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How Much Does Amazon FBA Cost

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Table of Content

  1. What is Amazon FBA
  2. What Does It Cost to Sell with FBA in India
  3. How to Make FBA Work for You
  4. Challenges to Consider
  5. Is Amazon FBA Worth It for Domestic Selling in India

Imagine this: Shagun, a brilliant jewellery designer with a stunning collection of sparkling necklaces, rings, and bracelets, is ready to take her business to the next level. 

But she’s wondering,

If you’re in the same boat, don’t stress. It’s normal to have questions. 

Let’s break down how Amazon FBA works, and the costs involved, so you can decide if it’s the right fit for your business.

What is Amazon FBA

Amazon FBA (Fulfillment by Amazon) is a service where Amazon handles the storage, packing, and shipping of your products. If you’re selling jewellery like Shagun, here’s how it works:

  • Storage: Amazon stores your products in its warehouses across India.
  • Shipping: Amazon packs and ships your products directly to customers.
  • Prime: Your products become eligible for fast Prime delivery, increasing visibility for your items.

What Does It Cost to Sell with FBA in India

The fees associated with using Amazon FBA depends on many factors including the products sold, services used, and others.

Let’s break down the costs using Shagun’s best-selling necklace, priced at ₹4,000.

  • Referral Fee (15%): Amazon charges a referral fee for jewellery. ₹4,000 × 15% = ₹600
  • Fulfillment Fee: For a 200g necklace, Amazon charges a packing and shipping fee of ₹450.
  • Storage Fee: Storing jewellery in Amazon’s warehouse costs ₹60 per cubic foot per month. For each necklace, this comes to ₹8.
  • Shipping to FBA Centers: Shipping 50 necklaces to an FBA centre in India costs ₹150 per necklace.

Total Cost per Necklace: ₹600 + ₹450 + ₹8 + ₹150 = ₹1,208
Shagun earns ₹2,792 per necklace before production costs.

How to Make FBA Work for You

  • Choose Bestselling Products: Focus on lighter, high-value items to save on storage and shipping costs.
  • Smart Pricing: Research competitors and price your products strategically to stand out.
  • Bulk Shipping: Shipping in bulk to FBA centres can reduce your shipping costs.
  • Tell Your Story: Share the story behind your products like Shagun does with her handcrafted jewellery from Jaipur. It resonates with customers!

Challenges to Consider

Selling with Amazon FBA, whether domestically or internationally, comes with some challenges:

  • Customs Fees (International): If you decide to expand globally, be aware of the additional customs duties and taxes involved. Some sellers include these fees in their prices to avoid surprises.
  • Returns: Be prepared for returns. Having clear policies and great customer service can help keep them low.
  • Currency Fluctuations (International): If you’re selling internationally, exchange rates can affect your pricing. Keep an eye on those changes.

Is Amazon FBA Worth It for Domestic Selling in India

For many businesses, Amazon FBA offers a way to simplify logistics and reach more customers. 

It can be especially helpful for sellers who want to focus on their products rather than the complexities of fulfilment.

Amazon FBA can be an excellent way to streamline your business operations, whether you’re selling locally or internationally. 

By understanding the costs and benefits, you can make an informed decision about whether it’s the right option for your business.

Happy Shipping!