Every time I see chatter on Amazon forums about increased fees, and how the sky is falling, and Amazon is a greedy monolith bent on destroying small sellers, I just roll my eyes. Specifically, I’m talking about the people who complain about the Fulfillment by Amazon (FBA) fee hikes going into effect on February 18th.
Here’s why they’re wrong, and why you shouldn’t care:
Its not important that you make money on every single item.
Some of the biggest sellers on Amazon lose money on half their sales. There’s no reason to do this if you’re small and not doing massive volume, but the point remains: All that matters is that you make money in aggregate.
You should never acquire inventory you know you’ll lose money on, but if the price drops (or Amazon fees go up) and you end up losing money, you should be adequately buffered by the huge profits you’re making on the rest of your inventory.
Amazon needs you.
Drop your conspiracy theories. Amazon isn’t trying to price you out of selling with them. Amazon needs you. Third-party sellers accounted for 40% of sales volume last year. You might be dead without Amazon, but they’re dead without us.
Your huge margins should buffer you from the impact of any fee increase.
If the extra 2 cent “Pick and Pack” fee increase is killing your margins, your margins are horrible.
Either do huge volume or have huge margins. Either way, you’re insulated.
The leverage Amazon offers makes selling there worth it – no matter what they do.
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 they store everything for you.
And they ship everything for you.
If those extra 2 cents concern you, let’s either retrain our perspective or get real jobs.
I know what side I’m on.Have a comment? Contribute by posting below.
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