What is treasury management? Find out in this helpful guide to companies trading overseas.
Want to grow your business, but simply don’t have the time to start shipping an increased volume of inventory? Or want to start bringing your products to an overseas market, but you don’t speak the local language needed to manage listings, and deal with customer care in another country? Then Amazon may be able to help.
Fulfillment by Amazon (FBA) is a popular way to help online sellers scale and grow their business. If you’re new to ecommerce, or only just thinking of expanding your operations, you may be wondering: what does FBA mean? And - more importantly - what ‘Fulfillment by Amazon’ fees do I need to pay to use the service? This guide has you covered.
We’ll also touch on how a multi-currency business account with Wise, can save you money, as you expand overseas. But first, let’s discuss how FBA works in practice.
In short, FBA is a service which allows you to send your products in bulk to an Amazon fulfillment centre, and have the Amazon team take care of all shipping logistics, including customer care and returns. We’ll take some time in this article to look at the FBA costs - and whether or not it’s a service worth paying for.
If you use FBA services, you’ll be able to sell your products to a broader audience across Europe, with Amazon taking care of all of the picking, packing and shipping, as well as customer care. Here’s how it works:
- Log into your Amazon seller account and select Fulfillment by Amazon when listing your products. You’ll then need to follow the on-screen prompts to complete the listing process.
- Send your inventory to an Amazon fulfillment centre - you can either use your own chosen carrier or choose an Amazon partner to complete this step.
- Your products are listed online, and marked as Fulfilled by Amazon. Eligible products are also given the Prime badge, which may mean customers get free shipping.²
- Amazon then ships your products to customers all over Europe.
- The local Amazon teams throughout Europe take care of customer service, refunds and returns, all in the local language, meaning you can continue to offer top level customer service as you expand overseas.¹
If decide to use Amazon FBA you’ll pay a fee. However, for many businesses this is worthwhile because it opens up opportunities that may not otherwise be available. Nevertheless, you shouldn’t pay more than you should, when paying suppliers abroad and receiving payments from international clients. 19x cheaper than PayPal, Wise Business offer services that can save you money by always giving you the real exchange rate and low, transparent fees. More on that in a moment.
|Join those already saving with a Wise Business account. Get started with you account today!|
Amazon’s FBA fees are based on a few different factors. There are fees for both storing and shipping your products, which can be broadly based on the size and weight of the items, as well as the channels you’re selling on.
Before you decide if FBA is right for your business, you’ll need to think about the full range of costs you may incur. This can be somewhat complex, but there are some fee calculator resources available to help - more on that coming right up.
Here’s what you need to know:
|Service||Amazon FBA UK fees|
|Fulfillment fees||Calculated based on the size, weight and value of the item being shipped.³ As an example, small letter sized items, weighing under 92g, and selling for under £9 will cost £0.60 in fulfillment fees. An item which falls into the ‘small oversize’ category, weighing up to 760g, sold in the UK only, will cost £3.82. If you want to sell the same item in Europe, you may choose to do so by fulfilling the order from a UK warehouse, which costs EUR 11.08, or from one of Amazon’s European fulfillment centres, starting from EUR 4.62.|
|Storage fees|| You’ll pay for storage based on size and season - meaning you’ll pay per cubic foot and per month, with different fees for high and low seasons. High season is October to December, with low season running January to September. Here are the costs per cubic foot, per month, for different items: |
|Other services you can buy from Amazon FBA|| Aside from shipping and storage you can also buy a range of other products and services, including: |
*All example estimates are based on estimations made via Amazon fulfillment cost calculator on 14/08/2019. Always check providers site for up-to-date information
Amazon provides a few useful tools to help you navigate their fees, so that you can easily work out if the service makes sense for your business.
You can use the resources on the Amazon UK website to calculate the fulfillment costs for your items in different marketplaces. Or you can choose to use an alternative online tool to give you a picture of the full costs of using Amazon FBA, including fulfillment, shipping and other services you might need. Try this Amazon FBA calculator to give you a starting point.
As you grow and start to deal with more customers and suppliers based overseas, you’ll need a smart way to receive and send international payments. Wise are here to help.
Wise Business is a digital account, that includes practical solutions for busy entrepreneurs, including Xero integration to keep your accounts up to date, and access to a great open API to automate workflow.
Send international payments at the real market exchange rate with low transparent fees, to save on payments abroad. You’ll also be able to hold +40 currencies, to send and spend - always using the real exchange rate. As well as getting your own local account details to receive payments for the UK, US, Australia, New Zealand, the Euro area and 5 more currencies.
Get started with you account today! And, start doing business without borders.
Still wondering if FBA is for you? Here are a few of the benefits to consider:
- Make shipping simple, all over Europe.
- Offer excellent customer service in multiple languages.
- Store your product safely, and access as much space as you need as your business grows.
- Amazon manage your returns and refunds, so you don’t have to.
- FBA may offer faster delivery times for your customers - keeping them happy.*
*Some items may be eligible for Prime service - meaning faster, maybe even free delivery for customers.
Amazon’s FBA service is ideal for businesses looking to scale, and reach broader markets within Europe. Once you start working with international customers, you’ll also have to think about the most cost effective ways to receive overseas payments. Getting a smart multi-currency account which lets you receive money in a range of different currencies is a great way to make it convenient for your customers to pay - and save you money on currency conversion fees.
Don’t forget to think about how to maximise your profits from overseas sales by getting a good multi-currency account, to cut your currency conversion and international transfer fees. TheWise borderless account could be the perfect partner to help you grow your business into new European markets.
Sources checked: 26-August-2019.
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from Wise Payments Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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