When you should and shouldn’t use Fulfilment by Amazon…

It’s hard to believe, but it’s five years since we started selling our books using the Fulfilment by Amazon programme (FBA).

When we first started FBA was a really great programme: very profitable, with much cheaper postage rates and Amazon dealing with customer queries on our behalf.When you should and shouldn’t use Fulfilment by Amazon…

However, I do feel many of the advantages have been eroded away over the last year or so: many of the fees and commissions charged by Amazon increase to levels that make profits much lower, for low-value sales especially.

I am sure FBA continues to be popular with customers – those with an Amazon Prime account will definitely use FBA for the free next day postage; and many of those without a Prime account continue to use Amazon’s Super Saver delivery service (although if they spend under £10 they have to pay an additional postage fee, which, by the way, the seller does not receive).

So in the main, volume of sales are consistent, but profits are affected in that Amazon’s pick and pack fees have increased significantly since the FBA programme first began.

Although, for higher-end priced items, FBA is still very much worth the effort of labelling and sending stock to Amazon’s fulfilment centres.

We are soon to go away to France for a few weeks on vacation – FBA will really come into its own for us then. Whilst we are away, Amazon will duly fulfil our orders, ensuring we still make some income, despite lazing around the pool and resting, not dispatching books to our customers.

However, in business, nothing stands still: it’s always important to review your business practices and ensure that you profit from your activity.

Therefore, we have begun to withdraw books from stock that have languished in Amazon’s centres for many years.

It’s not a cheap exercise: each item sent back costs 72p. But it’s not all bad: the packaging used to return the books is very good quality, so some of the cost is offset, due to using the packaging again.

The great thing is that we’ve found many of the books returned are successfully sold on eBay, and this ensures the return fee and all other costs are covered, and a profit is made with every sale too.

For example, a couple of weeks ago I recalled three books from the same genre from my Amazon FBA stock. I put them together as one lot on eBay and after all fees and other costs were deducted, including return fees and postage to the customer, I cleared over £7 in net profit.

This may not seem much but I think it’s a great result: what this sale means is that there is a saving, no more storage fees paid to keep them in Amazon’s fulfilment centre, and great packaging to use with further orders. The eBay customer was very happy with three quality bargain books they purchased.

Should I have kept them in Amazon’s centres and had they sold, profits would have been less than £2 in total, perhaps much, much less, depending on their size and weight.

So, in summary, is it worth sending books to Amazon to be sold under Amazon’s FBA programme? I would say ‘Yes and no’!

Personally I will only send stock with a starting value of £10. That price point means that non-Prime customers can purchase books and take advantage of Amazon’s Super Saver delivery without extra cost.

Also, Prime users can purchase my books too and receive them faster and benefit from any other advantages of subscribing to a Prime account.

So, FBA (I believe) is for a more selective type of selling: there is little point in sending low-value, fiction and popular non-fiction, as you will find many other FBA sellers practically giving the same books away, and it can be difficult to compete profitably.

My suggestion is to sort out your books – with low-value books (1p books) that weigh less than 500 grams and are large letter size, sell using the Merchant Seller scheme.

Non-fiction books that attract low value on Amazon (under 2kg and packet size), you can sell on eBay for a minimum of £4.99.

After all fees and costs, that will leave you at least £1 per book profit  (more if the books you sell are large letter size, as they cost less to send).

Sell ten per day and that’s at least £70 net profit per week and over £3500 per year.

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