Non-experienced merchants do not know exactly their costs and have no idea of how much they can benefit from bringing a new product to market. That is why there is an Amazon FBA calculator with which one could estimate the costs and understand what price should be set. Let’s talk about it in more detail.
What is Fulfillment by Amazon?
Fulfillment by Amazon or FBA for short is a special program to provide Amazon warehouse space and services for third-party marketplace sellers. You exhibit your products on Amazon, send the products to FBA warehouses, and the marketplace takes over most of the time-consuming processes. Your task is marketing, ensuring the production of goods, and delivering them to the country of sale. And most importantly – you get the opportunity to scale your business.
Everyone Can Evaluate the Profit on Amazon even Before the Goods Are Shipped
There are many FBA Amazon calculators from different developers. Which one to choose is a matter of experience and preference. But all such calculators work according to the same algorithm. It is based on Amazon tariffs, and therefore, the results on such calculators will be similar. You can notice a difference only in the interfaces.
But always remember that all data obtained from such calculators are estimates, and in no case should you fully rely on them. With their help, you can only estimate your costs and understand whether your idea is a commercial success or not. More precisely, how much your product should cost approximately and what the first batch you can purchase is.
Advantages and Disadvantages of the FBA Program
Benefits of the FBA program
Your customers get superfast service
As a rule, the speed of order processing in Amazon centers is much higher than in alternatives and even more so compared to ordering alone.
Free shipping for Prime buyers
Prime buyers can get the ordered goods for free, and there are already more than 103 million of them in the United States alone. These are people who regularly shop on Amazon to take full advantage of paid participation in the Prime program.
More chance to get a Buy Box button
If there are several sellers on the product page who represent a similar product, the “Buy” button is more often associated with the store of the seller who uses the FBA program.
Savings on employees
Using FBA leads to the easier organization of the business and the possibility to run it completely remotely.
Each seller on Amazon has its own rating on which the visibility of the product in the search on the platform depends and which is influenced by customer feedback. So, when using the FBA service, all the negative aspects due to delays in delivery of goods fall on Amazon, not the seller’s rating.
Disadvantages of the FBA program
- High cost of maintenance and inability to influence it.
- Irrational use of FBA for heavy and bulky goods, including large appliances, fragile items, etc.
- Special requirements for the packaging of goods imposed by the FBA program as well as the inability to brand the packaging in which the goods are delivered and invest in promotional products.
Of course, the relatively high cost can scare off some small shops, but we think that the benefits of the program are worth it. So, we can see that the FBA program is a good tool for novice salespeople to do their businesses right. FBA will help to properly build the direction of work and business development, and tools, such as the Amazon FBA calculator, correctly adjust the nuances of the budget and make your business as profitable as you could dream.