“I’ve heard the service is great, but I don’t really know about all the fees involved with using their services, should I sell on Amazon FBA or just stick to Merchant?”
If this is you or you fall in the vicinity of this lets see how I can help you in making a decision.
First I’ll be going over what they’re both about and then giving you some pointers on which service is best suited for you.
Amazon FBA vs Merchant
Since you’re asking you’re probably already familiar with Amazon FBA, but to just go over it briefly for those of you that might not have a full understanding here’s a little rundown.
FBA or “Fulfillment By Amazon” is a service Amazon provides for their sellers where they will store, prep, and ship your products, all within their own Fulfillment Centers.
But they don’t do this for free so there are some fees involved:
- Order Handling
- Pick and Pack
- Weight Handling
- Monthly Storage
- Customer Service (Handling Returns)
All being pretty self explanatory, the fees range from the quantity of products you have and the prep/labor needed to package and ship the products.
On top of this there is a 15% referral commission Amazon takes per sale for using their platform, but this is taken for FBA and Merchant sellers.
Merchant on the other hand is you fulfilling, prepping, shipping, and returns on your own. The only way Amazon is involved is them allowing you to use their platform for their 15% referral commission per sale.
>>>If you’re looking for a little more details between the two, here’s a pro’s and con’s article for FBA vs Merchant I wrote going over just that.
Choosing Between The Two
Now deciding which service you’re going to use is going to be totally dependent on what you think is right for your business/intentions, but maybe I can give you some pointers on which one would be a better choice.
Knowing if you should sell as a Merchant
If you’re someone who is simply looking to use Amazon to sell some old books you have or some stuff laying around the house then by all means use Amazon’s Merchant program.
Since you’re not selling in large quantities it wouldn’t make much sense for you to pay the fees associated with FBA.
You’re probably not going to be doing this full time so prepping and shipping off the product yourself shouldn’t be that much of a hassle either.
Knowing if you should sell on FBA
FBA will be best suited for those of you who are looking to make a full time income using Amazon, to do this you’re typically going to be selling in large quantities and their services can be beneficial.
Since they are handling the fulfillment, prepping, and shipping of your orders you can concentrate on other aspects of your business such as scaling, marketing, branding, etc.
Once your business starts scaling and sales start ramping up fulfilling the orders on your own will be close to impossible, unless you have the capital to rent/buy a warehouse and hire employees, using their services would be your best bet.
On top of this you wouldn’t have a garage overflowing with inventory all the time.
Although the fees might not seem that pleasant to some, the return you get on using their services IMO can’t be beat.
If you want a little example here’s Amazon’s FBA Fees Calculator, to use it just:
- Go into Amazon
- Copy the ASIN (10 digit code starting in BO) of a product listing in the URL
- Paste the code into the search bar in the calculator, click search
- Then go to where it says “Amazon Fulfilled” and type in the price of the product you copied
- Click calculate
Simple as that, now you know roughly what that seller is paying per unit to list their product on Amazon.
>>If this sounds like something that is for you, you should check out this Amazon FBA Course, they specialize in creating online businesses using FBA as the starting point and is run by experts in the industry doing so already.
Wrapping Things Up…
Nothing to complex, just simple and to the point, and hopefully you found this article helpful.
If you’re serious about going into the online retail game, I highly recommend you check out the course I recommend. Ideas need action and unfortunately just thinking about it gets us no where.
Just click the link above or the banner below to check them out and see what they’re all about.
The course is run by Matt Clark the CEO of Amazing.com, he’s run multiple multi-million dollar businesses and he’s taking you on the inside of how it’s all done.
Until next time,
P.S. We have a serious Taco Bell addiction and the affiliate links on our site lets us order off the dollar menu. Thanks for your support!