Running an FBA (Fulfilled By Amazon) business is a great way to make money. It does, however, take a lot of patience, research, and perseverance to succeed. And there are times when you will be struggling to increase sales to break a profit. The first year can be quite tough.
To help get through these lean times, it makes sense to try to cut costs so you can be more competitive with pricing or to simply keep more money in your pocket. Dealing with Amazon can also be quite unpredictable so having some control over the cashflow is going to help at some point.
In this article, we will go over several ways to save on expenses when running your FBA business.
There are two main phases of the shipping process when getting products to the fulfillment centers. When dealing with factories overseas, the inventory has to be picked up and then put on shipping containers to arrive in the United States. This is the main courier that has to be hired.
Then, once it arrives in the US, it goes through customs and has to be picked up by another company to be brought to the warehouse.
It pays off to shop around and look for the best rates for containers when starting the process to get the goods to the fulfillment centers. Not only are you looking for a good price, but you also want it to be fast. The sooner it arrives and gets processed then the sooner it can start selling.
You should be looking for a same day cargo quote for when it clears customs so you can save some money but also get the inventory moving as soon as possible.
Reduce the size
Storage fees are what can do in a new seller that isn’t moving inventory quickly enough. One factor that contributes to higher fees is the size of the unit. One of the best ways to keep these fees low is to make sure the packaging for the product is not oversized. If there is a way for the product to be sent and put together by the buyer to save space then this should be done.
Sometimes the dimensions of the product are not registered correctly by Amazon when it is processed at the fulfillment center. Make sure they have the correct dimensions and manually override their numbers if they are incorrect.
When you have multiple products for sale, try to bundle them together to form one package if they are related enough. This will help reduce how much inventory is spread out in the warehouses. Or, make a deal on the price to sell two or three for a discount when bought together.
This is usually a good strategy to keep products moving out of the fulfillment center and reduce the storage fees. Products that need to be used over and over are natural selections for bundles as it saves people time and money to buy more than one at a time.