to explain.

How much do you value the customers and sellers in America, too? I am sure most have relatives that can communicate more affectively than the reps you have now, and would love a job.


#116

Okay. You say that I’ve created a false narrative with an incomplete equation. Let’s add some more variables. These are the only significant costs that I recon I did not include in my original post:

Money Not Earned Due to Compliance Problems (e.g. suspended ASINs): ~$48,000. This is the amount of revenue not earned as result of products being unavailable over the past 12 months. All of the ASINs came back online after 10-30+ days. They were all false positives. This is a cost or pain point not seen on other Marketplaces. It is not possible to add this to my equation.

Returns:

FBM Returns: 5.71 per 10,000 sales
FBA Returns: 98.57 per 10,000 sales
FBA Replacements: 20 per 10,000 sales
INR & A-to-Z Losses: 6.875 per 10,000 sales
Shrinkage (lost during FBA check-in): 21 per 10,000 items

Total: 152 per 10,000 sales

Let’s put returns into perspective. My Walmart channel is currently running 198.4 Returns per 10,000 sales. Amazon is less than Walmart. Both Amazon and Walmart are higher than ebay. Marketplaces have higher returns than Shopify. I sell products that have low return rates. This is by design. I cannot express this in my equation. The cost difference between marketplaces is not huge. The cost is nominal when spread over my total sales. This might not be the case for all sellers.

Time Spent on False Positive Compliance Problems: Over the past 12 months I’ve spent roughly 16 hours working on POAs and compliance including pesticide training. It’s not very much time. The false positives are highly stressful because I feel as though Amazon does not care about me as a seller. I spent more than 40 days over the last year very stressed about my Amazon Channel. This is not a monetary cost. But it is a real cost in terms of life stress. The ‘stress’ and risks associated with earning your living as an Amazon 3P are SIGNIFICANT - beyond words.

Returned Unfulfillable Inventory: 86.71 per 10,000 sales. Better than half of unfulfillable returns are good and can be resold as new. I don’t know why Amazon sends back perfectly good items. But they do. They also send me random merchandise (not mine) attributed to my returned ASINs (mistakes?).

I cannot think of any more significant costs.

I stand by my original post - FBA is a good deal. The cost increase is expected and will be offset by raising retail prices.


#117

Agree 100%. We have had too many returns that have clearly been tampered with - either watered down or replaced with other liquids. We would much rather have customer returns come directly to our facility so we can test them for quality control.


#118

So you still dont give 2 cruds about your sellers. Got it. Thanks for the update! :-1: