• Amazon’s New FBA Small and Light Program

    You may have heard the term “FBA Small and Light” bouncing around discussion boards and the great echo-chamber that comprises Amazon. And, while it may sound enticing for consumers, you may not be aware of the advantages this program presents sellers. 

    If you currently sell or plan on selling a product that is under 15 oz. on Amazon, then the FBA Small and Light option can benefit you and your customers substantially.  

    But before we delve into how Amazon’s Small and Light program works, we need to understand how Fulfillment By Amazon works and incentivizes Prime Members. 

    WHAT IS FBA?

    So, you have built and grown a sustainable business from what started as an idea on a napkin at a bar one night. Two years later and you have tons of inventory with tons of demand and tons of places around the world to send that inventory. 

    You have the option of storing, packaging, mailing, and replenishing your product yourself or you can utilize Amazon’s “Fulfilled By Amazon” program (also known as FBA.) If you are currently selling on Amazon, you’ve more than likely heard of this option and, if you have only been a consumer on Amazon, you’ve probably been affected by it.

    THE ADVANTAGES OF USING FBA IF YOU ARE A SELLER

    If you are a seller on Amazon, you have the option of storing your products in Amazon’s fulfillment centers instead of housing them yourself. The advantage of doing this is that you pretty much relinquish any responsibility involving the mundane, “back-of-the-house” work that goes into a successful business.  FBA Small and Light

    With FBA, when an order is made, Amazon will pick it, pack it, ship it, and provide customer service for these products.  

    Furthermore, Amazon also takes on the responsibility of replacing damaged goods and returns, freeing you to focus on the fun part of owning a business and not the nitty-gritty.  

    If you choose to enlist in the FBA program, your product automatically becomes eligible for the Amazon Prime Program which guarantees 2-day, free shipping on your product to Prime Members. 

    It’s a win-win for customers and sellers.

    HOW MUCH DOES FBA COST? 

    How much you pay for Amazon to do the heavy lifting (literally and figuratively) is determined by four separate factors: 

    FBA Small and Light
    *Not all fees apply to every person. It can vary depending on your product and what services you opt for.

    WHAT ABOUT THE $25 PURCHASE MINIMUM FOR FREE SHIPPING?

    Where it gets tricky is if your product is small, light, or inexpensive.

    The stipulation with Prime members getting free shipping is that the total amount spent must exceed $25. This makes sense because shipping is expensive and if the consumer isn’t paying for it, that means Amazon is paying for it, and Amazon isn’t about to lose money because their shipping costs exceed their profit margins.

    Plus, you as the seller lose money because the referral and fulfillment fees you pay for FBA will exceed the 7 dollars a Prime customer spent on your product. Paying high shipping fees for a product that doesn’t cost much is just bad business.

    The only positive about this $25 minimum stipulation for sellers is that consumers are more likely to “add on”cheaper items to their original purchase. Consumers do this to meet the requirement without having to invest too much money on stuff they don’t want or need. If you happen to sell inexpensive, everyday items, your sales could potentially go up just from “add-on,” compulsive buys.

    FBA Small and Light
    “Well, since I haven’t met my $25 minimum for free shipping, I guess I’ll buy this pet rock I’ve had my eyes on for awhile now.”

    BUT, PER THE NATURE OF AMAZON, THE RULES ARE CHANGING AGAIN

    Now, sellers can enroll in the FBA “Small and Light” program, a new feature Amazon is offering to sellers so that Prime members don’t need to meet the $25 quota for free shipping.

    With FBA Small and Light, Prime customers automatically qualify for FREE standard shipping (4 to 5 business days). Non-Prime customers continue to get FREE shipping (6 to 8 business days) without a minimum order requirement. 

    But really this program benefits sellers just as much as it does buyers.

    How? 

    USPS and Amazon’s partnership has resulted in Amazon receiving subsidies for shipping.  This means that the price of shipping smaller products has downscaled substantially, driving down the FBA fees that exist on these products. The Small and Light program helps reduce the cost of fulfillments that sellers pay, allowing sellers to maintain good profit margins for their business.

    FBA Small and Light
    Fees for sellers that participate in the FBA Small and Light Program

    HOW DO I SIGN UP FOR THE FBA SMALL AND LIGHT PROGRAM?

    1. First you have to be an FBA seller. If you aren’t already, sign up for the program here.

    2. Create new offers for your products, or enroll existing, self-fulfilled MSKUs in the Small and Light program.

    FBA Small and Light

    3. Make sure you qualify for the Small and Light Program first, then you can enroll. You can find a comprehensive step-by-self  instructions on how to do this here.

    4. Prepare and ship no less than 24 units of your product to a specified Amazon fulfillment center.

    5. Enable replenishment alerts, and receive notifications before you go out of stock.

    WHAT ARE THE PRODUCT REQUIREMENTS TO ENLIST IN THE PROGRAM?

    FBA Small and Light

    Essentially, the FBA Small and Light incentive is great for your business if your product meets the requirements. Not only does the program drive down your shipping costs, but it also guarantees more exposure of your product.  We encourage anyone who doesn’t already pay for this program to enlist, and now is a better time than ever with the holidays right around the corner. 

Copyright © 2021 markethustl.com

X