Amazon Australia launched some time back and introduced FBA for sellers on Amazon starting with a fulfillment center in Melbourne. It is a great opportunity for Australian retailers to take advantage of Amazon’s presence and reach out to buyers across the continent. However, care must be exercised in pricing a product and knowing returns in this emerging Amazon marketplace.
The Australian Scenario
Australia is a large continent-nation and it is not densely populated. This makes logistics more expensive than in other countries due to distances involved and due to fewer numbers of buyers. If you are selling low-value items that are competitively priced then you need to be very precise in pricing and in knowing your margins. Even otherwise, one cannot expect high volume sales on Amazon
Australia marketplace in the beginning. For these and other reasons, one must use the
Amazon FBA calculator Australia to know cost incidence and the exact amount payable to Amazon for fulfillment.
The Amazon FBA model
FBA is a decided advantage but it does involve costs. Sellers on Amazon must pay a monthly subscription fee. Then there are FBA fees on Amazon Australia comprised of storage fees and fulfillment fees. The latter is a flat fee based on product category, weight and dimensions. For example, a product weighing 600 grams could attract a fulfillment fee of $ 6 or more, which can be precisely calculated using Amazon FBA calculator Australia. The storage fees are charged per cubic meter per month. If products remain in the Amazon warehouse for more than a year then the additional fee is levied. Then there are returns to consider. All these factors must be taken into account when you fix your landed cost, consider Amazon FBA fees and your profit in order to fix a selling price on Amazon Australia. One must also consider a tax on Amazon fees. By using the Amazon Australia FBA calculator you will know in advance whether you will make a profit and whether a product is worth selling on Amazon Australia or not.
Pricing
People in
Australia, as in any other country, will buy from Amazon
Australia only if the price is competitive and they have a guarantee of top quality service in the matter of returns and refunds. Amazon FBA assures confidence in buyers but sellers also need to fix a price that is in line with what other sellers are charging for the same product. You can price a product with wafer-thin margins provided you are assured of high volume sales. How thin a margin you can keep can be arrived at by using the
Amazon FBA calculator Australia. You can play “what if” by selecting various price points, going as low as you dare, basing this on expected volumes you can achieve by research on Amazon or other sites or with the help of Digicommerce, Amazon e-commerce enabler.
Established brick and mortar retailers wishing to join Amazon FBA would do well to carry out a detailed study of profit and loss using the Australia Amazon FBA calculator. Those who are thinking of starting their own store on Amazon marketplace will benefit equally in that the pricing calculator helps them know not only the profit or loss in a transaction but also indirectly about selecting the right product category.
Since Amazon is new to Australia it has been offering lower than normal charges to induce sellers to get onto the platform. This may be the right time to become an established seller on Amazon and then, should Amazon raise its FBA fees to global levels, you can always adjust prices using the calculator to know your margins. The calculator does help in the key decision-making process so use it first.
