Recently, there are Amazon sellers complaining to us: “Amazon Europe’s FBA mailing and storage fees began to adjust prices from April 26th. The rate of increase is very large. Why is Amazon’s seller circle so quiet?”
It is understood that Amazon FBA costs almost every year, for the old seller is nothing new. At the end of February this year, the FBA fees of the US station were again comprehensively adjusted, and the rates were basically rising. Two months later, the European station once again announced the price adjustment message, and the magnitude is still very large. What is Amazon doing?
FBA mailing fees rose as high as 18%, small and medium sellers are struggling on the edge of “profit”
“Why small and medium sized sellers did not feel the horror of this price adjustment! Although FBA fees are rising every year, but they are all around 4%, not very painful, but this time, the mailing fee for one kilogram of packages has risen by up to 18%. Said to be ‘snapping bones’.” Amazon seller Mai Miao said it was very puzzled.
Examples of wheat seedlings indicate that the postage charges for the 1kg standard packages for Amazon UK stations in 2015, 2016, 2017, and 2018 were £1.77, £1.77, £1.84, and £2.17, respectively, an increase of 18% compared to last year.
Some sellers may say that it is not a matter of a few dollars. But imagine if there are thousands of pieces of cargo, then what will happen to the cost of FBA logistics?
Amazon’s business is getting harder and harder, especially for small and medium-sized sellers. Originally, the profit of products is not high. In addition to the platform fees, it is also necessary to count FBA mailing expenses and overseas warehouse expenses. At the same time, the FBA’s storage fees have risen even more. The average annual cost has increased from 17 pounds to a cubic meter of 27 pounds, which is undoubtedly a “worse” for sellers! !
Seller Mai Miao calculated: “Now Amazon has a storage fee of 23 pounds for January-September and 32 pounds for October-December, so the storage fee for a 40-foot container is 2176 pounds a month.”
There are also sellers who have done a cost comparison. This high postage plus storage costs have caused overseas warehouses to lose their cost advantage, which can be said to be comparable to the direct shipping costs of sellers.
Next, if we compare the current FBA fee adjustment tables for 2017 and 2018, we can clearly see how much has gone up!
FBA FEE 2017
FBA FEE 2018
“Since the establishment of a warehouse” or to help sell to reduce costs, small sellers can only start from these aspects … …
As we all know, the number of sellers on the Amazon platform has been increasing day by day, already overwhelmed and already on the verge of saturation. Analysts of the industry have analyzed that, as far as Amazon itself is concerned, warehousing space is limited. By increasing storage fees to force sellers to clear up unmovable stocks, this is normal business behavior.
Just like there are many people who rent on the market, when the demand exceeds supply, the landlord increases the price. Compared to sellers, it is also a fixed expenditure that cannot be avoided, but can only be “open sourced” from other sources!
The seller, Bob, said that in the face of rising logistics costs, either increase the sales volume and gain profits by taking advantage of the volume; otherwise, increase the selling price of the product to obtain profits.
In addition, from the “throttling” point of view, in addition to some of the company’s fixed expenditure can not be saved, the province can only save the following aspects:
1, personnel costs; personnel cost reduction does not mean that do not recruit or layoffs, but to maximize the value of employees, put everyone in his position suitable for him, to maximize the effectiveness;
2, the cost of the first trip; shipping is considered the most cost-effective FBA head-to-end delivery, compared to air, express delivery, and no restrictions on the product. There are also overseas warehouses that have to choose professionally responsible and efficient. If they are not well-handed, the actual operating costs will increase.
3, advertising costs; product operations as far as possible to data, refined, in addition to the new flower of the promotion costs to spend, but the old products are required to be refined, the maximum extent to let each CPC prices can generate value.
In this regard, the expert also said that the rising cost of logistics is ultimately to force the small sellers to a dead end, but it is beneficial to large sellers. Because big sales basically have the ability to prepare for self-building, according to the current FBA storage fee, a 40-foot container for one month’s worth of British FBA’s storage costs more than 2000 pounds, while the British local 1000 square meters of warehouse rent increase tax at 3500-4000 About £ pounds, this area can hold about 16 cabinets.
Self-building positions can obviously increase the cost advantage of big sellers. What is the way out for small sellers?