At present, Amazon FBA has become the main logistics and distribution model for Amazon Chinese sellers. Some people even think that starting FBA is the real beginning of an Amazon seller’s career. We do not deny that FBA has many advantages. After many conveniences, the corresponding costs will be relatively high. As an FBA seller, it has become a very important thing to know and learn to calculate the various costs of Amazon FBA, and to take corresponding measures to control and reduce FBA costs.
The cost of FBA can be divided into 4 parts: the first part is the FBA first-leg logistics cost, that is, the logistics cost of shipping from China to the destination FBA warehouse; the second part is the FBA last-leg delivery cost, that is, when the seller places an order, Amazon helps the seller to deliver the product from the FBA warehouse to the consumer’s hands; the third part is the FBA storage fee. If the seller puts the product in the Amazon warehouse, Amazon will charge storage fees. If the product is placed for too long and exceeds a certain period, Amazon will also charge long-term storage fees; the fourth part is other fees, such as the loss during FBA transportation, the increase in delivery costs due to product size measurement errors, and the loss of returns and exchanges.
Regarding the first part of the FBA first-leg logistics cost, sellers can negotiate with the cooperating logistics companies themselves. The situation of each company is different, but generally speaking, the price of this part is already very transparent. There are many FBA first-leg logistics service providers on the Internet, and you can find out by asking. Let’s focus on the second part of the cost expenditure. This part of the cost is calculated based on the size and weight of the product. Amazon will divide FBA products into 6 levels such as “standard size” and “large items” based on the size and weight of the product. FBA’s delivery fees are also charged according to the different levels of the product, and different delivery fees will be charged for different product levels.
Next, suppose we want to make a power bank product, and its size and weight are similar to a power bank of the Anker brand, then we can put the product link of the Anker power bank in, click search, and from the search results we can see the details of various fees under the two delivery modes of FBA and FBM. Here we mainly discuss the FBA delivery model. Looking down from the FBA column, we need to fill in an approximate product estimated price and product cost price first, and then fill in an estimated FBA first-leg freight. After filling in, click Calculate, and the calculator will be able to help us generate the approximate cost and profit margin of the target FBA product. In addition, the FBA delivery fee will also appear on the fee details page.
As long as the actual product is consistent with the similar product selected from the Amazon site in size and weight, basically there will be no problem with the FBA delivery fee displayed here.
Let’s look at the third part of the cost expenditure, that is, Amazon FBA storage fees. The storage fees corresponding to standard size products and large products are different. And the storage fees are not fixed. During the off-season from January to September, FBA storage fees will be cheaper. During the peak season from October to December, FBA storage fees will be higher.
In addition, if the product is stored in the FBA warehouse for too long and exceeds a certain period, Amazon will charge additional storage fees for such slow-moving products, which we call “Amazon Logistics Long-term Storage Fees”. On the 15th of each month, FBA will conduct an inventory count and charge a long-term storage fee of $6.90 per cubic foot or $0.15 per product (whichever is greater) for inventory stored in the US operations center for more than 365 days.
The long-term storage fee is in addition to the monthly inventory storage fee, and this fee is assessed based on the date the operations center receives the product. To make it easier for readers to understand, you can take a look at the actual case of the collection of long-term storage fees.
Relatively speaking, the fourth part of other costs is more complicated. The cost structure of this part is mainly reflected in two aspects: on the one hand, the losses caused by the miscalculation of Amazon FBA warehouses, for example, the wrong calculation of the product size and weight, resulting in an inexplicable increase in FBA storage fees and delivery fees; on the other hand, product returns and exchanges, because Amazon promises that buyers can unconditionally return any purchased products within 30 days, so there is a possibility that the returned products cannot be resold. These returns become unsalable inventory. Sellers can only choose to remove the goods to overseas warehouses, or let Amazon help destroy them on the spot.