How to Avoid Unnecessary Fees with Amazon FBA
Amazon FBA has become famous for helping people make profits in very short periods of time. However, a lot of sellers don’t realize how much more they could be pocketing if they’d only limit their exposure to the following unnecessary Amazon FBA fees.
Find Out if Amazon Is Labeling Any of Your Items “Add-On” Products
If you sell any items at low prices, you need to make sure Amazon doesn’t label them as “add-on” products. This refers to any product Amazon won’t sell by itself. Instead, it has to be bought with another product, thus increasing the total sale price.
This practice can obviously hurt your profit margins because it makes it more difficult to sell the cheaper item. However, it also increases your FBA fees, too.
Instead of overlooking the fees for the additional product, Amazon adds the FBA fees for the two items together. By doing so, the company profits from the transaction, but you don’t.
Amazon also doesn’t publish the threshold for what is labeled an “add-on” product, so you need to be vigilant about checking your inventory to avoid these unnecessary fees.
Come Up with Your Own FBA Shipping Plan
Most FBA sellers simply send all of their items to a single fulfillment center and let Amazon decide where to store each item around the country. This makes sense, of course. Who’s to doubt Amazon’s wisdom and who wants to send their items to different FCs individually?
Well, the problem is that you can incur substantial Amazon FBA fees by letting the company ship your products all over. That’s because they’ll charge you each time they do so.
Coming up with your own plan is actually really simple. The Amazon FBA program even offers a shipping plan request guide with easy-to-follow instructions.
If you notice that items you send to an FC are listed as “reserved”—that means Amazon is moving them around the country to test different markets and charging you for it.
Take the time to learn about the markets unique to your inventory and you can save a lot of money by coming up with your own Amazon FBA shipping plan.
Selling Heavier Products
This may be an obvious one for many of you, but if you’re just starting out with Amazon FBA, it might not occur to you that heavier items are going to cost more to sell. That’s because it costs more for Amazon to handle your product and eventually ship it out.
While that shouldn’t necessarily dissuade you from choosing heavier items when beginning with Amazon FBA, you should make sure you’re padding your margins enough. Otherwise, the weight and handling fees could quickly ruin your profits.
The Amazon FBA program is known for being user-friendly. It’s open to everyone and just about anyone can start making a profit from it within a couple months. However, if you really want to see large returns, you need to treat FBA like a real business, which means managing your overhead. You now know about three different types of fees that could be cutting into your profits, so get started today by limiting your exposure to them.