Monday, January 05, 2009

Amazon FBA - Time for a Test!

I've been singing the praises of using Amazon's FBA program to ship my product and now its time for you to test the service as well.

Amazon is offering a $1,000 rebate between January 1st and March 31st, 2009. [For new accounts only]

Qualified merchants will receive a one-time rebate, which will include:
  • The actual cost of their inbound shipments to an Amazon fulfillment center up to the amount earned per the below schedule, and
  • The actual cost of Fulfillment by Amazon fees incurred through the merchant's Amazon seller account between January 1, 2009, and March 31, 2009, up to the amount earned per the below schedule. Refer to Fulfillment by Amazon Pricing for information on fulfillment fees.
Qualified merchants are limited to one rebate.
  • The dollar amount of any rebate earned will be deposited to or used to offset any negative balance in the merchant's Amazon Seller account on or before May 1, 2009. The rebate will be titled "Miscellaneous Adjustment."
  • Qualified merchants will receive credit for the actual amount spent on inbound shipping to an Amazon fulfillment center and Fulfillment by Amazon fees (for example, if a merchant sends Amazon 501 units between January 1, 2009, and March 31, 2009, at a shipping cost of $150, and incurs $100 in Fulfillment by Amazon fees for units fulfilled by the Fulfillment by Amazon service, it will receive $200 in rebate credit for shipping costs and Fulfillment by Amazon fees charged to their Amazon seller account during that time period).
How to Take Advantage of the Offer

Qualified merchants can automatically take advantage of this offer by sending their product Units in by March 31, 2009. Link here for more information.

FBA opens your product up to Amazon Prime members as well as making it eligible for Super-saver shipping, so you can get access to a completely different Amazon customer than you are used to with self-fulfilled orders. I highly recommend the service.

Just my 15%

5 comments:

Cliff Aliperti said...

Oh man, I want in. I don't think it'd add up to much, though I'm having trouble deciphering just what exactly is rebated (For instance, you send them 50 items you receive $25? I'd take that!).

Wish they'd extend it to current users too, kind of leaves me with that same bad taste I get from my cable company when they offer the world to new users and charge me full-price for everything.

But if you haven't tried it before, as a current small user of FBA, I like mega-user Randy, would urge you to try!

Thanks, Cliff

John Lindberg said...

You have to be careful about freebie offers. The Amazon basic storage fees work out to $28.80 per month per typical 4 x 4 x 4 pallet or $38.40 per month during the pre-holiday fourth quarter.

The industry standard for fulfillment storage is only $16 per pallet per month.

The Amazon fulfillment charge for a typical 3 item order is $4.75 + (3 x $.75) = $7.00.

Typical fulfillment rates for the same service would be in the range of $1.85 + (3 x $.40) = $3.05.

Amazon.com is a great company, but it would be a good idea to shop around a bit before you make such an important and long term decision as picking a fulfillment outsourcing partner.

John Lindberg - President
EFULFILLMENT SERVICE INC

Randy Smythe said...

John,

Thanks for your input. There is much more to FBA, for the Amazon seller, than just a warehouse fee.

I use it to get access to Amazon Prime and Super-Saver customers and can charge more for my product.

My product moves so fast on Amazon that my warehouse bill for Dec was $11.64 for over 2000 DVDs and CDS. They only charge you for the space you use and the time it is in the warehouse. A single CD costs me 1 penny a month in warehouse fees if it stays in stock for a month.

I get unbelievable in-bound UPS rates. I get the same fulfillment pricing for my WebStore and Amazon handles 100% of the customer service.

Multi-channel fulfillment would certainly be a different issue but many sellers are creating a hybrid fulfillment system.

FBA for high velocity product and self-fulfillment for other channels. At this point I would not use Amazon to fulfill order on another marketplace because the cost would be to high. But it certainly works for my Amazon orders.

Randy Smythe said...

John,

Please email me at rksmythe at yahoo I would love to explain more in-depth.

Eran said...

Hi John,

Any idea how many mechants are using the Fulfillment by Amazon service?

Eran