For seasoned Amazon sellers, it is a common knowledge that FBA Program can offer great benefits to a merchant who sells products on Amazon platform. Fulfillment by Amazon handles the task of reaching out to customers, providing service, delivering the product to a buyer, and taking charge of other services including handling returned merchandise and replacing them within 24 hours. FBA Program is the perfect choice for those entrepreneurs who want to make the most of their time.
The traditional FBA program sets a standard fulfillment fee to every product sold. Sellers who are selling products which cost lower than $10 may not be able to make a profit if they are charged based on this standard fulfillment fee. Why? If you sell an item for less than $10 and you are charged with the standard fulfillment fee, your profit will most likely go to the fulfillment and other fees. Thus, it will leave you with almost nothing.
Such an approach would discourage potential merchants who are planning to pursue their business with Amazon. As an Amazon seller, your aim is to grow your business and generate more profit from sales. However, the traditional FBA program may not deliver the desired result.
Taking this into consideration, Amazon has come up with the new policy - the Fulfillment by Amazon Small and Light Program. With FBA Light and Small, sellers who have small products priced under $10 will no longer be required to pay the standard fee. Instead, they will follow the new schedule of fees under the FBA Small and Light Program. With this program, sellers can enjoy high-profit margins without sacrificing other areas such as competitiveness on the part of the seller and convenience on the part of the buyer.
Advantages of Using the FBA Small and Light Program
The benefits of the FBA Small and Light program do not only affect the merchants but the customers as well.
Products enrolled in the FBA Small and Light are Prime eligible, meaning Prime members can avail of free shipping within 4 to 5 business days. Non-Prime customers can avail of the free shipping for merchandise (6 to 8 business days). Though it may not as fast as the traditional FBA Program which offers free shipping within 2 business days, it would still be advantageous on the part of the buyer as they no longer need to wait for the $25 minimum purchase before they can avail of the free delivery. Such policy will not only give due benefit to the buyers but to the sellers as well.
Imagine, having the item of your choice delivered on your doorstep for free without the need to reach a certain point of purchase?
Because of the specialized system under the FBA Small and Light Program, sellers offering small and light products with a price below $10 can now enjoy higher profit margins. Thereby giving greater chances to those small-scale sellers to maximize their earning potentials.
Another advantage of using the system is the easy-to-use site. We can also to check our inventories using any device from any location. We can set reminders as to when we should replenish our inventories, thereby allowing us to send more items before we run out of products. In business, the availability of items is one of the most important things to consider following the marketing strategy.
Moreover, can be assured that our products are being shown to great numbers of potential buyers giving us an opportunity to present our products to a larger number of audiences. Ultimately, customers’ concerns are being taken cared of in a speedy manner, thus the possibility of creating loyal customers is great.
What Products Are Eligible for the FBA Small and Light?
As the name suggests, FBA Small and Light covers products that weigh less, small and price below $10. Under this scheme, the following products are eligible
- Customer price of $10 or less
- Product size must not be more than 16” x 9” x 4”
- The product should weigh not more than 15 ounces (.42 Kg)
Aside from the above-mentioned items, it is also important to take note of the following guidelines to see what are and what are not allowed in the FBA Small and Light Program:
- Hazardous products and adult materials allowed with FBA Small and Light Program
- Temperature-sensitive or products which has an immediate reaction to the change in temperature such as chocolates are not allowed
- All products enrolled in the program must be brand new
- Products must either be a brand-new Amazon Special Identification Number (ASIN) or a product with at least 10 units sold each month 90 days or more for those with existing ASIN
- Amazon barcode with FBA offers must be attached to the items (manufacturer barcodes are not allowed)
- Products must be properly labeled and packed based on the FBA Small and Light Prep Guide.
An update from Amazon Company has been released on March 27, 2018, with the subject, Expanded Eligibility of FBA Small and Light. As mentioned in the letter addressed to all sellers of Amazon, Media products, and expiration-dated products are now eligible for Fulfillment by Amazon (FBA) small and light program. Mentioned further that products listed under the FBA Small and Light Amazon program can be purchased even in small quantities and are not classified as add-on items.
The Fulfillment by Amazon Small and Light Fees
There are three types of fees collected which can vary depending on the size, weight and how long the product stays in the fulfillment center.
- Fulfillment Fees – includes order handling, pick and pack and weight handling
- Inventory Storage Fees – charged monthly and based on the size of the product
- Optional Services – prep service fees, removing or disposing of inventory
Here is a sample computation for the FBA Small and Light and the Regular FBA:
|Fulfillment Fee||Small and Light||FBA Standard Size|
|Order handling||$0.80 per order||Small (1lb or less) $2.41|
|Pick and Pack||$0.75 per order|
|Weight Handling (unit weight + packaging weight2)||$0.11 per oz.|
Looking closely on the sample computation above, we can clearly see that the FBA Small and Light program offers great savings on fees that would benefit the seller who can pass it on to the customers by offering a much lower price for the item. One of the benefits of pricing the product competitively is developing loyal customers, thus creating more sales and more profit.
Tips to Get More Benefits from Using FBA Small and Light
To reap the maximum benefit of the program, the following suggestions could be considered.
1. Follow the Packaging Requirements. Amazon provides the Unique Program requirements as follows:
- Under the FBA Small and Light program, each unit should weigh less than or equal to 15 ounces, and has a dimension of less than or equal to 16” x 9” x 4”
- Each shipment must contain a minimum of 24 Amazon Special Identification (ASIN)
- Make sure to bundle together all units with the same ASIN using a clear plastic bag.
- Label the plastic with the total quantity of sellable units
- A scannable UPC or EAN manufacturer barcode must be present at every sellable unit.
In the absence of such, barcode must be printed at the Amazon and apply to the unit during shipment creation.
Moreover, don’t forget that shipping boxes must be equal to or less than 25 inches on any side. Also, it must not weigh more than 50 pounds.
Following the guideline set forth by the company will not only save on time but will also facilitate the faster shipment and turnover of goods from the seller, to the fulfillment centers and then to the customers. Any inappropriate action may cause for the delay in the process. Which means an effect on the sales.
- Another way of maximizing the benefits with the FBA small and Light Program is to send as many products as you can to make use of the space in every package. This way, it would not only save you in terms of postage fees but as well as time. There is no limit on how many items you can send so long as it follows the standard requirements for shipping. Learning how to make a small light packaging will be an added advantage.
3. Price your items competitively. Always monitor how the competitors are doing. This will ensure that you are knowledgeable of the things that are happening and can make necessary adjustment when needed.
4. Create and improve product listing. Having a well-presented product can make a lot of difference. Buyers are always on the lookout of good products in the market. Having a good product description can do great things. Request product review rating from customers who a bought product to see at which part you are doing great and which area you should make necessary improvements. The product review rating is available at the site in the form of 1-5 stars rating system.
Monitor The Quality of Your Product Listings
The quality of your product listing is one of the most important factors when talking about a product's competitiveness. Of course, having great photos and nicely-crafted bullet points is a must-have, but more product reviews you have - more information will be given to your potential customers to help them make a confident purchasing decision. Using SageMailer, you can automatically send a follow-up email to all your customers asking them to leave a feedback in the form of a product review. You can try this system right now, no risk, no card required, all new users get a free 21-day trial. Just give it a try!
How to Start on FBA Small and Light Program
1. Join the program.
The very first thing you can do is to join the Fulfillment by Amazon Program. If you are not yet an Amazon seller, go to Amazon.com and create a seller account. You may now enroll in the FBA and start your business.
2. Select which items you want to include in the FBA Small and Light program.
You need to fill up and submit an enrollment at the FBA Small and Light Enrollment Guide.
3. Enroll eligible products to the program.
Enroll your eligible products to the FBA Small and Light Program.
4. Send your inventory.
See to it that you follow the necessary requirements in sending your inventory. Inability to follow instructions might lead to delay or even greater problems. Complying with the terms is an important part of selling.
5. Stay stocked.
Having enough items in your inventory is crucial in the selling business. With Fulfillment by Amazon Small and Light, you can enable replenishment alert to know before you run out of stocks.
6. Explore private labeling.
Private labeling products are brands owned by the seller. The seller may not always be the manufacturer of the product. The advantage of private labeling is the higher profit margin and having the exclusive right to sell the products.
7. Consider Retail Arbitrage
Retail arbitrage is the act of finding items from different stores and reselling the same to other stores like Amazon for profit. A seller may buy product from other online retailer such as Alibaba and sell those items to Amazon.
Selling on Amazon is no doubt a timely and lucrative business any individual with entrepreneurial skill could pursue. Every day, the number of people who rely on this company for their shopping needs is continuously increasing, making Amazon selling a profitable business. With the help of the right program, continuous improvement, and effective marketing strategies, you can ensure the success of your brand on Amazon.