It’s estimated that by the end of 2021, Amazon’s market share will account for 50% of the entire eCommerce retail market’s gross merchandise volume (GMV) within the US.1
For any third-party seller, Amazon marketplace is the ultimate mecca. Two out of every three sellers utilized Amazon’s FBA business platform in 2020, generating $80.46 billion for Amazon in third-party seller service revenue—a 49.66% YOY increase. This accounts for more than half of all its sales.2
But what is Amazon FBA and how can you get your share of this eCommerce hub?
What Does Fulfilled by Amazon Mean?
Amazon’s Seller Central empowers eCommerce businesses to sell directly to every Amazon customer. Getting started is as easy as setting up a Seller Central account.
When you join, Amazon gives you one of two options:
Amazon suggests that businesses selling more than 40 items per month should opt for the second option, also known as the professional plan. After you make your selection, you have yet another binary choice to make in regards to order fulfillment.
Either, you can fulfill them directly, on your own. This means you handle shipping, returns, and customer service for all orders. Or, you can opt to join the FBA program.
And what is FBA?
FBA—Fulfilled by Amazon—means that Amazon handles all of the storage and shipping logistics on your behalf. You send your products to Amazon’s fulfillment center, and they handle everything from there, including:
Put simply, you manage sales and make sure Amazon remains stocked with your goods. They manage the rest.
How Does the FBA Process Work?
Broken down, the FBA process is fairly straightforward:
Naturally, Amazon doesn’t do this for free. There are FBA fulfillment fees you must pay in exchange for fulfillment services. But more on that later.
Benefits of Amazon FBA
So, why should you join the Amazon FBA program? There are several advantages to becoming a member, including:
What Does Amazon FBA Cost?
As an FBA seller, there are several costs you must account for. These include:
Inventory Fees
Amazon charges a monthly storage fee for goods stored within the U.S. These storage fees are charged midway through the month, typically between the 7th and 15th. The time of the year and the type of good impacts pricing:3
| Non-Dangerous Goods | ||
| Month | Standard-size | Oversize |
| January – September | 75¢/ft3 | 48¢/ft3 |
| October – December | $2.40/ft3 | $1.20/ft3 |
| Dangerous Goods | ||
| Month | Standard-size | Oversize |
| January – September | 99¢/ft3 | 78¢/ft3 |
| October – December | $3.63/ft3 | $2.43/ft3 |
To learn more about what is considered dangerous goods, and which dangerous goods are allowed to be sold on Amazon, provides more information.
Additionally, if your product is stored at a fulfillment center for more than a year without being sold, it can be charged a long-term storage fee.
Fulfillment Fees
Amazon also charges a per-unit fee for fulfillment, which varies according to the item’s category, size, and weight.
| Non-Dangerous Goods/ Non-Apparel | ||
| Size Tier | Shipping Weight | Fulfillment fee/unit |
| Small | 6 oz or less | $2.70 |
| 6-12 oz | $2.84 | |
| 12-16 oz | $3.32 | |
| Large | 6 oz or less | $3.47 |
| 6-12 oz | $3.64 | |
| 12-16 oz | $4.25 | |
| 1-2 lbs | $4.95 | |
| 2-3 lbs | $5.68 | |
| 3-20 lbs | $5.68 + 30¢/lb above 3lbs | |
| Apparel | ||
| Size Tier | Shipping Weight | Fulfillment fee/unit |
| Small | 6 oz or less | $3.00 |
| 6-12 oz | $3.14 | |
| 12-16 oz | $3.62 | |
| Large | 6 oz or less | $3.87 |
| 6-12 oz | $4.04 | |
| 12-16 oz | $4.65 | |
| 1-2 lbs | $5.35 | |
| 2-3 lbs | $6.08 | |
| 3-20 lbs | $6.08 + 30¢/lb above 3lbs | |
| Dangerous Goods | ||
| Size Tier | Shipping Weight | Fulfillment fee/unit |
| Small | 6 oz or less | $3.63 |
| 6-12 oz | $3.85 | |
| 12-16 oz | $3.89 | |
| Large | 6 oz or less | $4.22 |
| 6-12 oz | $4.39 | |
| 12-16 oz | $4.82 | |
| 1-2 lbs | $5.52 | |
| 2-3 lbs | $6.12 | |
| 3-20 lbs | $6.12 + 30¢/lb above 3lbs | |
| Over-Sized Non-Dangerous | ||
| Size Tier | Shipping Weight | Fulfillment fee/unit |
| Small oversize | 70lb or less | $8.66 + $0.38/lb above first lb |
| Medium oversize | 150 lb or less | $11.37 + $0.39/lb above first lb |
| Large oversize | 150 lb or less | $76.57 + $0.79/lb above first 90 lbs |
| Special oversize | Over 150 lb | $138.11 + $0.79/lb above first 90 lbs |
| Over-Sized Non-Dangerous | ||
| Size Tier | Shipping Weight | Fulfillment fee/unit |
| Small oversize | 70lb or less | $8.66 + $0.38/lb above first lb |
| Medium oversize | 150 lb or less | $11.37 + $0.39/lb above first lb |
| Large oversize | 150 lb or less | $76.57 + $0.79/lb above first 90 lbs |
| Special oversize | Over 150 lb | $138.11 + $0.79/lb above first 90 lbs |
| Over-Sized Dangerous | ||
| Size Tier | Shipping Weight | Fulfillment fee/unit |
| Small oversize | 70lb or less | $9.38 + $0.38/lb above first lb |
| Medium oversize | 150 lb or less | $12.20 + $0.39/lb above first lb |
| Large oversize | 150 lb or less | $87.93 + $0.79/lb above first 90 lbs |
| Special oversize | Over 150 lb | $157.91 + $0.79/lb above first 90 lbs |
Additional Fees
In addition to the normal fees, there are some others that may pop up from time to time. These include:4
How To Get Started on Amazon FBA?
Setting up an Amazon FBA account only takes a few minutes. Simply follow these steps:
Power Digital—Helping You Scale Through Amazon’s Marketplace and Beyond
Amazon’s FBA is a boon to small and big businesses alike. For a nominal fee, you no longer have to worry about juggling fulfillment on your own.
But this is just the first step to successfully selling on Amazon. There’s still a lot of work to do and Amazon seller mistakes to avoid. To learn more about other Amazon offerings like Amazon moments or exploring what is Prime wardrobe, visit us today.
Here at Power Digital, we offer digital marketing and growth solutions for your business. By partnering with us, we can make sure that your product sells and your business grows.
Is it really that simple? today to see that—yes—with us, it is.
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