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Amazon Fulfillment

by birclore
5 replies
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Hey guys,

Can anyone give me some insight on their experience with Amazon Fulfillment?

I have a dropshipping agreement with a hat manufacturer from Italy right now. They give me the wholesaler discount even though I only order one item at a time for my customers. The product is great and I can sell a lot of them but the main issue is that the shipping cost is so expensive per individual item, it's really hard to make a decent margin (shipping cost is almost 100% per item and they aren't even heavy).

I am considering purchasing a large bulk order of about 500 items and then storing in Amazon Warehouse.

Is there a minimum volume I should be selling per month in order to move to my own fulfillment center?

E.g. Let's say I sell 20 hats/month. Each hat is wholesale $20 + $20 shipping from Italy for a total of $40. I retail the hat for $60 with included shipping cost.

Would a scenario like this make sense to go to Amazon fulfillment if I can reduce my cost of the hat to $25 (extra profit of $300)? Or do you need to be selling WAY more volume?

Thanks
#amazon #fulfillment
  • Profile picture of the author BJewels
    They charge for storage of some items so you have to consider how that impacts your profits.
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  • Profile picture of the author outsourcingphilippines
    Hello, FBA is great for high margin items. The reason is they provide increase visibility on amazon which in turn transfers to more sales. They also upgrade your listings and offer Amazon prime to all of your customers, and also customer support is included with FBA. Shipping is also included in the cost of the ordering price. I would do more research and talk to an amazon rep. Which Amazon marketplace are you selling on by the way? Let me know if you have anymore questions.

    Good luck

    - Carlo
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    Helping your business grow 1 day at a time! We are a Internet/E-commerce outsourcing firm based in the Philippines. Visit our site for more information on how we can save you up to 70% on labor costs. 2ndoffice.co

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  • Profile picture of the author Andy777
    [DELETED]
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    • Profile picture of the author birclore
      Originally Posted by Andy777 View Post


      By quickly going over your numbers, it's obvious that you should switch to a fulfilment house. You'll make more money per hat + will be able to offer quicker delivery for your customers, which should even further increase your sales.
      Can you give me an example of the ideal product to use a fulfillment service for? In your blog you mention that it's not ideal for small cheap items (e.g. craft supplies). You think hats are okay (at 50 USD with $25 margin)?
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      • Profile picture of the author Andy777
        Originally Posted by birclore View Post

        Can you give me an example of the ideal product to use a fulfillment service for? In your blog you mention that it's not ideal for small cheap items (e.g. craft supplies). You think hats are okay (at 50 USD with $25 margin)?
        Yes., $25 margin is enough.

        You can't use fulfilment houses with products that cost just few $ or even less.
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  • Profile picture of the author edwinsean
    Hi Andrew, I am selling pre owned books and comic books in Amazon.com..I got some sales but I am considering going the FBA way..My price for the books and comic books is around $10-$25..What can you suggest..By the way, I am doing this from Singapore..
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