Selling on Amazon can be a profitable, but it's essential to manage your input costs effectively in order to maximise profits. One significant aspect to consider is the selling fees associated with Amazon's Fulfillment by Amazon (FBA) service.
And what do you know! Amazon has announced adjustments to the fees for UK and EU sellers. Some fulfilment fees are reduced, but other increases might outweigh these savings for many sellers. Specific details can be found here - 2024 Fulfilment by Amazon fulfilment fee changes.
Our first suggestion to help you deal with this - is to make sure you maintain your current margins by increasing your prices and passing on the costs to your customers.
But here are 5 additional tips to help you reduce FBA fees in 2024, maintain your margins and achieve greater long-term success on the platform.
💰 Manage FBA inventory and storage efficiently - try to turn over your stock in 90 days and find ways to get rid of it past that timeline. Long-term storage fees are increasing and the cost of credit is escalating (if you can get it). Fulfill to other platforms, promote with vouchers, advertise, seek parallel listings or just burn the prices 😬 and get your money out.
💰Minimise returns and refunds - Providing accurate product descriptions, high-quality images, and exceptional customer service especially if you merchant fulfill. Streamline your return processes to minimise account health hits, associated costs and restocking fees.
💰 Optimise Advertising Costs: Keep an eye on your campaigns as they can run away with your money. Set a target ACoS and regularly review and adjust poorly performing campaigns to improve keywords, remove underperformers and optimise you budget whilst increasing you ROI.
💰 Review product dimensions and packaging: Look out for unusually high fulfillment fees and ask for remeasurements if necessary. And try to use smaller, lighter packaging so you can reduce the shipping weight, which directly impacts Amazon fulfillment fees. Consider bundling products together to lower the number of units requiring picking and packing, further lowering your fulfillment costs.
💰 Take Advantage of Multi-Channel Fulfillment (MCF): To expand your reach and de-risk your reliance on one platform - consider fulfilling to multiple channels by using Amazon's Multi-Channel Fulfillment service to fulfill orders on Ebay, Etsy and Tiktok Shops. By consolidating your fulfillment operations, you can reduce costs and improve efficiency. This approach allows you to leverage Amazon's fulfillment network while reaching a broader customer base.
There will always be margin pressures on retailers and its not always possible to increase prices. So for your long-term success it is more practicable to implement processes in your business that ensure that you are regularly doing everything you can to tighten down and lower those input and operational costs. This will give you a greater foundation to succeed as an Amazon seller in the long run.
