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4 Important Factors Why Amazon Fees Are Worth The Money

By | Onlyner B.V

Being a seller on Amazon alone can do wonders for your online repertoire as a seller. Selling on Amazon is like trading in the big leagues. When customers know you’re associated with this platform, they’ll already be 50% inclined to buy from you compared to other unknown retailers. But when you look at the fees, it can be a hard pill to swallow.

Amazon’s fees are well worth it, and sellers are willing to pay more to be on this platform for a reason. It’s hard to ignore the massive pulling power that Amazon has. A monthly average estimates that more than 197 million people frequent Amazon’s website, which is too big for retailers to ignore. The retail giant is a clear leader in the e-commerce industry, beating out even its competitors like Walmart, Apple, and eBay.

Amazon is at the top of the proverbial retail food chain, which is one reason why sellers are willing to pay the extra cost. Other reasons include:

  • The Unparalleled Seamless Shopping Experience – The most significant benefits the retail giant offers are competitive pricing, reliable customer service, and seamless shipping. Customers who find the product they are looking for available on Amazon will more likely make their purchase on this platform than anywhere else, primarily if they have never heard of the retailer or merchant before. This is a big pull for customers. Amazon has become a credible brand name, so powerful that nine out of ten online shoppers price check a product and compare it on this platform before making any purchases.
  • Meeting Customer Needs Is Priority – it is the platform’s mission statement and one that they take very seriously. This means excellent customer prospects but higher competition in terms of getting your product to stand out for sellers. To fulfill this statement, the company sells as many different products as possible across as many niche markets and industries where possible so that no matter who you are or what you need, you can find what you’re looking for. Amazon’s robust platform is home to more than 12 million products, media, fashion, wine, books, stationary, parts and services, gadgets, electronics and tools on their catalog. Amazon’s Marketplace even plays host to 350 million products and counting.
  • It Pays to Be Prime – Since Prime was launched, the early days saw members paying $79 annually to get free 2-day shipping on eligible purchases. By the end of 2018, memberships for Amazon Prime reached a staggering 95 million users in the U.S. alone. Since then, Prime members have reaped plenty of benefits. These perks include first-look access to their lightning deals, unlimited video streaming, free monthly eBooks as well as discounts at Whole Foods stores. Members shop on Amazon and pay a monthly fee to gain faster shipping and exclusive benefits. Therefore, sellers are willing to pay more to be listed on Amazon because customers on Amazon are willing to spend.
  • Everything You Need Under One Roof – The platform has come a long way since its humble online bookstore beginnings. The vast selection of merchandise means there is always something for everyone, even the incredibly niche markets. Customers are sure to find the product they want at a price they can afford on Amazon.

Do the benefits you get by being an FBA seller balance out the cost of the fees? No doubt about it. Having that access to tap into a vast network of dedicated shoppers loyal to purchasing the platform will make a big difference to your business and your profit at the end of the day. If you want to give your sales its best possible chance, this is the platform that you need to be on. Annually, Prime members alone have recorded to spend an average of $1,400 on Amazon, whereas non-prime members have been shown to spend around $600. Your product will potentially be in front of 95 million shoppers, and that number is just based in the U.S. alone. We’re not even talking about international customer potential yet.

Calculating Your Profits

There are other minor costs that you need to pay for each product category. You need to think of returns, disposal costs, write-offs as well as shipping back items to you. Understanding the way they work will help you find a balance in paying your dues and gaining profitability.

These little costs sometimes do fluctuate and change, while some of them stay the same. So how do you keep updated on all these costs and make sure you know the exact profits you need to get?

We all need financial security, especially in preparation for that day when we no longer have a steady paycheck to rely on because we’ve retired. A business needs to make a profit to survive, and without profitable products to sell, it won’t be long before you’re forced to close shop.

Striking the balance of finding products to sell that still offer a decent profit margin after you’ve settled the Amazon fees that must be paid is the challenge. Maybe you’ve already got a product in mind that you’re passionate about selling, but what if that product turns out to be less profitable than you thought? It’s a struggle that many entrepreneurs face, trying to sell something they love that is still profitable at the same time. Finding that ideal mix is not always easy.

To help you figure out what the best product to sell is, you’re going to need a tool called the Amazon FBA Calculator. Using the FBA calculator is the best place to begin to get cost and profit estimates. This is a beneficial tool for FBA sellers. It allows you to figure the amount of money you are paying in fees no matter what business model you use on FBA.

The FBA Calculator helps you calculate your profit margins faster while on the move, anytime you need. You can get it free from the Chrome store, and users can estimate profits on any given product and see its cost price, estimated sales as well as the number of variables.

Here’s where you can find the FBA calculator for each Marketplace:

 

 

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