FBA vs FBM 2018
Hi all,
We’ve been 100% FBA for our Amazon sales for the past couple of years.
Since then we’ve seen FBA fees and Q4 inventory storage fees increase dramatically.
We sell outdoor sporting goods. With the new proposed FBA fee increases next month, we’re having to once again increase our product prices in order to account for the increases.
At this point once the increases come into effect, it will cost us in some cases double to use FBA as opposed to FBM for many products.
Is the prime badge still worth it in 2018? Does anyone have experience with the difference in sales volume between FBA and FBM?
Amazon has become very expensive for customers recently compared to the other major marketplaces. Is free 2 day shipping really worth paying an extra $10 for a product on Amazon vs. free 3-4 day shipping on every other channel for less?
FBA starting to look like it no longer makes sense for our business.
FBA vs FBM 2018
Hi all,
We’ve been 100% FBA for our Amazon sales for the past couple of years.
Since then we’ve seen FBA fees and Q4 inventory storage fees increase dramatically.
We sell outdoor sporting goods. With the new proposed FBA fee increases next month, we’re having to once again increase our product prices in order to account for the increases.
At this point once the increases come into effect, it will cost us in some cases double to use FBA as opposed to FBM for many products.
Is the prime badge still worth it in 2018? Does anyone have experience with the difference in sales volume between FBA and FBM?
Amazon has become very expensive for customers recently compared to the other major marketplaces. Is free 2 day shipping really worth paying an extra $10 for a product on Amazon vs. free 3-4 day shipping on every other channel for less?
FBA starting to look like it no longer makes sense for our business.
7 replies
Seller_Iax15hxoENYMQ
what i do is have both fba and fbm skus for each product that is set up with fba
so a customer can choose
a lot of customer s are not prime customer so they end up paying for the shipping.
as long as you have the ability to ship then i dont think you will see a drop off in sales switching to fbm.
however i would still keep at least a third of the inventory in fba as there are a lot of sellers that look for fulfilled by amazon and prime
Seller_X9AxWaXfNnGAl
>
How much do you really need to increase your prices?
I do realize the the FBA fees are increasing, but by only 20 cents for orders under 1 lb and only about 53 cents for other orders. That should be a small percentage of your price. Most suppliers increase prices annually from 3-5% each year. You should be doing the same.
> At this point once the increases come into effect, it will cost us in some cases double to use FBA as opposed to FBM for many products.
>
That is really a surprise to me. When you factor in your shipping costs along with labor and materials for shipments, I would be really surprised that you can do that for less than half of the FBA fees.
I do understand the concern with storage. The costs are a bit more, but unless you are able to keep your own warehouse space extremely well utlized, you will often be paying more because of wasted space.
The long term storage fees is a concern, but it can be managed. You will need to take slow moving items out of FBA. You should be doing that anyway. If it is not selling, you need to sell it elsewhere or find a way to clear it out.
> Is the prime badge still worth it in 2018? Does anyone have experience with the difference in sales volume between FBA and FBM?
>
Prime customers account for about 40% of sales. It is not really feasible to provide Free 2-day shipping with FBM. Free shipping accounts for at least another 20%. Unless you can provide Free Shipping with a competitive product price. You will usually lose money or lose out on those sales.
> Amazon has become very expensive for customers recently compared to the other major marketplaces. Is free 2 day shipping really worth paying an extra $10 for a product on Amazon vs. free 3-4 day shipping on every other channel for less?
>
I do not think that it costs you $10 extra to provide orders on FBA than it does to ship with others methods.
1 lb $2.99 -> $3.19 + 1-3 cents storage per month
2 lb $4.18 -> $4.71 + 4-9 cents storage per month
3 lb $4.57 -> $5.06 + 10-15 cents storage per month
4 lb $4.96 -> $5.41 + 15-20 cents storage per month
It is hard to ship in a box for under $1 for the package and packing materials.
It is very hard to purchase shipping for even as low as the FBA fees - at least $7.15 for non-media.
Then, you have to pay someone (including yourself) to pick, pack and ship the packages - that should be at least 6 minutes per order, so at lease $2 for labor.
- As near as I can tell, it should cost you at least $10 to ship almost anything.
You should consider re-checking your numbers. Something does not make sense.
As was suggested, there is no reason why you can not do both. Leave your items at FBA (or take a portion out of FBA and post parallel listings for FBM. Price both based on your costs, including shipping and see what happens. It should be a reasonable test. I really doubt that you can price attractively compared with the FBA costs. However, give it a try.
Dave
FBA vs FBM 2018
Hi all,
We’ve been 100% FBA for our Amazon sales for the past couple of years.
Since then we’ve seen FBA fees and Q4 inventory storage fees increase dramatically.
We sell outdoor sporting goods. With the new proposed FBA fee increases next month, we’re having to once again increase our product prices in order to account for the increases.
At this point once the increases come into effect, it will cost us in some cases double to use FBA as opposed to FBM for many products.
Is the prime badge still worth it in 2018? Does anyone have experience with the difference in sales volume between FBA and FBM?
Amazon has become very expensive for customers recently compared to the other major marketplaces. Is free 2 day shipping really worth paying an extra $10 for a product on Amazon vs. free 3-4 day shipping on every other channel for less?
FBA starting to look like it no longer makes sense for our business.
FBA vs FBM 2018
Hi all,
We’ve been 100% FBA for our Amazon sales for the past couple of years.
Since then we’ve seen FBA fees and Q4 inventory storage fees increase dramatically.
We sell outdoor sporting goods. With the new proposed FBA fee increases next month, we’re having to once again increase our product prices in order to account for the increases.
At this point once the increases come into effect, it will cost us in some cases double to use FBA as opposed to FBM for many products.
Is the prime badge still worth it in 2018? Does anyone have experience with the difference in sales volume between FBA and FBM?
Amazon has become very expensive for customers recently compared to the other major marketplaces. Is free 2 day shipping really worth paying an extra $10 for a product on Amazon vs. free 3-4 day shipping on every other channel for less?
FBA starting to look like it no longer makes sense for our business.
FBA vs FBM 2018
Hi all,
We’ve been 100% FBA for our Amazon sales for the past couple of years.
Since then we’ve seen FBA fees and Q4 inventory storage fees increase dramatically.
We sell outdoor sporting goods. With the new proposed FBA fee increases next month, we’re having to once again increase our product prices in order to account for the increases.
At this point once the increases come into effect, it will cost us in some cases double to use FBA as opposed to FBM for many products.
Is the prime badge still worth it in 2018? Does anyone have experience with the difference in sales volume between FBA and FBM?
Amazon has become very expensive for customers recently compared to the other major marketplaces. Is free 2 day shipping really worth paying an extra $10 for a product on Amazon vs. free 3-4 day shipping on every other channel for less?
FBA starting to look like it no longer makes sense for our business.
7 replies
7 replies
Seller_Iax15hxoENYMQ
what i do is have both fba and fbm skus for each product that is set up with fba
so a customer can choose
a lot of customer s are not prime customer so they end up paying for the shipping.
as long as you have the ability to ship then i dont think you will see a drop off in sales switching to fbm.
however i would still keep at least a third of the inventory in fba as there are a lot of sellers that look for fulfilled by amazon and prime
Seller_X9AxWaXfNnGAl
>
How much do you really need to increase your prices?
I do realize the the FBA fees are increasing, but by only 20 cents for orders under 1 lb and only about 53 cents for other orders. That should be a small percentage of your price. Most suppliers increase prices annually from 3-5% each year. You should be doing the same.
> At this point once the increases come into effect, it will cost us in some cases double to use FBA as opposed to FBM for many products.
>
That is really a surprise to me. When you factor in your shipping costs along with labor and materials for shipments, I would be really surprised that you can do that for less than half of the FBA fees.
I do understand the concern with storage. The costs are a bit more, but unless you are able to keep your own warehouse space extremely well utlized, you will often be paying more because of wasted space.
The long term storage fees is a concern, but it can be managed. You will need to take slow moving items out of FBA. You should be doing that anyway. If it is not selling, you need to sell it elsewhere or find a way to clear it out.
> Is the prime badge still worth it in 2018? Does anyone have experience with the difference in sales volume between FBA and FBM?
>
Prime customers account for about 40% of sales. It is not really feasible to provide Free 2-day shipping with FBM. Free shipping accounts for at least another 20%. Unless you can provide Free Shipping with a competitive product price. You will usually lose money or lose out on those sales.
> Amazon has become very expensive for customers recently compared to the other major marketplaces. Is free 2 day shipping really worth paying an extra $10 for a product on Amazon vs. free 3-4 day shipping on every other channel for less?
>
I do not think that it costs you $10 extra to provide orders on FBA than it does to ship with others methods.
1 lb $2.99 -> $3.19 + 1-3 cents storage per month
2 lb $4.18 -> $4.71 + 4-9 cents storage per month
3 lb $4.57 -> $5.06 + 10-15 cents storage per month
4 lb $4.96 -> $5.41 + 15-20 cents storage per month
It is hard to ship in a box for under $1 for the package and packing materials.
It is very hard to purchase shipping for even as low as the FBA fees - at least $7.15 for non-media.
Then, you have to pay someone (including yourself) to pick, pack and ship the packages - that should be at least 6 minutes per order, so at lease $2 for labor.
- As near as I can tell, it should cost you at least $10 to ship almost anything.
You should consider re-checking your numbers. Something does not make sense.
As was suggested, there is no reason why you can not do both. Leave your items at FBA (or take a portion out of FBA and post parallel listings for FBM. Price both based on your costs, including shipping and see what happens. It should be a reasonable test. I really doubt that you can price attractively compared with the FBA costs. However, give it a try.
Dave
Seller_Iax15hxoENYMQ
what i do is have both fba and fbm skus for each product that is set up with fba
so a customer can choose
a lot of customer s are not prime customer so they end up paying for the shipping.
as long as you have the ability to ship then i dont think you will see a drop off in sales switching to fbm.
however i would still keep at least a third of the inventory in fba as there are a lot of sellers that look for fulfilled by amazon and prime
Seller_Iax15hxoENYMQ
what i do is have both fba and fbm skus for each product that is set up with fba
so a customer can choose
a lot of customer s are not prime customer so they end up paying for the shipping.
as long as you have the ability to ship then i dont think you will see a drop off in sales switching to fbm.
however i would still keep at least a third of the inventory in fba as there are a lot of sellers that look for fulfilled by amazon and prime
Seller_X9AxWaXfNnGAl
>
How much do you really need to increase your prices?
I do realize the the FBA fees are increasing, but by only 20 cents for orders under 1 lb and only about 53 cents for other orders. That should be a small percentage of your price. Most suppliers increase prices annually from 3-5% each year. You should be doing the same.
> At this point once the increases come into effect, it will cost us in some cases double to use FBA as opposed to FBM for many products.
>
That is really a surprise to me. When you factor in your shipping costs along with labor and materials for shipments, I would be really surprised that you can do that for less than half of the FBA fees.
I do understand the concern with storage. The costs are a bit more, but unless you are able to keep your own warehouse space extremely well utlized, you will often be paying more because of wasted space.
The long term storage fees is a concern, but it can be managed. You will need to take slow moving items out of FBA. You should be doing that anyway. If it is not selling, you need to sell it elsewhere or find a way to clear it out.
> Is the prime badge still worth it in 2018? Does anyone have experience with the difference in sales volume between FBA and FBM?
>
Prime customers account for about 40% of sales. It is not really feasible to provide Free 2-day shipping with FBM. Free shipping accounts for at least another 20%. Unless you can provide Free Shipping with a competitive product price. You will usually lose money or lose out on those sales.
> Amazon has become very expensive for customers recently compared to the other major marketplaces. Is free 2 day shipping really worth paying an extra $10 for a product on Amazon vs. free 3-4 day shipping on every other channel for less?
>
I do not think that it costs you $10 extra to provide orders on FBA than it does to ship with others methods.
1 lb $2.99 -> $3.19 + 1-3 cents storage per month
2 lb $4.18 -> $4.71 + 4-9 cents storage per month
3 lb $4.57 -> $5.06 + 10-15 cents storage per month
4 lb $4.96 -> $5.41 + 15-20 cents storage per month
It is hard to ship in a box for under $1 for the package and packing materials.
It is very hard to purchase shipping for even as low as the FBA fees - at least $7.15 for non-media.
Then, you have to pay someone (including yourself) to pick, pack and ship the packages - that should be at least 6 minutes per order, so at lease $2 for labor.
- As near as I can tell, it should cost you at least $10 to ship almost anything.
You should consider re-checking your numbers. Something does not make sense.
As was suggested, there is no reason why you can not do both. Leave your items at FBA (or take a portion out of FBA and post parallel listings for FBM. Price both based on your costs, including shipping and see what happens. It should be a reasonable test. I really doubt that you can price attractively compared with the FBA costs. However, give it a try.
Dave
Seller_X9AxWaXfNnGAl
>
How much do you really need to increase your prices?
I do realize the the FBA fees are increasing, but by only 20 cents for orders under 1 lb and only about 53 cents for other orders. That should be a small percentage of your price. Most suppliers increase prices annually from 3-5% each year. You should be doing the same.
> At this point once the increases come into effect, it will cost us in some cases double to use FBA as opposed to FBM for many products.
>
That is really a surprise to me. When you factor in your shipping costs along with labor and materials for shipments, I would be really surprised that you can do that for less than half of the FBA fees.
I do understand the concern with storage. The costs are a bit more, but unless you are able to keep your own warehouse space extremely well utlized, you will often be paying more because of wasted space.
The long term storage fees is a concern, but it can be managed. You will need to take slow moving items out of FBA. You should be doing that anyway. If it is not selling, you need to sell it elsewhere or find a way to clear it out.
> Is the prime badge still worth it in 2018? Does anyone have experience with the difference in sales volume between FBA and FBM?
>
Prime customers account for about 40% of sales. It is not really feasible to provide Free 2-day shipping with FBM. Free shipping accounts for at least another 20%. Unless you can provide Free Shipping with a competitive product price. You will usually lose money or lose out on those sales.
> Amazon has become very expensive for customers recently compared to the other major marketplaces. Is free 2 day shipping really worth paying an extra $10 for a product on Amazon vs. free 3-4 day shipping on every other channel for less?
>
I do not think that it costs you $10 extra to provide orders on FBA than it does to ship with others methods.
1 lb $2.99 -> $3.19 + 1-3 cents storage per month
2 lb $4.18 -> $4.71 + 4-9 cents storage per month
3 lb $4.57 -> $5.06 + 10-15 cents storage per month
4 lb $4.96 -> $5.41 + 15-20 cents storage per month
It is hard to ship in a box for under $1 for the package and packing materials.
It is very hard to purchase shipping for even as low as the FBA fees - at least $7.15 for non-media.
Then, you have to pay someone (including yourself) to pick, pack and ship the packages - that should be at least 6 minutes per order, so at lease $2 for labor.
- As near as I can tell, it should cost you at least $10 to ship almost anything.
You should consider re-checking your numbers. Something does not make sense.
As was suggested, there is no reason why you can not do both. Leave your items at FBA (or take a portion out of FBA and post parallel listings for FBM. Price both based on your costs, including shipping and see what happens. It should be a reasonable test. I really doubt that you can price attractively compared with the FBA costs. However, give it a try.
Dave
