Fulfilment By Amazon Calculator
Understand Fulfillment by Amazon costs while selling your products with online.
Amazon FBA Calculator (and FAQ)
If you’re just starting out in ecommerce, it’s likely you’ve considered selling on ready-made sales platforms.
Amazon is the second-largest online retailer in the world (This blog from Forbes outlines Alibaba.com as being the largest, and why) and sells to millions of UK customers.
If you are unsure about what’s entailed in selling through Amazon, Salesbloom offers a specialised consultancy service specifically for that purpose.
The costs of different selling fees on Amazon can be confusing, take a look at their Amazon pricing page and you’ll soon be deep into calculations, if not flummoxed.
With that in mind, we’ve created a free Amazon fees calculator, based on the methods used by Amazon themselves.
Revenue calculators save the hassle of determining selling fees as the cost per unit is easily inputted and a total fulfilment cost is displayed showing your profit margins at a glance.
How the Amazon FBA Fees Calculator Works
Our web app software is calculator based and begins with a seller entering some primary information and the overall fixed initial costs.
If any area is not applicable, enter ‘0’.
There is provision to enter costs not including and specific to your industry (for example marketing costs)- always enter these as a ‘cost per unit’.
Our calculator works on a cost and profit per unit basis, so simply enter;
- Volumes of the product
- Select the band for dimensions and weight from our options (Amazon calls ‘size tier’)
Note that fulfilment fees are automatically included here
- The initial cost price of a unit ex VAT inc.any duty and delivery cost to you (fixed cost)
- Costs of shipping the item to FBA (per unit cost)
- Intended Listing price (inc.delivery fees and VAT as applicable)
- Amazon fees
- The Amazon fees include sales fee but not including storage fees
Once you have entered the above product info, the Amazon FBA calculator will automatically calculate your net profit per item sold.
You can change any element of the data and the net profit figure will automatically update.
Adjust the selling price for example and see the profit figures automatically update.
Here too you can include other associated costs you need to consider.
To skip the questions and go straight to the fulfilment by our Amazon fee calculator.
Frequently Asked Questions Relating to FBA
So, you’ve completed your research, the opportunity looks good and you’ve decided to sell with Amazon?
You’re in good company.
According to macrotrends.net Amazon’s total revenue up to March 2019 was almost $60 Billion dollars. Yes, you read that correctly.
And to paraphrase the item from feedbackexpress.com more than a million new FBA sellers joined the platform in 2018 alone.
This post is written to assist those new accounts with their FBA listing, to offer a fulfilment price and profit calculator, and to answer some commonly asked questions.
For frequently asked relating to Amazon sales, our list of compiled answers may help without the need for searching the web.
What is Amazon FBA?
When an ecommerce company makes the decision of selling on Amazon, there’s the option to use the Amazon FBA system (the acronym of Fulfillment By Amazon which by the way, negates the need for the extra Amazon term).
How does Amazon FBA work?
If you are thinking of becoming an Amazon seller, Amazon fulfilment works in the majority of cases like this.
- Register for Amazon.
- Create your Amazon listings and select ‘FBA’ as the fulfilment option.
- Create an FBA shipment order.
- Ship your products to Amazon for storage in a fulfilment centre- there are many around the UK and Europe. For more information, check out transporteca.co.uk .
Note that Amazon automatically assigns which FBA you must ship to when you create an FBA shipment.
- After shipping to Amazon, you’re given access to their tracking system software to keep a tab on your inventory.
- Once a purchase is made either through Amazon listings or other ecommerce platforms you are linked to, Amazon picks, packages, and ships the item.
FBA is not available just for selling through Amazon.
For example, orders can be fulfilled via their service for products sold via your own website though in most cases, the packaging will show Amazon’s involvement.
Note that this service is called ‘Amazon Multi-channel Fulfillment and its cost is a little higher than that of FBA.
- The method of shipping is determined by the buyer and Amazon, and the buyer is provided with a tracking code relevant to their choice.
- All customer service and returns are carried out under the Amazon name, as are possible shipment issues.
What’re the Main Advantages of FBA?
Greater Online Presence
As Amazon is a ‘go-to’ site for products, it opens up the opportunity of selling to millions of prospective customers.
Perhaps the most important reason for FBA is access to the Amazon Prime customers, as they are Amazon’s best and yield the highest spend.
A Prime customer pays Amazon an annual fee which allows them free, next-day delivery for any inventory deemed ‘Prime’.
Prime inventory just happens to be almost every FBA product whether Amazon’s or your own.
Being able to access Prime members as customers could double, or even triple your daily sales.
Take a look at this article from businessinsider.com to see how Prime membership helps FBA sellers.
Depending on the size of your company, storage is very often an issue, but by selling through FBA as an Amazon business your storage problems are largely overcome.
Delivery Problems Addressed At Source
Shipping problems are addressed via Amazon, as is the 24-hour customer service which is handled in the language of the country it is sold from.
This doesn’t, of course, include addressing issues of poor quality products or negative feedback of the item which has to be remedied by you.
Speed of Delivery
Shipping speed is superior to many other outlets as it’s handled directly by Amazon and Prime
members have the extra advantage of free delivery.
Win the Buy Box
There’s an opportunity to win the ‘buy box’, which is a system Amazon has implemented to entice better quality, and hassle-free sellers pay the extra to gain an advantage over the competitors within their selling platform.
For a better understanding and opportunity to raise the chances of winning the buy box, this blog from cpcstrategy.com explains the concept in greater detail.
Perceived Superior Products
Products on Amazon are generally perceived to be of better quality than through say selling the item yourself as the Amazon branding offers peace of mind for the majority of customers.
If Amazon Breaks Your Item
Accidents happen and you need to know that your products are in good hands. In the event of damage to any of your items, Amazon will reimburse you for the costs.
Payment To You is Regular
Every fortnight, Amazon tallies up sales less fees and pays it directly into your bank account.
You can even request ad-hoc payments in between if you need a cash flow boost
Want to learn how to list your first item on Amazon FBA?
We know that adding items into FBA’s product list can be daunting initially.
There are quite a few steps to remember and you don’t want to get it wrong if you’ve got lots to add.
For a simple explanation, Take a look at this video here.
Q: What Items Can be Sold On FBA?
A: Almost everything can be sold on Amazon.
For a list of items that are not permitted, check out Amazon’s own restricted products list.
Q: What Shipping Options are Available on FBA?
Every Amazon shipping choice is available through FBA, including Prime, Gift Wrapping, and Free.
Q: If My Product Falls Under Amazon’s Free Delivery Category, Am I Charged?
A: No. If the customer doesn’t have to pay, neither do you.
The only caveat is if the customer wishes the item to be gift wrapped, which would then form part of seller’s transaction and will be charged along with the item’s price at the total cost the buyer has to pay.
Q: How are Fees Deducted on FBA?
A: Fees are taken by Amazon at point of sale from the customer’s payment. The balance is viewable in the ‘Payments’ section under the ‘Reports’ tab in your Amazon sales account.
Q: Are Sellers Charged for Each Item Sold on ‘Sell On Amazon’?
As there’s an advantage to selling on Amazon Marketplaces, each Amazon product is attributed with variable costs associated with their category as a type of referral fee.
However, if the product was not sold through Amazon but sent via FBA, the ‘Selling On Amazon’s fee’ doesn’t apply.
Q: How is FBA Billed?
By a verified and authorised charging credit card every month on the electronic invoice.
Q: How Should Products be Prepared for FBA?
All products should be shipped ready to be packed by FBA. Anything fragile needs sufficient pre-packaging for safety or is likely to be returned to the seller.
There are several steps that FBA asks a seller to complete for labelling and printing in their ‘shipping workflow’ tool within their account.
For further questions regarding Amazon’s FBA, you can go directly to their FAQ here.
How to Make the Best Profits with FBA
Get to understand FBA before going in too deep.
Learn their processes and how to complete the listings until it becomes totally understandable as it will save you money in the long term.
Create a template to work from (a ‘cheat sheet’ or ‘idiot board’) and work with it in a disciplined way.
Research your competition
What are they selling and how do they describe their products?
What, in your opinion, is making them sell better than their other competition?
There are software apps available online such as Jungle Scout (also available as a chrome extension app though sales estimates don’t seem to be that accurate in the UK) that offer added information regarding competitors’ estimated monthly sales and fees.
For further alternatives, this blog from garlicpressseller.com highlights another four or five choices.
A word of warning: Pick and choose your fights here as bigger companies can afford to run at a loss until they’ve nudged you out.
Study Amazon’s own best selling products
How do they sell?
What is the composition of the description (its placement, details, dimensions etc)
Sell with intelligence – think about upselling or bundling products
Remember you’ll be paying for monthly storage so you need products that move quickly, sell well, or bring in greater profits.
Rank your products on how well they are likely to sell (based on product research or previous sales).
If you sell cricket bats, for example, think about bundling it with a ball, stumps and pads.
If you have two similar products and one brings in a higher profit, think about offering the added advantages of buying it instead.
This has an added bonus of making your listing stand out as being unique so you will instantly reduce your competition.
Use a repricing program if you intend to sell seriously
In order to win the buy box, Amazon sellers have to be proactive about their prices and one of doing this is by constantly altering your prices -even hourly.
Many Amazon sellers use these types of tools to be price competitive.
Doing this without the software would be almost impossible so take a look at some of the repricing tools here, and in other areas online.
What is AMS?
Amazon provides a marketing tool for its vendors and sellers called ‘Amazon Marketing Services’ in order to create highlighted and targeted advertisements for items of your choice.
In Amazon’s own words;
- Choose the products you want to advertise.
- Decide which keywords to target and how much you want to bid for clicks.
- Get started with a small budget and create an ad in minutes.
For more details about how the tool works, follow this link straight to Amazon.co.uk.
Look at ways you can highlight your brand persona
Do everything within your power to analyse and understand your target market.
Only then can you begin to position your brand correctly and stay consistent.
Even your packaging is important as no one likes to receive damaged or poorly designed wrappings.
Employ SEO with your product listing and titles
Along with brand persona, it’s vital to understand how to optimise search engine optimisation in order to give a high ranking customer experience.
The right descriptive sets of keywords can do wonders for sales.
Think about how you describe your products and who uses them and include creative content that plays upon these descriptions.
Amazon allows ‘up to’ 250 characters but don’t overdo it.
It’s more desirable to use this space wisely, adding only what’s needed to help promote your items in their best light.
Optimise your product images
Amazon has precise rules about how images are displayed.
Their latest requirements can be found here.
In any event, don’t just comply with their rules, ensure they are the best you can do.
Think lighting, angles and close-ups and highlight fine details when you can.
Nowadays, 360° photo processing is becoming all the rage and offers a brilliant representation of a product.
The devil’s in the detail
One of the best methods of displaying a product’s details is through bullet point listing.
The more an item is described, the greater the chance of a sale as if you don’t do it, someone else will and they’ll be more likely to win the buy box.
Think dimensions, weight, colour options, uses.
Put yourself in your customer’s shoes and imagine what they are likely to ask you.
Answer as many questions as you can before they’re asked
If your products need a little more explanation than everyday items, ensure you address this with your product details.
Instructional photos and videos help sell products.
You don’t want to be inundated with questions about your products so ensure you create your own question and answer section before they come flooding in.
It’s likely you’ll still be asked things you hadn’t thought of but if they are relevant, add them into the description.
How quickly you answer and the inferred tone of your response all have a bearing upon your sales.
Amazon provides a section for questions and answers but some sellers don’t take advantage of this, leaving customers to ask when others haven’t bothered and bought from a competitor.
Get your colleagues, friends and family to fill in these sections with any questions you or they can think about the product.
The answers you give will give the impression of good customer service.
Don’t be afraid to ask for feedback and reviews.
Buyers are more likely to purchase items that have positive reviews and feedback.
Whenever you make a sale, ask for a review and when and if it arrives to make sure you
thank the buyer, whether via email or on the product listing.
If you’re unsure how to go about getting reviews, take a look at this blog from jumpsend.com and others online.
Amazon FBA Calculator FAQ
How is FBA fee calculated?
The FBA fee is calculated based on size and weight matrix table – each item is scanned with lasers when delivered to the Amazon warehouse and FBA fee is calculated based on Amazons FBA fee table – https://services.amazon.co.uk/services/fulfilment-by-amazon/pricing.html – with over 50 different size/weight pricing brands.
FBA fees for EU delivery are different (and slightly higher) than UK deliveries.
Other fees to be aware of include “annual” / “monthly” storage fees for slower moving items and labels requirements should Amazon need to carry out any preparation on the products to make them FBA ready (e.g. Amazon barcode / EAN label for pick/pack operation)
How much does FBA cost?
Varies on size and weight – but starts from £0.60 (small letter less than 100g in weight) through to £31.10 for 30kg large oversize parcels. A large letter parcel weighing 1kg or less is only £2.05 – so pricing competitive v RM and other couriers (especially when considering “labour” and customer service savings as well as sales benefits offered.
What is a good profit margin for Amazon FBA?
If you can make over 15% profit margin after VAT, Amazon FBA costs, Amazon sales % etc then that is a good starting point.
How does Amazon calculate shipping for FBA?
Shipping costs are built into the “one” FBA price per unit – one of the benefits of FBA is that it opens up the Prime Customer market – and they get (As a rule) free next day delivery – so that’s the delivery service you get from FBA for your one “price”. The fee is purely calculated on size and weight – the small, lighter an item, the cheaper the price – with heavy/bulky items costing more.
Amazon isn’t the cheapest method of merchant fulfilment company by some margin, and it does have its flaws.
Average seller fees are around 15%, and sellers aren’t even allowed to show their own trademark in their fulfilment listing.
But what Amazon does, it does extremely well.
Sure, the fulfilment fees are relatively steep but other selling platforms constantly strive to achieve with limited success what Amazon does without trying- it sells items in the billions and doesn’t need to promote itself.
To make FBA a profitable proposition as a seller, you have to understand your margins, and set up coherent selling and administration systems.
In order to calculate FBA, systems need to include fulfilment pricing, shipping costs, the weight of the items, and a myriad of other considerations.
An Amazon revenue calculator is a must unless you only sell a few items now and again.
FBA pricing has variable closing fees, so it’s not that simple to calculate and the best way to achieve it is with a reliable Amazon profit calculator.
Otherwise, you may find that your net profits were way off your estimations, or you could even lose money.
If you’re looking for some inspiration, take a look at this blog from crazylister.com of three success stories or this from amzfinder.com, all of the people who started out selling on Fulfilled By Amazon, FBA.