Fulfillment by Amazon: Part I of FBA – Costs and Fees
Have you ever thought out using Amazon’s fulfillment services but just didn’t know where to start? Well, we’ve got something great for you! Our company is gearing up to take advantage of the Amazon FBA program and so we are educating ourselves about the program. We thought that as we learn more about FBA we’d share the information with you, too.
This is the first in a series we plan. Of course, the first step in deciding whether the Amazon fulfillment program is right for you is learning about all the costs involved. This post is not considering the “time” factor involved. Below are the financial costs one would incur to participate in the Amazon fulfillment program.
1. Shipping Costs to Get Your Product to Amazon
Obviously your product has to be sent in bulk to Amazon. You can choose any carrier you desire but you bear the costs of shipping to Amazon. We’ll be discussing in a later post about the actual mechanics of preparing items for shipping and the ultimate shipping of the product to Amazon.
2. Pro Merchant fees / Advantage fees
To particpate in the Amazon fulfillment program, you either need to be a registered Pro Merchant account holder ($39.95 a month) or sign up as an Advantage member ($29.95 a year). Advantage account holders are limited to sellers of media products like books, CDs, and video games. Advantage members can ONLY have orders fulfilled that are placed on the Amazon.com website. Pro Merchants can have their Amazon.orders fulfilled by Amazon as well have their non-Amazon.com orders fulfilled.
3. Inventory Storage Fees
Pro Merchant accounts: Storage fees are assessed on every unit of product for every day it is located in the Amazon warehouse. The rates are $0.45/cubic foot per month for the months January through September and $0.60/cubic foot per month for the months October through December. Note that the actual storage fees are prorated on a daily basis.
Advantage members: No storage fees are incurred for the first 60 days. After 60 days, the inventory will be disposed of or converted to Fulfilled by Amazon inventory, whichever you choose.
4. Order Handling Fees
Pro Merchant account holders whose buyer placed an order on Amazon.com:
Pro Merchant account holders whose buyer placed an order outside of Amazon.com. It is important to note that any order placed in an Amazon webstore is still considered to be outside of Amazon.com for fulfillment purposes:
Advantage Members whose buyer placed an order on Amazon.com:
NOTE: All of the fulfillment fees and associated costs listed above are in addition to the actual selling fees assesssed by Amazon.