Wholesale Business Articles Amazon Merchant Fulfillment

What is Amazon Merchant Fulfillment and Its fees.

One of the popular ways for selling with Amazon is by selling on Amazon.com. Based on 2017, First quarter report (Q1), more than 50% of total products’ sales on Amazon come from 3rd party sellers.

To sell your product on Amazon, you are required to choose the best Amazon

Merchant fulfillment that best suits you and your needs. As a seller you can

choose to personally handle the fulfillment alone or authorize Amazon to sort,

package as well as ship your products using their own-fulfillment centers.

As a 3rd party seller who sells on the Amazon Marketplace, using Amazon’s fulfillment services is optional. Generally,

there are two major fulfillments options available for sellers selling on

Amazon. They include;

1. Fulfillment by Amazon-FBA; under this option, sellers give all the rights to Amazon so that

they can handle fulfillment for their products sold-on Amazon Marketplace.

2. Sell using own-fulfillment (FBM). - This fulfillment entails sellers handling

fulfillment for their products personally which are sold-on the Amazon Market.

Therefore, for sellers who choose “Sell on Amazon” as a method of selling with Amazon, by choosing Fulfillment by

Amazon-FBA, it enables you to sell your product through Amazon’s marketplace

while they manage the order fulfillment tasks for you. With Amazon Merchant

Fulfillment, sellers literally purchase Amazon’s shipping services though you

are required to transport your packages/parcels to the actual carrier so as to

reach Amazon fulfillment center.

How Sell on Amazon option works;

Sellers are required to list all their products on

the Marketplace of Amazon while they sell them as third-party sellers. Amazon

charges a certain fee to enable sellers to sell on their Marketplace; it is

generally based on the seller’s choice of program or fulfillment option to sell

through as well as how much they sell.

When a seller chooses FBA fulfillment option, they

leverage all their rights to Amazon. Their FBA fulfillment option enables

Amazon to;

1. Unpack your products and store them in Amazon’s fulfillment center.

2. Your product can be then searched and purchased on Amazon.com

3. Customers purchases your products

4. Amazon picks as well as packs the product.

5. they ship the product to the buyer

6. After shipment, Amazon offers customer service for the product’s buyer.

Amazon Merchant fulfillment fees/costs.

On February, 2017, Amazon changed their FBA fee structure. the cost of FBA is now determined by;

� Putting into consideration the two sets of expenditure

� the fulfillment fees

� Monthly storage costs, which is based in the item’s size and what time of the year it

is.

How Amazon’s Fulfillment fees are determines;

a) Fulfillment fee includes costs incurred while picking and packing seller’s orders, shipping

& handling, the customer service as well as product return.

b) Fulfillment fees are often charged per unit though there are specific requirements for

classification of your product’s size; which will determine the products’

price.

c) In addition, the fee is influence with the time of the year; usually, there is a

minimal price difference per unit that is between; January to September and

October to December so as to account for the sharp increase in price inQ3

orders.

Therefore, the total cost of FBA is determined by Amazon charging a certain percentage of the total same profits

and inclusive of the fulfillment fees. Charges of FBA fees is based on; the

item’s weight, handling fee, packing and packing charges as well as storage

fees which is charged per square ft.

Amazon Merchant Fulfillment fees;

1. Fulfillment fees per unit;

It includes picking and packing

orders, shipping and handling charges, customer service and product returns

charges.

Type of the item Unit weight Fee charged

a) Standard Size Small-1lb. or less $ 2.41

Large-1lb or less $ 3.19

Large-1Ib-2 lb $ 4.71

Large-Above 2lb $4.71+ 0.38/lb-above first 2lb

b) Oversize Small oversize $ 8.13-above first 2lb

Medium oversize $ 9.44+0.38/lb-above first 2lb

Large oversize $73.18+0.79/lb-above first 90lb

Special oversize $ 137.32+0.91/lb-above first 90lb

2. Storage fees per cubic feet;

This charge applies to all units

stored in Amazon’s Fulfillment center. The fees levied are based on the space

taken by your items which is measured in cubic feet. The charges are also based

on the type of the item as well as the time of the year.

Type of the item Time of the year Fees charged

a) Standard size. Jan-Sept. $ 0.69/cubic feet

Oct.-Dec. $ 2.40/cubic feet

b) Oversize. Jan-Sept. $ 0.48/cubic feet

Oct.-Dec. $ 1.20/cubic feet

� For items stored for more than 6 months at

Amazon’s fulfillment center will incur a storage fee of $ 11.25/cubic feet

while more than 12 months will incur fees twice as high.

There are other additional fees apply that may affect the standard pricing;

they include;

� Oversize items which has special handling fees

per products' shipments.

� Additional storage fees for items stored for

more than 6 months.

� Increase of fees for both fulfillment and

storage fees between October to December.

� Prep service fees/fees incurred while processing

customer returns for special categories.

� Additional fees of $ 0.40/unit for clothing item

Amazon tends to change their fees

structure almost yearly. Therefore, it is essential to be up-to-date with the

current Fulfillment fees so as to help you evaluate the costs you’re likely to

incur when you fill your Amazon Merchant fulfillment.

There are more than 80 fulfillment

centers owned by Amazon in the United States to handle fulfillments for itself

as well as for the 3rd party sellers. This enables them to deliver

the products easily and faster; making them one of the reliable online marketplaces.

Verdict; it is essential to note that there

are various Amazon Merchant Fulfillment option to choose from, you don’t have

to choose FBA option, it is optional thus take your time to calculate the kind

of products that are profitable when you fulfill with FBA. therefore, Amazon fulfillment affects

sellers’ product’s margin which somehow limits profitability though with total

sales increase and exposure, FBA is probably a good investment for 3rd

party seller’s online store By being aware and understanding the selling fees

structure for Amazon will be your first step to manage your marketplace campaign more effectively.