Saturday, November 6, 2010

Amazon's New FBA Revenue Calculator - Does It Make Sense to Have Amazon Fulfill It?

Are you wondering if it makes economic sense to fulfill that item yourself, or to send it in to amazon and have them pack and ship it to your customer? 

Now amazon has a new calculator tool that can help you make that decision. Here's part of an email I received about it:

"Check out the cost benefits of using Fulfillment by Amazon.

In October we launched the FBA Revenue Calculator to give you better insight into what it costs for you to use FBA on a per item level. With this tool you can do a side-by-side comparison of fulfilling orders yourself and fulfilling with Amazon:

  • Calculate FBA costs using real listings on

  • Compare your fulfillment costs side-by-side with FBA

  • Estimate profitability at different sales levels

Try the FBA Revenue Calculator."

Here's what it looks like. I tried it with a book I plan to sell, "The Girl Who Played with Fire" by Stieg Larsson (incidentally, all his books are selling very well from amazon now, used ones included):


In it, I put in a sample price of $6.25 for the paperback. With amazon fulfillment, you net $3.04, and with selling it yourself in this scenario, you make $3.96.  This is because of amazon's .50 pack fee, .40 for weight handling, and .02 for 30 days of storage.

Those fees aren't bad, and if you send in a lot of items to FBA, they will most likely sell a lot more quickly than your own listings, because they will appear on top of all the listings, and also buyers tend to trust them more. So you may make more money overall, even with the FBA fees.

So you have to weigh the worth of that over the small extra cost. (With a heavier book, this is going to cost more). I send amazon a mix of some of my bulky, more expensive books that I don't have space for, and hot items like video games I want to sell quickly and I know the FBA tag will help.

I'll have a better handle on how the numbers crunch out as more time goes by. As for now, I'm happy with my fba listings.


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