I was just going through a quick JS report and was shocked to find that my order fees amounted to 38% of total revenue. Seems like that is getting away from me, most likely due to cheaper items selling in higher volume.
Anyone have a set goal, in regards to FBA, for order costs as a ratio to set price?
Cheers!
Ryan
I think this is the wrong way to look at it. You should have a profit goal (either as a certain margin per unit or certain % margin or both) and that’s the only thing that really matters.
Totally. My issue is that my products vary greatly. My low volume are all margin, while my high volume are exactly that, volume. But the profit on high volume is tiny, and easily affected by cost changes – such as the new incoming charges – while my low volume has become even lower volume.
I’m hoping to fix the latter issue once I get the lower volume listings back in the correct category – amazon helped me by automatically moving me out of my correct category and therefore ending the sales – which didn’t make the percentage originally so brutal.
Case in point, my total margin selling about 45 units on Amazon is the same as my total margin selling about 3 to 5 units through eCommerce.
With AMazon increasing fees and finding other ways to charge while also having their bot tank active listings, I’ve been working to migrate back to eCommerce and start spending money there.
Generally when you’re paying someone 15 points off the top (vs about 3 - 5 points if you handle all payment processing yourself) it does tend to tank your margins. The issue for most people is getting any kind of volume off Amazon requires an investment they can’t afford.
True,
But when I first joined Amazon their savings in Shipment cost made it more than worth it. But in the past few years, my shipping costs have gone down when shipping on my accounts, and my Amazon shipping costs have gone sky high. That benefit is most definitely gone (and don’t even get me started on MCF, what a joke)