Amazon fba fees how are they calculated for Grocery and Gourmet Food Category

Posted by Damian Robert on

Hey guys, is Damien for marketing and food online? A kind of mixed up the video tonight? I'm actually going to be at my desk here. It's been quite a long day. Um, it has been roughly almost 12 hours. Um, so I'm going to do a really quick video. I've got my computer on as you can see this light shooting up into my face. Um, I wanted to talk. This video is going to be specifically about answering again another actually another subscribers questions. Um, I really actually enjoy answering these questions as I mentioned before, some of my videos because I know that there's a lot of subscribers, viewers that have similar questions if not the exact same question. So if I make a video in response to that, it's a good thumbs up because it helps me to kind of spread the word about the answer to the question to more people, um, and they get a chance to understand a little bit more.

So a lot of you may be thinking a lot about Fba as I do a lot of videos about Amazon Fba and the benefits to it. Um, so the question in regards to is the fulfillment fees, um, how do they, how do they, how do they regulate their fees, how are the fees applied to your products when they are doing the fulfillment and how what is it based on? Is it based on size, packaging, etc. So I've made a few notes down below here on my computer. I didn't want to print them up. So If I look down for a second I'm going to go through that. Um, and this information is based upon, of course, information provided by Amazon, but I kind of just recap everything and kind of made it as short as possible because as you know, I don't like to ramble on like I'm kinda doing now.

So let me get to the point and get you guys on your way. So. Okay. So, uh, there's small, large, a large one pound and a large one to two pounds and then there are a large two pounds and over. Okay. Now this is standard size product tiers. These price points and these fees are based on a tiered program that Amazon has established. Um, so I'm going to go through them and I do hope they make sense to you. I'll try to explain them as best I can without going into like a two-hour dissertation. Um, so here we go, a fba fulfillment fees from January to September. They actually have a set amount of fees for that timeframe and the fourth quarter from October to December, believe it or not, they actually decreased. They go down slightly. It's really not a huge decrease, but due to the volume of business that Amazon does, which is astronomical during the December, the month of December is just mind boggling how they do it.

Logistically, it just blows me away. So what they have is between January, September, small standard sizes, which is actually one pound or less, the fee is $2, forty-one cents. Now, this is the fee for the product itself. They also have a referral fee. Okay? And that is based upon the actual dollar amount and if I'm not mistaken, um, it's around a one, one percent, one and a half or one and a quarter percent plus the actual fba fulfillment fee. So those fees together combined, they will create the fee that you charged. So, uh, for instance, in some of my videos really quick, um, I had mentioned that I try to keep, I'm now starting to package products around a 13 to 14-ounce size package size. 

It'S a lot of candy for one specific type. So there's a couple of different reasons, but one of the main reasons is actually it reduces my fees, uh, which, which is great. Um, I can still sell the product, I have it at a price point and normally that's between 11 to $12. Now with that being said, between the actual a fba fee and the referral fee, it takes up a, as far as the percentages, it's about 40 to 50 percent of the retail price point. I know that sounds like a lot, but the product that I'm producing, um, after all the fees are said and done, I ended up walking away with around $6 a bag, a five bob, a five, $5 in change to be honest with so, um, by, by banking around $5 a bag and selling a few hundred bags a week. You can see how that adds up.

Okay. These do not price points that are bringing in 20 or 30 or $50 profit per transaction. But I'm selling the volume that I'm selling is enormous. So it makes up for that. Okay. Um, okay, so small standard size, fba fee, not the referral fee. Okay. Fba phase $2 and forty cents a large standard size, which is actually one pound or less. this again, you have a small and a large and it's going to be based upon the site itself. Uh, and they actually will measure the dimensions. Um, and then you have a large standard size, which is one to two pounds of that fee is for 18. Now when your get over two pounds, if you start to, let's say you make four different types of of season nuts and they're one pound each and you put them together and you've got four pounds and a package.

Okay. That would be considered a large standard size of over two pounds. And those fees are $4 and eighteen cents just like the one to two-pound size. Okay. But it's an additional thirty-nine cents for every pound over. Okay. So now you can see how the fees start to add up. But don't get discouraged because like we have a package, there's a package of a three pound a nut that we offer a certain type of that season a certain way, a three pound nothing. But we have a price point of like 24 slash 22 slash 99. Okay. So with the fees and the additional thirty eight cents plus the referral fee, that one we make around 11 to $12 profit for per transaction. Okay. so you can kind of see where that, that you know as far as the price point being higher and the weight going up. It's fine.

It's okay because of you. I'm going. What I mean by that is it's fine. It's okay. You can still make money selling that specific product. Okay. Just because you get that additional thirty-nine cents per pound over two pounds. Okay. You still have room to make margins if you're looking to make it. If you're not in the food business if you're in, let's say electronics, when you're selling $100 camera, you're selling cameras, accessories, and all these really high priced items. Obviously, you're, you're moving into a different category. Moving into a different margin. Okay? Yeah. You can walk away with two or $300, but I can't begin to tell you the number of people who sell cameras and cell camera accessories, the competition is just astronomical. Okay. That's one thing about. I didn't want it to tell you really quick. They're really advantaged that you have. This is really important.

If you've got the advantage to having a private label to producing your own food products, snacks, or kenny's in many cases, you're going to win the buy box. My box in a lot of the instances I checked, she checked the first thing this morning. I check our buy box rAtio, which is a percentage that you can check, uh, through amazon seller central. We get it about 95 to 96 percent of the buy box is. We went okay. And that's relatively high. It may sound kind of higher than you may think, but, um, I could actually show you literally, um, we're at about 150 to 200 products that we get the buy box 100 percent of the time. Um, and there, there specific items that we actually make that or we didn't reinvent the wheel. Okay. We're not creating something or added nothing other than air. It's just that they're products that are snacks or candies, but we just offered them in either a different flavor, a different color, different package size.

Uh, all these factors come into play when your customers wanting to buy something, you know, if I have a competition, I have a competitor that's selling it, you know, a 10 pack for $20 I can make it and sell 16 pack for $22. You're getting more and this maybe a dollar or two more. I ended up getting the buy box. Okay. That's one of the most awesome things about having a registered brand private label. Do it yourself. I mean all of that comes into play and we get it 95 percent this morning we checked it was 95 percent, so. All right, so now really quick back to the fba. Fulfillment fees. So small to large. So anywhere from less than a pound. So a little bit over two pounds. You're looking at about $2 and forty cents on the low size to about $4 and eighteen cents plus the additional thirty nine cents per pound.

Okay? So just keep those fees in mind. Now going into October, like I mentioned before, October, November, December, fourth quarter. Um, the prices for the small to large actually drop a. But they only drop up, I'm looking at the notes I made. It's around ten cents, twenty cents a unit, but you know, if you're selling a thousand units a month or you used to get yourself through several hundred units, fifteen cents adds up. Okay? So it does make a difference. So in October, December, you're looking at the small standard that's below less than one pound a, it goes from $2.40, one to 2:39, okay? if you're going to a large standard size, which is one pound or less, but the package dimensions are considered large. And I'll get into that a little while. That goes to two 80, eight to ninety-nine cents, eleven cents, okay. Um, and then you're going to the large standard size, over two pounds.

It from four, 18 down to three 96 and the per pound over two pounds, they start charging you per pound goes from thirty-nine cents to thirty-five cents. Okay? so you've got to, again, you're saving some money then that can accumulate. Trust me, it'll add up. So here are some examples. All right, so a large standard size, um, you've got free. It gives an example here, a large center, the size of one pound or less, like a tee shirt where you've got a dimension of eight and a half by five, almost by, by six inches, eight and a half by six inches by one inch, and it's a little bit over a quarter of a pound. Um, it's going to be around $3 and twenty-eight cents for the fee. The fba fee, not the referral fee. Keep that in mind. A referral fee is a percentage of your price point, okay?

You get the price point, they're going to take a percentage and you're going to get an fba fee tacked on. Okay? So keep those fees in mind. An oversized product. So now keep this in this again in mind. Again, you guys are watching my videos, you're probably food producers. You're making a food product. It's not really going to apply to you unless you're selling a 100-pound piece of candy, which is highly unlikely. I'm an oversized product to your price points. They start to get a much, much pricier than anywhere from like a $7 up to $140. If you've got special oversize of the fba, fulfillment fees can go up quite a bit. Okay. And that would, that would probably be like If you're, I don't know if you, if there's a lot of sellers doing this, but if you have an enormously large flat screen tvs or something in your fba, in it, the fees can get into nearly $200 or more for those types of products.

But again, your price point's higher too. So it's Kind of, you know. So as far as the price points and the fba fees, I'm just going through these notes really quick from what you're going to be packaging. The what I package and many of the caSes, the biggest thing I have gotten is like a two or three pound. Um, let me just close. This is like a two or three-pound package of nuts or snacks. Um, those are the fees you're looking at about two to $4 for those types of transactions. Okay. Um, when you're getting into something much, much bigger, which really wouldn't apply to you because most of the stuff that you're selling, if it's a ketchup with salsa, a candy or a snack, you're looking at about on the highest side, probably around $4 and change. Okay? Now remember it again when you're creating your price point, keep in mind there is a referral fee.

It's a percentage of that price point. Okay? As an example, this is just an example. If you've got a, you've got a $10, sorry about that. Excuse me, one second. If you've got a $10 item and you've got, you know, you're looking at like a one percent a fee for that. you're gonna be looking at like 10, 15, 12 percent or twelve cents. I'm Sorry, I'm so if it's like one and a quarter percent, one and a half percent, you know, 10 to twelve cents on top of that additional, um, excuse me, um, on top of the additional fba fees. SO just keep that in mind. Again, price points for your product or it takes into consideration and then the fba fees. Okay? So it's two separate fees and they come into play, um, so just keep that in mind, so I hope that explains it a little bit about the fba fees and how they work and based upon the size of the types of products that you're probably sending in, if you are sending stuff in or if you're thinking about sending stuff in most of your snacks and food products aren't going to weigh  20 or 30 pounds.

So that's a good thing. So remember that, and I hope you guys liked the video. If you did, if it was informative, do give me a thumbs up if you have any questions about fba fees, um, in regards to the category, the gourmet food and category, just let me know down below. I appreciate that. And thank you guys for subscribing. And remember, if you've got someone that you know who could benefit from my videos, please feel free to share them with them or let them know about my channel. Um, I've, uh, appreciate all the subscribers that you guys are watching my videos and giving me feedback. And again, lastly, really also really quick. I'm super excited about private labeling and the co-packing process. We are still working on that and again, I will do a video as soon as we are up and running with it. There's just a few things were kind of, some kinks that were working out and um, I'll let you guys know when that's available. And again, we're gonna offer. We're going to have an extensive list of products that we want to offer. Um, it, it's going to be well over 100 plus products. I'm not necessarily saying that you will obviously package all of those, but somewhere in there I'm sure there'll be a few things that you may be interested in and we'll let you know.