The numbers: Exactly how much new Fulfillment by
Part Two In A Five-Part Series
Apparently I’m weird, but there’s two huge things I find it unnecessary to talk about when it comes to selling on
- Small things that don’t move the needle that much (like debates about what constitutes “Good” versus “Very Good” condition).
- How terrible and unfair such-and-such new
Amazon development is.
When its time to talk about “bad things,” all I care about is
- A sober assessment of the reality.
- An immediate plan to adjust.
This article is about the former: “assessing the reality” of new FBA fees. (I’ll cover the “plan to adjust” next week).
Let’s get into exactly how new FBA fees will impact your profits, with real examples.
(And if you missed the last article, I break down all six of the recent changes at
The raw numbers of new Fulfillment by
When the last round of new FBA fees hit one year ago, I took a sampling of five books to show the “before” and “after” of the new fees. The books were chosen because weight is a factor in fees, and I wanted a sampling of the five most common book sizes:
- Mass market paperback.
- Trade paperback.
- Average hardcover.
- Large hardcover.
- Textbook.
I’ll take these same 5 books to show both what new fees translate to in hard numbers for books are various sizes and price points, and how they compare to over a year ago (the latter detail is not exactly useful, but interesting to see how much can change in 12 months).
General ed: How do
Yes this is major beginner material here, but as a refresher, here’s how it works when you sell something via Fulfillment by
Fees that apply to everyone (merchant fullfilled and FBA)
Amazon referral fee: 15% of sales price.- Closing fee. $1.80.
Fulfillment by
- $3.19: 0 to 1 pound.
- $4.71: 1 to 2 pounds
- $5.09: 2 to 3 pounds.
- $5.47: 3 to 4 pounds.
- $5.85: 4 to 5 pounds
What’s changed for 2018?
- Fulfillment by
Amazon fees have gone up for each weight tier. - Fees have equalized across the entire year (whereas in the past, they went up during the holidays).
Let’s take 5 books at various weights and price points, and show how FBA fees of 2016 and 2017 compare to new FBA fees today…
Book example #1: Rich Dad Poor Dad (mass market paperback edition)
Sales price: $7
Payout before February 2017 fees: $3.03
Payout after February 2017 fees: $2.18
Payout now: $0.95
Payout percentage change of most recent fees:Â -56%
Analysis: This is the end of the $7 book. RIP.
You see from the numbers above that this furthers the trend of new fees hitting low end books the most. The above example is the smallest size book you’re ever likely to sell (mass market paperback, i.e. romance-novel-sized), and at a $7 price point, new fees cut the price down by over half compared to a month ago. Brutal.
This pains me to say, but the days of selling $7 books via FBA are definitely gone. They were gone for anyone who needed $3+ payouts last year, but now they’re really gone – for all but the most serious bottom feeders.
Book strata #2: Standard paperback
![9a0b40d30fd05a852a9f03ea026d4600[1]](https://i1.wp.com/www.fbamastery.com/wp-content/uploads/2017/02/9a0b40d30fd05a852a9f03ea026d46001-200x300.jpg?resize=200%2C300)
Book example: Tipping Point (paperback)
Size / weight: 301 pages, 0.7 pounds.
Sales price: $8
Payout before February 2017 fees: $3.53
Payout after February 2017 fees: $2.45
Payout now: $1.79
Payout percentage change: –27%
Analysis: This a good example of an “average paperback book.” $8 is the current lowest FBA price as of the time I write this ($7.98), and it yields a less-than-impressive $1.79 payout.
After much consideration, I’m still committed to a $3 minimum payout for all my sales. To maintain this standard, you would have to list a book in the <1 pound range at $10 to get a $3 payout.
Somewhat good news to come out of the new fees: FBA prices have gone up, and noticeably so. For example with the above book, even with over 1,000 used copies for sale (a crazy high number) and fierce FBA competition, the lowest FBA price is still around $8. It’s not at all unusual to see books with 100+ used copies still having $10+ FBA offers.
So, FBA prices have gone up. But in terms of opportunity, does this mean $10 is the new $7? Have all the $7 books of 2016 simply become $10 books in 2018?
Not exactly, but there’s still tons of opportunity to hit a $3 minimum payout all day long, and do it with cheap used books, with a little effort.
Book strata #3: Standard hardcover
Book example: Â Flash Boys (hardcover)
Size / weight: 288 pgs, 1.2 pounds
Sales price: $10
Payout before February 2017 fees: $4.83
Payout after February 2017 fees: $2.95
Payout now: $1.97
Payout percentage change: –32%
Analysis: Books take a huge hit with new fees when they get above 1 pound. The free increase is $1.50, the biggest jump between any weight tier.
To illustrate, the paperback version of this exact same book (which comes in under a pound) will yield you a $3 payout at the $10 price point. That’s roughly a 33% difference over just a few ounces.
To get a $3 payout (you may have different standards), you’ll need to list this hardcover via FBA at $11.25.
This is a big lesson for new FBA fees: it’s heavier books (over 1 pound) that are most difficult to sell for a profit at “average” prices. More than ever, it pays to be able to roughly assess the weight of a book, and save yourself that extra few seconds in your scanning app to determine payout. If a book is over a pound, you can often just put that book down and walk away.
Book strata #4: Big hardcover
![51U-JW7mOtL._SX331_BO1,204,203,200_[1]](https://i2.wp.com/www.fbamastery.com/wp-content/uploads/2017/02/51U-JW7mOtL._SX331_BO1204203200_1-200x300.jpg?resize=200%2C300)
Book example: Â Money, Master the Game (hardcover)
Size / weight: 688 pgs, 1.8 pounds
Sales price: $10
Payout before February 2017 fees: $4.41
Payout after February 2017 fees: $2.55
Payout now: $1.96
Payout percentage change: –23%
Analysis: Notice the payout is only 1 cent off from the last example (which factors in one month of storage fees), yet this books is literally twice as thick. Anything between 1 and 2 pounds (such as the last two books) get the same fees.
There is huge gap between one and two pounds, and a ton (over half?) of books fall into it.
Spoiler alert here, but I’ve abandoned having a flat “minimum sales price,” in favor of setting a two-tiered minimum: one for books under a pound, and one for books over. And then I’ve learned how to assess what weight bracket a book falls into in the pre-scanning phase, without relying on my scanning app (because all apps have FBA offer blindspots, there’s too many clicks involved to get a clear payout amount for every book. More than ever, it really pays to estimate weight yourself).
More on this next week.
Book strata #5: Average textbook
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Book example: Â Introduction to Hospitality (textbook, ISBN 013281465X)
Pages / weight: 600 pgs/3 lbs
Sales price: $20
Payout before February 2017 fees: $12.50
Payout after February 2017 fees: $10.66
Payout now: $9.70
Payout percentage change: -9%
Analysis: While books sold at cheaper prices are severely impacted (see the first example), books at higher price points are barely impacted by new
For products above 2 pounds, the flat rate
Takeaways
- The cheaper the price point, the more severe the impact.
- Books take a big hit from 1 pound to 2 pounds, and more than ever it pays to accurately guess what weight tier a book falls in before scanning.
- The sub-$10 FBA book sale is (moslty) dead.
- Most “average” paperbacks come in at under one pound, and can yield a $3 payout at a $10 sales price.
- Most “average” hardcovers and heavier paperbacks must be sold for around $12 to get a $3 payout.
- The impact of new fees is greatly diminished for books in the $15+ range.
Coming up in this series
In the next article, I’ll be covering the hard numbers on the biggest FBA fees changes of all: New long term storage fees.
-Peter Valley
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#1 Regarding your spoiler alert under the Tony Robbins book, FBA Scan will show the profit without any additional clicking, assuming you have the buy cost plugged in. It also shows the weight at 1.93 for this particular book. Right now it’s showing a -0.19 profit at a buy cost of $1 and a selling price of $10. This also takes into account an inbound shipping charge of 0.40 per pound and a 1-month storage cost of 0.03. I wouldn’t want to sell this book for less than $15, which according to FBA Scan would yield a profit of $4.06.
#2 You said several times in your Amazon Altitude course that “about 99.5% of all books are totally worthless,”should not be touched,” and, “should not be brought into one’s inventory.” With the new fees, I’m guessing that figure should now be increased to about 99.9%. If that’s true, then it makes me wonder how on earth, day in and day out, week in and week out, I can consistently find books that fall into that other 0.01%; just using your own words here.
#3 At the end of the Rich Dad Poor Dad book you mention, “all but the most serious bottom feeders.” These sellers (Jensen, Flipping Pages, individuals who sell in bulk, individuals who base their business model on literally making nickels, etc.) are the ones whom I fear will continue to plague the listings of books at all the price ranges and tiers mentioned. They will do all these same calculations and arrive at selling points which will yield them about the same profit levels/percentages as always. The result of all this is that the “penny book” still plagues almost all listings, but at an increasingly higher price every time Amazon makes these kind of changes.
Thanks for all the details and examples! Very helpful. I’m still trying to decide if this is something I want to do.
Thank you Peter. Your insight and deciphering all this is most helpful and very much appreciated.
I believe the numbers are different for those of us who sell inventory that we stock ourselves.
Thank you Peter for the Executive Summary!
For those that do FBA, you should seriously consider making part of your inventory Merchant Fulfilled. I have been on the fence about going FBA for the past 18 months, but with the past 2 fee increases and the continually murky waters of sales tax collection I decided to stay Merchant Fulfilled.
Under these new rules, I would have lost $20 or more on some Long Tail books I’ve sold in the last year (yes I sell some books 6, 7, sometimes 8 years after listing) at $6 a year you do the math.
We all know these FBA fees will just continue to increase, so what will be your move when it goes up in 2019, to the point where 99.999% of books would be pointless to source?
Now is the time to at least consider other options for inventory control, even storing a few hundred books in your house would be a significant savings.
I’m waiting to find if I’m accepted by Amazon and then this fee structure is annoounced.
If I sign up for Zen Arbitrage will I get all the scanning apps etc. including weight calculator fee calculator, that can be helpful? For someone who would come in as an individual seller selling between eight-twelve books a month to begin with a limited budget. It would seem to be textbooks and scholarly fiction if you need to make as much money with a sale as possible and avoid some fees. ( I haven’t read all of your e-mails on this yet, I’m just in the process of doing so). If you add to this the fact that I must automate and use your shipping source , and it is important to avoid the most onerous fees what is the best strategy for a beginner who wants to clear a minimum of $100 per month after fees and work up from there? How fast do textbooks move and how can you judge the ones that will be sold within a couple of months to avoid heavy inventory costs.
Just a matter of understanding sales rank and knowing your numbers. The fundamentals are pretty simple.
Thank you for this summary. I just don’t think FBA is the way to go for small book sellers with low priced books. Seems to be a thing of the PAST. I am slowly recalling all my items from FBA, the few that I have left anyway.
On the bright side… Amazon is forcing sellers to become “efficient profit minded business people”. Most booksellers currently in the fold are not. Have you ever asked yourself why a FBA seller lists a book for less than the corresponding FBA fee? Or what about the character that lists a book in LNC for $9.00 while Amazon’s pricing their new copy at $39.90 – just 5 listings below their $9.00 price. You can’t lose money forever, eventually, they give up and move on. It’s called thinning the herd.
Regarding the above comment that the Jensens of the world will infiltrate their low ball pricing strategy into other pricing levels…I’ve always seen them there! I just give them the next sale and price my book to make money. Sure, its not as easy as it used to be, but what is?
The President of a large shoe manufacturer in Texas, once sent a sales rep to Africa to learn about the shoe market potential there. Two months later, the sales rep sent a telegram to his boss stating that Africa has terrible market potential. He continued by stating “no one here has any shoes on their feet”, I’m coming home soon.
The shoe manufacturer President upon reading the telegram jumped up from his desk and screamed, ” the possibilities are endless”, Stella he screamed. Get me on the first flight to Africa.
I love this. So true that changes are more about the option of laziness being removed vs the imposing of some cruel punishment. Thanks for sharing this.
I have books stored at my house that I am unwilling to send in, but lack the time to list and sell them Merchant Fulfilled.
Another reason I’m considering abandoning FBA for Merchant Fulfilled: Last year i decided to resume doing a little online selling. I dabbled in ebay before discovering FBA. I had 11 sales on ebay and 70 FBA sales. I got 9 highly favorable ratings on ebay from my 11 sales, and no negatives. I got one (somewaht demonstrably disingenuous) negative FBA rating – and a threat that my account was in jeopardy.? That’s it. 70 sales and one negative rating and no complaints but no positive ratings. Something seems to be amiss here to me.
This sounds like an anecdotal hiccup vs a fatal flaw in FBA. Its true that feedback isn’t as frequent on Amazon as ebay. 70 sales isn’t quite enough to draw any conclusions so I would encourage you to get that removed and give it another shot.
thanks for the feedback, peter.
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