I’m primarily FBM for 99% of my SKUs but trying to put one of my top sellers into FBA. In the past I’ve sent in smaller boxed units into FBA but nothing oversized and need some help because I’ve never done LTL shipments.
The box dimensions are 21x12x7 in. at 11 pounds each. Currently selling about 100-120 units a month so my plan was to ship around 200 units to start. The max amount of units per pallet is 60.
When I change the shipping plan to do 5 pallets with 40 units on each - the “Amazon-optimized option” is more expensive. Any general tips or feedback when doing pallets into FBA?
(Both below are “Partial Splits” and the lowest cost option for each amount of pallets)
180 units = 3 pallets (60 units per pallet)
Total: $1,031.49
Placement Fee: $145.80
Estimated Shipping Cost*: $885.69
$4.26 / unit
200 units = 5 pallets (40 units per pallet)
Total: $1,026.49
Placement Fee: $162.00
Estimated Shipping Cost*: $864.49
$5.13 / unit
Side note: How in the hell do all of these sellers with 100+ SKUs do FBA for every single one of them? I can’t picture being able to handle just FBA logistics for that many SKUs.
Why do you have a Placement Fee with the 5-split Amazon-optimized?
Do you have to make more than 5 splits to remove the placement fee?
When I do a 5-split, it shows $0.00 placement.
FBA manual processing fee: $0.00
Total inbound placement service fees: $0.00
Amazon partnered carrier cost: $111.11 (fake number)
Besides the placement fee, I have noticed that Amazon uses an incorrect freight class all the time for our pallets.
After the pallet(s) are built and wrapped, then I measure and weigh each pallet and determine the correct freight class. The shipping fee rate drops greatly when I lower the class.
So the core question is not if you have the fee but is the fee cheaper if you ship to one destination rather than 5. Its an either or option. For example, yesterday we had a 29 pallet total shipment made to get several SKU’s over the 5 pallet mark, it ended up being cheaper to pay Amazon the $3288.96 instead of paying 5 different carriers to 5 different locations by well over $1000.
It all depends on the destination spread and carrier costs. We opted to save $1000 and chose one carrier to go to California and have Amazon distribute it instead.
Well, one advantage is the cost of shipping drops when you use LTL versus SPD. Kind of makes the fee irrelevant when the economies of scale kick in when you look at cost per pound. The more SKU’s you can put on an LTL shipment the better the economies of scale. We actually cull items that do not get us to the LTL volume or we bump the inventory up and expect some inventory storage fees versus SPD costs.
Something is off, like @Old-Timer pointed out, there should not be a fee at the 5 pallet shipment as you can see in my above screenshot.
Somewhat unrelated but Amazon freight was unavailable as the carrier on 4 of 5 pallets for a shipment we created last week regardless of how long we waited for pickup. Don’t recall ever seeing this before. Was created well in advance of the storm.
Hope AMZ is just backed up and this isn’t the new normal. Cost was nearly 3X what it should be but was still way cheaper than paying placement fees due to the overall unit count.
I’m also a firm believer (I’ve watched a couple shipments to test the theory) that when you split, you do get into more FC’s, which = better conversion. So saving $ on the front end could cost you on the backend. This might be more a factor for what we sell vs. what you do.
We are loading up post-high-fee winter drawdown. We have 45-60 days of inventory for everything, but are getting ready for when farmers can stop plowing ice and actually grow stuff, so we are somewhat exempt from your very accurate point about inventory not being available due to slow distribution times. We also never trust Amazon with a single large shipment because that will be the one they loose or put in the back parking lot for 5 months, so there will be another batch in about 15 days which we will be smaller and split.
You make a great point for those reading that may not plus up or down for seasonal changes.
Never rely on historical single shipment receive times for Amazon, as that will be the time they F it all up or receive it incorrectly and mislabel all your stuff and force you to pay to ship your stuff back to yourself to fix their error.
