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I am planning to sell the products on amazon
I am planning to sell my product on Amazon, and I've reviewed the Seller Calculator on an external website. However, I have some concerns and would appreciate clarification:
For a product priced at Rs 100, Amazon's fees and GST/taxes seem to add up to nearly Rs 85+. Could you help me understand how these charges are calculated?
How do I factor in the cost of the item and determine the profit margin?
In case of a product return, who bears the cost – the seller or Amazon?
I’m feeling a bit confused about these details. Is there an official site or tool that can help me accurately calculate the margin and selling price for my product?
Thank you for your assistance
Ramakrishna
9 replies
Seller_lFg7VUzl8pJZA
Use this link for calculation : https://sellercentral.amazon.in/fba/profitabilitycalculator/index?lang=en_IN&ref=FBAPricingServicesPage&ld=NSGoogle
Buyer Return and Refund Fees are on Seller. Courier Return are however not billed by Amazon. This is for Easyship only. If you use Self Ship, all shipment cost are on seller.
In case of returns, you may get wrong item / damaged item etc. Safe-T Claim can be claimed but seller generally ends with peanuts or in worst case, a denied claim.
Seller_0oYBD8OzSZqIS
Below are the charges charged to seller,
- Amazon referral fess (commission)
- Pick & pack fees
- storage fees (if selling through amazon warehouse)
- handling charges
- shipping charges
If shipping through self ship means sending through your own courier that means you need to make sure the product gets delivered on or before the said date of delivery as per system to the customer. If delayed then the late dispatch / delivery rate of metrics is impacted on overall account health which leads to sales loss, account hold, shut down of account hence forth if the metric is not maintained. this happens if major products are late delivered or dispatched.
If shipping through easy ship (means keeping material at your end and dispatch through amazon courier option as an when order received) minimum charges are now around 90-120 for below 500gms weight in volumetric. Now, there are 3 zone of shipping one is local, regional, and national so charges vary if product is sent from far away place.
If shipping through amazon fba you need to get it registered and send material to amazon warehouse in bulk. Each order will be dispatched & packed by them itself. Now, here you have fba storage charges which will be charged based on their sq meter place used on monthly storage basis.
If a order is placed by customer & he/she cancelled the order before dispatch no charges are charged by amazon for order generation. But, if a order is shipped by you and in transit order cancellation, or return due to customer dissatisfaction or damage then, you will be charged by amazon for their commission and 2 times shipping cost 1 is for shipping & other for return shipping. It can happen that the product might be damaged in transit so loss of product or packaging too.
Overall point is around 50% is what amazon charges for a single product. Rest 50% you adjust with your purchase+labour+packaging+loss margin+advertisement and you are in loss overall.
Next major point Advertisement is major part if you are a king on that then your least cost is 20-22% of the sales is consumed in advertisement, hence many also loose 40-45% too. Because the bids are hight at the moment for every category.
Finally the conclusion is if you sell products which are under selling price of Rs.500 & below 500gms in volumetric then you get to see some what profits.
Choose your products wisely because amazon commission structure is high in terms of luxury / lifestyle products.
There is a amazon calculator which will make you understand the charges calculation. Below is the link.
https://sellercentral.amazon.in/fba/profitabilitycalculator/index?lang=en_IN
this link will help you understand overall charges amazon take from you: https://sell.amazon.in/fees-and-pricing?ref_=sdin_nav_pricing_fees
Hope I have cleared you the basic. Hope you have a best selling experience.
Also would like to say one thing try putting your foot in the shoes then only you will understand whether it fits you or not a pair of your size.
Seller_TuJeyYQR4XdKK
if you don't have rocking higher retail profits, don't join e-commerce.. because of hidden expenses, damages etc.
Sakura_Amazon_
Hello @Seller_7QDPGpHDOat6e,
I see that other sellers have already shared amazing guidance and fee explanations.
For sure, the first thing would be to decide which shipping model works best for you: Seller self-shipping, FBA, or Easy Ship.
I recommend visiting Seller University where you'll find useful resources about each of these shipping methods. However, to start, I encourage you to watch this video: "Amazon Seller Fees and Pricing"
Let us know about your findings!
Regards,
Sakura
Seller_K0B9E4aomPtLg
I also started selling on amazon recently. All these fancy calculator are far from reality and hide the ugly side of selling on Amazon.
Most orders are cancelled or returned by buyers if you product are low value item forget selling on Amazon. Also advertising which is essential to have a visibility of the product to buyers, which cost a lot too. If single return eat out your huge %age of profit forget selling on amazon.
if you have 100 rupee product as selling price, please drop the idea of selling this
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