I was looking at my FBA (Fulfillment by Amazon) stats over the weekend and was simply amazed at what I saw. So I thought I would share it with you.
In January, FBA shipped 796 orders for me.
- Amazon Prime Customers- Made up 20% (157) of those orders.
- Super-Saver Shipping - Made up 53% (423) of those orders
- Regular Shipping - Made up 27% (216) of those orders.
Regular, merchant fulfilled, items are not eligible for Prime or Super-saver shipping, so 73% of the orders shipped in January were shipped to customers that would not have bought from me if I shipped my own product.
So far in February (through 2-15) FBA has shipped 765 of my orders and the percentages are basically the same as in January.
Why do I even mention these numbers? Because, if you are not listing and selling using FBA, you are missing out on a huge number of Amazon buyers, who want free shipping (I still sold 27% of my orders to customers who paid for S&H as well).
Here is how my items look in search: (Click on the image for a bigger picture)
My item (user id: inetmediasource) is the top listing in search and is more expensive than the item directly below me -- that is because FBA listings do not include a S&H amount. On Amazon listings sort by lowest Total Price, so as long as my price is lower than the lowest Total Price, I will show-up first in the list.
If a customer wants my item, they will get free Super -Saver shipping because the price is greater than $25. If it was under $25 they could combine it with another item to qualify for free Super-Saver shipping.
Prime customers, pay $79 per year for free 2-day shipping on all of their Amazon orders but merchant fulfilled items do not qualify. According to Amazon: "Prime members buy more items, shop more often, and spend more than the average Amazon.com customer. As the program continues to grow, it will become an increasingly meaningful source of competitive advantage in the online and traditional retail categories and a critical building block to Amazon’s success." (Source: Amazon Job Listing describing Prime)
Online merchants, that do not position themselves to sell to the Prime or Super-Saver customer, will be missing out on a very valuable customer segment.
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11 comments:
Randy, are there any restrictions on what can be listed on Amazon FBA? Ie: is there anything to prevent someone from listing the same new item as Amazon a few cents cheaper than Amazon's price?
Anonymous, yes there are some restrictions, mostly based on size and weight. Appliances would not work on FBA for instance. A rule of thumb would be, if Amazon sells it themselves and FBA customer can sell it.
As for competing with Amazon on price, I can't see anything that would stop an FBA account from beating Amazon's price by a penny if they could make that model work.
Thanks for the answer Randy.
This looks like a worthwhile service to check into. I was wondering what you experience with FBA for international orders has been like. I couldn't find any international shipping rates or much info when looking around the site.
Yeah, its sometimes difficult to get info. International orders are charged the same as domestic orders.
Since International orders are not eligible for Super Saver shipping or Prime the customer pays for S&H in addition to the purchase price. Amazon does not reimburse this amount to the merchant.
All you have to do as a merchant is submit a signature for the Customs form.
It is certainly worth testing out.
Randy,
How does FBA work with used media items? You have mentioned the buybak site in past articles, and I noticed that on your buybak site, it looks like you buy used media as well as new. How does that work with FBA? Thanks!
D,
It's pretty much the same as with new items. A merchant has to identify the quality level of the item (Acceptable, Good, Very Good, Like New)in the FBA program and then print a sticker to be placed over the UPC. The sticker has a code for quality.
I have to sticker each of my items, which sounds like a hassle at first but really takes little time.
Hopre that helps.
Hi Randy,
Is FBA worth it for someone like me, who only has a little less than a thousand or so books for sale?
Thanks for your answer.
Books, take longer to sell and weigh more than DVD's and CD's so just price accordingly. It depends on the types of books.
I'm putting my Dad's collection of Journalism books (1,500) up on FBA and assuming it may take 2 years to sell them. He just wants to get some money back but I estimate that his collection will bring in nearly 20K. He has some real rare books.
So just do some research on what the items are selling for and crunch the numbers to see if it is worth it.
You can put them all up in Seller Central and then convert the ones that sell faster to FBA if that makes more sense.
Once I have his collection up on the site I'll post the stats.
Randy,
Very interesting results with Amazon Prime.
Can you explain though how shipping & handling fees work for the SELLER when you have either Prime or Super Saver Shipping?
i.e. if the shipping and handling in both of the above cases is free to the PURCHASER, does the FBA SELLER get charged with any S&H fees?
If not, it would seem that as long as you sell items over $25 that you would essentially be getting away with free shipping with Amazon doing all the paying (and free 2nd day if the consumer is an Amazon Prime member)
I have a question. How do you know the breakdown of Prime, Super Saver, etc. customers
thanks
Robby
Hi Robby,
It is kind of difficult to figure out and not 100% accurate but you will get a general idea.
Look at the S&H charge in your Amazon settlement account. If there is a promo amount then that is a Super-Saver payment if there is no S&H that is a Prime payment and if the amount is #2.98 or $3.99 that is a regular marketplace order.
Hope that helps.
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