Does Amazon tell you everything?
Many people who sell online are going to fulfillment by Amazon as a way to sell to their customers and take advantage of being a prime shipper. The question I ask is do you know how much you are being charged?
Let’s look at this example of Uber Appliance refrigerator for sale on Amazon and on their business website.
If you look at this, ignoring the product cost assuming they are equal on both fulfillment sides, the seller can charge $67.00 versus $79.99 on Amazon to make up for the shipping charges. At the end it is $79.00 versus $79.99 which using UPS ground you can easily get rates of $12 or less for this size package if you are doing any volume at all. Amazon will not allow this practice so this is not a possibility selling on Amazon. Lets look at the costs to sell on Shopify vs Amazon:
Amazon charges the fulfillment fees of $12.93 plus the $12.00 selling fees. We can assume that the website of the seller would charge around 3% to process payment, and Shopify charges 3% for the sale. This would still leave considerable profit for the seller here if they sold on their own website. This method allows the seller to list the product lower on their own website and charge shipping on the back end. In my previous post I addressed the percentage of people shopping on Amazon then looking for cheaper prices on the internet. Here is the graphic showing this from UPS:
But wait there is more…. Charges
You also have to factor in the cost of shipping your product to Amazon. Depending on your product, this could add another $2+ to your cost per unit especially if you are not sending large quantity.
Now Amazon brings down another charge hammer on top of you by having you ship a large quantity to a single location, then Amazon will decide which of their warehouses your product should go to. Guess who pays for that shipping? If you guessed Amazon, you are WRONG. You pay again.
Variety of products?
Let’s say you have a variety of products that you want to offer on Amazon. If they don’t sell well, you will be charged a storage fee by Amazon. If you want to ship it back to yourself to avoid these charges, you have to pay for that shipping. You may also have a monthly fee from amazon of roughly $40 to have a pro seller account.
It may be beneficial for you to sell with them if you have a product that sells well, and that product is under 2 lbs. If your product is over 2 lbs, you should look into setting up your own website and shipping everything yourself. I recommend:
It isn’t easy
Shopify because you can set up a store within 30 minutes. You need to know that success on your own website will not happen over night. It will take work. This blog is attempting to help you come up with unique ways to drive traffic to your own site.
Even if you fulfill your own products, but you sell on Amazon through the self fulfill program, they make you print the label off of their system. This way you cannot use UPS Worldship to print off your own Branded label.
Who is running your show?
After all of this I have to ask, are you in control of your business or is Amazon? Who is really running the show with so many charges to sell on one marketplace?
Don’t put all of your eggs in one basket because if they control the basket, they can raise the price of the basket at any time. What can you do if they raise the fees? Nothing, this is why it is time to take back control of your business today.