FBA sellers panic over new Amazon fees. Here’s four reasons new fees won’t be the end of your Amazon business.
Amazon sellers panic over new FBA fees
Every time Amazon raises FBA fees, sellers panic. Online chatter turns into “the sky is falling,” and “Amazon is a greedy monolith bent on destroying small sellers.”,
Happens ever time there’s fee hikes. And every time, I have to roll my eyes.
Here’s why these sellers are wrong, and why you shouldn’t care about FBA rate hikes:
#1: You don’t need to profit on every item
Some of the biggest sellers on Amazon actually lose money on half their sales. Hopefully this isn’t you, but the point remains: All that matters is that you make a profit in aggregate – when all the smoke clears and you get your Amazon payout.
You never acquire inventory you know you’ll lose money on. But if the price drops (or FBA fees go up) and you sell an item at a loss, you should be adequately buffered by the huge profits you’re making on the rest of your inventory.
#2: Amazon needs FBA sellers
You can abandon the conspiracy theories. Amazon isn’t trying to price sellers you out of FBA. Amazon needs us. Third-party sellers accounted for 58% of sales volume last quarter. You might be dead without Amazon, but they’re dead without us.
#3: Your huge margins should buffer you from the impact of any fee increase
If a 10% FBA fee increase is killing your margins, your margins are horrible.
Either do huge volume or have huge margins. Either way, you’re insulated from the impact of new fees.
#4: The leverage Amazon offers makes selling FBA worth it – no matter what the fees
With FBA, you’re getting shelf space in the largest store in the world. If you’re the lowest price (or own the Buy Box), anytime anyone searches for your product, they have a higher chance of seeing your offer than anyone else’s in the entire country. This type of access to so many consumers has never been possible in human history.
And Amazon stores everything for you.
And Amazon ships everything for you.
If that extra 30 cent FBA fee concerns you: your options are to either 1. retrain your perspective or 2. get a real job.
I know what side I’m on.