This is the fourth installment in my series about the differences between the eBay and Amazon selling platforms. For each of the next six weeks I will continue to discuss these areas and try to dispel some of the myths that surround selling on Amazon.com
I asked veteran Amazon sellers via Facebook what differences they found between selling on eBay and Amazon FBA. There were ten areas identified as noticeably different between the two platforms:
- What You Can Sell
- The Rules
- Customer Service
- Getting Paid
- Sales Tax
- Profit Potential
Listing on Amazon is FREE
The fee structures between eBay and Amazon are quite different. The main difference between the two platforms, regarding fees, is that on eBay you pay an insertion fee every time you list an item and every seven to 30 days, depending on listing type, after that until it sells or you decide not to relist the item. Depending on your level (no store, basic, premium or anchor store) this fee varies. You can list on Amazon for FREE. There is no fee until your product sells.
When you sell on Amazon via FBA you are sending all of your product to one (or more) of Amazon's more than 50 warehouses across the United States. By doing this, you are increasing the costs associated with selling. Now remember that selling prices also tend to be higher, sometimes significantly, when selling FBA versus Merchant Fulfilled (MF) or eBay. Additional Amazon fees include:
Inbound Shipping: This is your cost to ship your products to the Amazon warehouse(s). Using Amazon partnered shipping (via UPS) you get ridiculously good rates to ship boxes ranging from $.30 to $1 per pound depending on where in the country you are shipping from/to and the weight/size of your package. If you are shipping East Coast to West Coast you'll incur higher fees then shipping on the same coast. FACT: You'll rarely ship to the fulfillment center closest to you.
Monthly Storage Fees: Amazon charges very low monthly storage fees per cubic foot (see chart below). Depending on the size of the items you sell these fees will be minimal. I pay between $70-$100 per month with 1500-2000 items of varying size/shape.
For more information head over here.
Long Term Storage Fee: Amazon's goal is to have product on its site that sells. Not that sits in the warehouses for long periods. They make more money that way. The longterm fees are Amazon's way to weed out sellers who are just dumping their slow moving inventory in Amazon warehouses. These fees are assessed by Amazon two times per year on August 15 and February 15.
@ 6 months
Starting on February 18, 2015 Amazon implemented a long term storage fee to be charged when more than one of an item has been in the warehouse for more than six months. These items will incur a fee of $11.25 per cubic foot if they have been in the warehouse for six months on August or February 15th.
@ 12 months
“A semi-annual Long-Term Storage Fee of $22.50 per cubic foot will be applied to any Units that have been stored in an Amazon fulfillment center for one year or longer. The fee is in addition to the regular Inventory Storage Fee and will not be charged if a removal order has been created to remove or dispose of the Units prior to the fee being charged. Each seller may maintain a single Unit of each ASIN in its inventory, which will be exempted from the semi-annual Long-Term Storage Fee.”
For more information on long term storage fees head over here.
Amazon Commission: When your item sells Amazon, like eBay will take a portion of your sale in fees. eBay takes a Final Value Fee on both the sale price and shipping and PayPal takes a percentage of the sale as well. Similarly, Amazon charges multiple different fees per item sold including:
Fulfillment Fees for Standard-Size products
For more information about Amazon Commission and to see charts for oversized items head over here.
Fee Payment – On eBay all of your listing and final value fees are grouped together into a monthly invoice. You can choose to pay in one lump some each month or as you incur costs. On Amazon, all fees are taken out pre-payout. So the money heading into your bank account doesn't need to be set aside for additional invoices later on.
What are you doing TODAY to move your business forward?
Interested in selling on Amazon with Fulfillment by Amazon (FBA) or know someone who is? Not sure where to start?
Amazon FBA Launch Pad is the most current and comprehensive step-by-step guide to LAUNCH and GROW your Amazon FBA business from novice to startup success without spending a fortune. To find out more information click HERE.
If you are looking for more specialized one-on-one direction to grow your business and or manage your life balance, I highly recommend heading over here and checking out the individualized coaching available from the amazing Kristin Ostrander.