When new sellers in China enter the Amazon platform to sell products, it is crucial to choose the right operating model. Among them, FBA (Fulfillment by Amazon) and FBM (Fulfillment by Merchant) are two common options. However, before making a choice, new sellers need to carefully consider various cost factors to ensure the long-term sustainability of the business.
FBA model cost considerations
1. Product cost
Includes the cost of manufacturing or purchasing products, as well as related raw materials, production, packaging and transportation costs.
2. Transportation cost
The cost of transporting products from China to Amazon FBA warehouses can be the sum of sea, air or express costs.
3. FBA storage fees
The cost of storing products in Amazon FBA warehouses, including storage fees, long-term storage fees and return processing fees.
4. FBA order processing fees
The fees charged by Amazon FBA service for processing orders, covering packaging, labeling, delivery and customer service costs.
5. Amazon Commission
Sales commission charged based on a certain percentage of the sales price.
6. Advertising Fees
The cost of promoting products on the Amazon platform, including PPC advertising and Sponsored Products advertising.
7. Other Fees
The cost of registering an Amazon seller account, product brand registration fees, product quality inspection fees, taxes and insurance fees, etc.
FBM Model Cost Considerations
1. Product Cost
Same as the FBA model, including the cost of manufacturing or purchasing products, as well as related raw materials, production, packaging and transportation costs.
2. Transportation Cost
The cost of transporting products from China to customers, which can be the sum of sea, air or express delivery costs.
3. Amazon Commission
Sales commission also charged based on a certain percentage of the sales price.
4. Advertising costs
The costs of promoting products on the Amazon platform, including PPC advertising and Sponsored Products advertising.
5. Other costs
The costs of registering an Amazon seller account, product brand registration fees, product quality inspection fees, taxes and insurance fees, etc.
Although the FBA model provides more services and convenience, its cost is relatively high. In contrast, the cost of the FBM model may be lower, but sellers are required to handle matters such as orders and delivery themselves. Therefore, new sellers should carefully evaluate the costs and benefits of the two models based on their own circumstances and business needs in order to make the right choice.
In summary, whether choosing the FBA or FBM model, new sellers should have an in-depth understanding of various cost factors and conduct comprehensive considerations and comparisons. Only through reasonable cost control and precise budget planning can long-term and stable sales performance on the Amazon platform be achieved and sustained business growth be achieved.