View Full Version : Fulfillment by Amazon

05-12-2008, 02:18 PM

This seems like a good service. I plan to use it for my upcoming manufacturing based ecommerce expansion.

Basically, you give your product to Amazon, it gets sold on Amazon.com directly (at a price you set) and sold by you through your own channels. When you get sales, tell amazon, they ship it out for you.


Storage is 45 cents per cu/ft. This is pretty reasonable. For my large items shipping fees (UPS) are $8 if sold through Amazon or $11.50 if not sold through Amazon. This is stupidly cheap. I can end up spending $25 ot $30 to ship the same thing with UPS. Amazon has great volume discounts, obviously. They'll also let you ship on their Amazon corporate account for sending your goods to them.

For items sold through Amazon there is a 15% revenue share, items you sell yourself there is no such share. There are no pricing rules though, you can add 15% to your Amazon listing if you want, or even ask them to just bury it in their search results if you don't want it easily found on Amazon.

There is also a $40 monthly fee attached to setting up the proseller account with them that enables this feature.

There are no other fees (delivery, packing, unloading, sorting, etc) associated.

Now, I've priced out similar services, such as Shipwire.com. Shipwire quoted me around $7200 a month for the storage volume I need, plus high shipping and handling fees (they don't have Amazon's discount I guess), and pick and pack fees. That same volume of storage on amazon is $2880 by my calculations.

The only downside, they do not ship internationally, so that certainly complicates things a little bit, I'll need to still find a solution for that shipping.

You have to do the cost comparison with having your own local storage, insurance, security, etc. Then shipping labor, either yourself or someone else. Rent is probably going to end up being close, and the labor savings are just great. Plus, the shipping is cheaper than if I did it myself so I can pass that onto my customers.

05-12-2008, 02:42 PM
That's a really interesting service. I was just thinking the other day if they did something like that for other companies maybe as they have all the infrastructure in place. Guess its a great option if you out grow your home based business.

05-12-2008, 04:50 PM
Not unlike how Google is offering Google Apps. They have the infrastructure, they can farm it out.

(consequently, Amazon also has services to rent out their IT infrastructure too).

06-27-2008, 03:00 PM
I hate this part -

Basic Fulfillment orders are sent in standard Amazon packaging that includes Amazon logos and inclusions. At this time there is not an option to use a plain (non-branded) or customized packaging.