How I Saved $500 for My Client with Amazon FBA Small and Light Program
Introduction:
In the world of e-commerce, cost optimization plays a crucial role in ensuring profitability and competitiveness. As an Amazon FBA (Fulfillment by Amazon) expert, I had the privilege of helping my client save a significant amount of money, amounting to $500, by leveraging the power of the Amazon FBA Small and Light program. In this blog post, I will share the story of how I achieved these savings and provide insights into the benefits of the program. Additionally, I will discuss eligibility criteria and present two case studies—one showcasing substantial profit and the other highlighting a potential loss.
Why FBA Small and Light?
The Amazon FBA Small and Light program offers numerous advantages for sellers, especially those dealing with lightweight and low-cost products. By participating in this program, sellers can reduce their fulfilment costs and offer competitive pricing to customers. The program’s benefits include lower fulfilment fees, reduced storage costs, improved product visibility, and access to Amazon Prime’s fast shipping options. These advantages make the Small and light program an attractive option for sellers looking to enhance profitability and customer satisfaction.
Product Eligibility:
To participate in the FBA Small and Light program, products must meet certain eligibility criteria.
Products must meet all three conditions:
- Measure 18 length x 14 width x 8 height or less in inches
- Shipping weights should be 3 lb
- Priced $12 or less
Not Eligible Product:
The product types below are not eligible.
- Restricted products
- FBA prohibited products
- Adult products
- Dangerous goods identification guide (hazmat)
- Temperature-sensitive products (such as chocolates)
Product Fee:
Products enrolled in the Small and Light program have reduced fulfillment fees as shown below. All other standard selling on Amazon fees and FBA fees still apply.
Size tier | Shipping weight1 | Dimensions | Small and Light fulfillment fee per unit |
Small standard | 4 oz or less | 15 x 12 x 0.75 inches or less | $2.47 |
4+ to 8 oz | $2.54 | ||
8+ to 12 oz | $2.61 | ||
12+ to 16 oz | $3.15 | ||
Large standard | 4 oz or less | 18 x 14 x 8 inches or less | $2.66 |
4+ to 8 oz | $2.77 | ||
8+ to 12 oz | $2.94 | ||
12+ to 16 oz | $3.77 | ||
16 oz+ to 1.5 lb | $4.42 | ||
1.5+ to 2 lb | $4.68 | ||
2+ to 2.5 lb | $5.19 | ||
2.5+ to 3 lb | $5.40 |
Case Study 1: Profit – Saving $500:
In this case study, you can see the dimension and weight passed the eligible criteria and the selling price was lower than $12 in this case it was $11.45, you can see the FBA fee before enrolling into the program is $5.43 so overall cost of the product was $7.13 and the profit was $4.32 so once the product is enrolled in the FBA small and light program you can see the FBA fee decreased to $4.38 so overall profit was $5.37 which is around $1 savings. So approximately this product was selling 500 units per month so that you can see the total amount saved was $500.
Case Study 2: A Remarkable 40% Increase in Sales Volume
Upon careful analysis, it was apparent that all eligibility criteria for the Amazon FBA Small and Light program were met for this product, with the exception of the price point. Therefore, a strategic decision was made to reduce the product price from $14.99 to $11.99 to align with the program’s pricing guidelines.
Following enrollment in the program, a noticeable reduction in the Amazon fulfillment fees was observed. This allowed us to absorb the lowered price without significantly impacting our profit margin. The decrease in individual product profit was minimal, amounting to only $0.40 per item when compared to the profit margin prior to enrollment.
However, the more significant outcome of this decision was the remarkable surge in sales volume – an impressive increase of 40%. This upswing in sales volume effectively augmented our overall profit, demonstrating that a slight decrease in individual unit profit could be outweighed by a significant increase in sales. This is a testament to the strategic benefits of the Amazon FBA Small and Light program.
Conclusion:
Utilizing the Amazon FBA Small and Light program can result in substantial savings and increased sales, as demonstrated in the case studies of my client’s experience. By adhering to the program’s eligibility criteria and strategically adjusting product pricing, sellers can take advantage of lower fulfillment and storage costs while offering competitive pricing and rapid shipping to their customers. However, it is essential to conduct a thorough analysis and take into account all potential factors that could affect profitability before making any decisions. Even a slight decrease in individual product profit can be offset by an overall surge in sales volume. The case studies illustrate how, with careful planning and strategic decision-making, the Amazon FBA Small and Light program can be an effective tool in enhancing profitability and competitiveness in the e-commerce marketplace.
