FBA Sellers, listen up! Are You Still Giving Away Money to Amazon?
SellerLogic
May 17, 2022
Why should you waste money instead of spending it wisely? So let’s dive into how to cut FBA costs!
The cost of Amazon FBA is "dynamic,"meaning it varies based on factors including the type and number of items being kept and sent, the length of time they are held, seasonality, and so on.
In addition to the seller fee, there are two types of Amazon FBA costs: fulfillment fees and inventory storage fees.
So, what is the plan to stop wasting money?
FBA comes with a set of rules for sellers to follow when using the service. The topics addressed include inbound shipment, product packaging, barcode labeling, and much more.Consider that Seller Central has 15 pages dedicated to product packaging, with fundamental guidelines for all items as well as particular criteria for liquids, powders, glass, clothing, and so on.
Many sellers want to pay Amazon to take care of all of their packaging and preparation for them.There are several big disadvantages to this:
● Amazon charges a fee for each unit it must prepare for you.
● It will take longer for your inventory to become accessible for purchase.
● If you utilize manufacturer barcodes instead of an Amazon FNSKU barcode, your inventory may be "blended"with that of other sellers.
What are Amazon's FBA labeling and preparation fees? The cost of preparation (such as bagging and bubble wrap) varies between $0.50 and $2.00 per unit. The cost of FNSKU barcode labeling per unit is $0.30.
These costs quickly add up. Sellers who do the least amount of preparation and labeling might easily make an extra $1.00 or more for each unit sold.
Costs for fulfillment and storage are two forms of FBA fees that vary by size and weight. Your product measurements are already in the Amazon system, but they aren't necessarily accurate. You will be charged a higher cost if Amazon assumes your goods is larger than it is.
It's useful to knowhow Amazon decides the dimensions of your goods in the first place. When you establish a new ASIN and ship your items to an Amazon FBA warehouse for the first time, Amazon's Cubiscan system will scan it. They may then periodically re-scan your goods to see whether the size has changed.
Amazon's measurements are known to fluctuate greatly among scans, despite applying modern measuring technologies.It's unknown why this occurs, although it might be due to trapped air in bagged items, tape that sticks out and confuses the scanner, or just a human mistake.Remember that if Amazon changes your product dimensions, you will not be notified; instead, they will adjust them and begin charging you alternative costs.
So, what alternatives do you have? First, run a Fee Preview Report. This displays all of your goods' entire dimensions and size tiers, as well as FBA charge estimates. Check them against your own data to check if any of the measurements are wrong, particularly if they place them in a greater size tier.
Create a case with SellerSupport to have your products re-scanned. Amazon will put your items through the Cubiscan once again, presumably yielding the proper measurements. You should be charged the proper pricing in the future, and you may also seek a refund for costs that were overcharged on earlier transactions.
Keep a keen eye on your product dimensions because Amazon can change them at any time, or use a listing monitoring tool to keep track of any changes.
The right tools can track wrong FBA fees due to wrong product dimensions. Check out Lost&Found by SellerLogic.
If they go unnoticed, you're going to lose money! The most common errors in the Amazon FBA process can be divided into three categories:
● The item has been damaged and can't be sold.
● There have been several return errors.
● There is a flaw in the FBA fee calculation.
● During the inbound shipment, items are missing or not booked incorrectly.
Reimbursements do not happen by themselves in most cases. It is the seller's responsibility to demonstrate the loss of value and file a claim with Amazon.
FBA errors can only be detected with tremendous effort if you don’t have clever automation. The majority of people lack the knowledge and/or time required to manually study every minor detail, integrate required reports, and understand mistakes. As a result, even medium-sized businesses that use FBA can lose thousands of euros each year.
The seller's time spent creating reports and resolving open concerns will very certainly become unprofitable. This is why an automated solution like "Lost &Found" takes care of the tedious procedure for you. The data is analyzed by the SellerLogic tool, which identifies the above-mentioned FBA concerns.Each transaction that can be seen is the result of a single process. In most cases, this may be done retrospectively for up to 18 months.
When customers return things to Amazon, the company inspects them to see if they can be resold.Unfulfillable items are ones that can't be sold again because they aren't in good enough condition. They will stay at the fulfillment center and incur storage fees until you take action.
To determine if you have any unsellable inventory, run an Inventory Health report in Seller Central and look at the "Total unsellable quantity" column. If you have any unsellable inventory, you can opt to have it destroyed or returned to you.
In the future, check the Inventory Health report every week or two, or automate inventory removals.This is an FBA setting that you may use to dispose of or have unfulfillable inventory returned to you, either immediately or on a regular basis.
You'll not only save money on traditional storage and long-term storage, but you'll also be able to get some value out of your unsaleable items – for example, by offering items that can still be sold as used.
Amazon encourages sellers to use FBA in a variety of ways, including storage fees, storage limits, and the inventory performance index statistic (IPI). All of these factors encourage sellers to keep inventory levels low so that Amazon can optimize its storage capacity. If you treat Amazon's fulfillment centers like a personal storage unit, you will be severely fined.
Any current inventory difficulties should be addressed. The IPI score is advantageous since it provides a wide view of how well you manage your inventory. The facts may be found in the inventory age, inventory health, and suggested removal reports.These can help you figure out which ASINs are or will be subject to long-term storage expenses, as well as how many items you'll need to delete to avoid them.
You can avoid fines by submitting removal or disposal orders. Automatic inventory removals can also beset up to dispose of or return to you merchandise that has been stored for an extended period of time. Another way to increase sales is to simply cut your prices or provide discounts.
It's critical to deal with inventory that has been sitting in FBA for too long, but it's far better to prepare ahead so you don't get to that point.
You will not only save long-term storage expenses, but you will also reduce your ordinary storage fees. Of course, shipping less merchandise into FBA in the first place will save you money on removal costs.
Amazon provides a set of inventory management features for FBA sellers in Seller Central.
These tools assist entrepreneurs and eCommerce enterprises in effectively managing inventories and expediting order fulfillment.
When stock amounts are running low, the inventory performance dashboard generates an alarm, and it also provides demand planning and forecasts to provide suggested ideal inventory levels and shipment dates.
The dashboard shows important inventory data including sell-through rates, aging stock notifications, and storage optimization recommendations.
This set of tools comes standard with your seller account and may be accessed via Seller Central and the mobile Seller App.
Check out other tools that you might need for your FBA business.
Now as you are aware of the action plan of how to save money selling on Amazon, take into consideration how to delegate the tasks. You would be overwhelmed if you aim at doing everything yourself. Especially, it’s almost impossible to get reimbursement fast ifAmazon makes a mistake. For this goal, we recommend you to use Lost&Found tool by SellerLogic. It automatically analyzes all FBA transactions and shows hidden reimbursement claims without exception.
SellerLogic is a Germany-based company specializing in the development of software solutions for Amazon sellers. Their current offer consists of two software solutions: The SellerLogic Repricer andLost & Found. SellerLogic's Repricer optimizes product prices, enabling sellers to secure the Buy Box and increase their sales. The Lost & Found solution enables FBA sellers to claim reimbursements arising from FBA errors inAmazon warehouses. Moreover, SellerLogic's Customer Success Team provides guidance and consultation in regard to the communication with Amazon SellerSupport.
