Firstly What Is Amazon FBA?
It’s a service created by Amazon where with Fulfillment by Amazon (FBA) you store your products in Amazon’s fulfillment centers, and they pick, pack, ship, and provide customer service for these products. More information in the video below 🙂
How Much It Cost To Use Amazon FBA?
Amazon makes money as well for every item you sell through Amazon, you can use the Amazon Revenue Calculator to see a breakdown of the cost to sell through Amazon FBA.
Here’s a simple breakdown of the cost involve
Amazon Retail Price of A Product : US$20.00
- Amazon Fees 15% = $20 x 15% = US$3
- Order Handling Per Customer Fee = US$1 ( Fixed )
- Pick and Pack Fee = US$1.04 to US$1.44 ( more info here )
- Weight Handling Fee = US$0.50 to US$1.59 ( more info here )
Presuming that we take all the lowest fee, our returns after all the fees above will be , $20 – 3 – 1 – 1.04 – 0.50 = $14.46. So your item that you are shipping to Amazon has to be below $14.46 to actually make any money which in most cases you can do through private label your own products.
Other Misc Fees
- Amazon Pro Seller Account = US$39.90 per month
- Amazon Individual Seller Account = US$0.99 additional per sale
- Storage Fee = 0.51 per cubic meter ( more info here )
More information to sign up for a FREE 1 month Pro Seller Account or FREE Individual Account you can click here
When I first started selling on Amazon a few years ago, it was mind blowing to see all the different fees and it was pretty challenging to understand what was the end profits you were getting but although with all these fee why do many people still want to sell on Amazon?
Amazon Currently Revenue Below Forecast
As of the date of this writing, it shows on the chart above that Amazon has generated well over $91 billion revenue world wide! That itself is a big reason why you should start selling on Amazon 🙂
Amazon Compare To Ebay & Google
What was more amazing was Amazon has generated more revenue compared to Google and Ebay as shown in the above graph 🙂
Amazon has 270 Active Customers Worldwide!
Image Source statista.com
270 Million customers is a huge handful of customers that you can sell to. If you study the chart above you will notice their growth per year is crazy and it only just gets bigger and bigger every year 🙂
I hope by now you are convince that selling on Amazon is the way to go and that’s the only reason why I drop down all my business and focus right now on selling on Amazon 🙂 To find out more how you can start selling on Amazon click here .