Understanding Your Fulfillment Options: FBA and ShipSage
Author: Elizabeth Korda
As an e-commerce seller, it may be difficult to determine which fulfillment option would suit your business best. Additionally, there are so many factors to consider: product demand, weight, size, shipping and handling costs, carriers, and more. However, the good news is that there are many solid options to choose from. If you decide to list your products on Amazon, then Fulfillment by Amazon (FBA) will be available. However, if you decide to enroll in Seller Fulfilled Prime (SFP) through Amazon or list your products on any other e-commerce sites like Shopify or Ebay, there will always be a fulfillment option available through a third-party logistics (3PL) company like ShipSage.
How FBA Works
Before you start selling, Amazon will offer you a price plan for your business. Depending on how much stock you have, you will be able to choose between an individual and professional plan. Please see the chart below:
$0.99 per item sold + additional selling fees
$39.99 per month + additional selling fees
Sell fewer than 40 units a month
Sell more than 40 units a month
Still deciding what to sell
Do not plan to advertise or use advanced selling tools
You want to qualify for top placement on product detail pages
You want to use advanced selling tools, like APIs and reports
You want to sell products in restricted categories
FBA Storage and Fulfillment Fees
Based on the size, weight, and type of product, FBA storage and fulfillment costs will differ. Please reference the chart below for the breakdown of fees.
Inventory Storage Fees
A seller will be charged for all items stored in an Amazon Fulfillment center based on the daily average volume of inventory measured in cubic feet. Calculate fees here.
Seller will be charged per unit for picking and packing, shipping, handling, customer service, and product returns. Calculate fulfillment here.
Removal Order Fees
Amazon will return or dispose of inventory for a per-item fee. Calculate fees here.
Long-term Storage Fees
Monthly assessment for all inventory stored for more than a year. Calculate fess here.
Unplanned Services Fees
The seller will be charged when inventory arrives improperly labeled or marked. See fees here.
Returns Processing Fees
The seller will be charged when Amazon provides a customer with free shipping on their return. See fees here.
Fulfillment by Amazon (FBA)
As of January 18, 2022, FBA fulfillment fees for apparel and dangerous goods have increased. The overall cost of fulfillment and shipping depends on the unit weight ordimensional weight(DIM weight), whichever is greater.
For instance, if a seller wanted to fulfil a product like an individual pillow with a unit weight of 5 pounds, it would be considered a large standard size. With dimensions measuring 12 inches x 12 inches x 12 inches and with the DIM weight (DIM divisor of 139) of 12.4 cubic inches per pound, the shipping weight would be 13 pounds and the fulfillment fee per item would be $13.80 total.
ShipSage’s Fulfillment Services and Fees (Non-FBA Transfers)
As shown in the charts above, fulfillment fees with Amazon can add-up, when including long-term storage fees, inventory fees, monthly subscription fees, and additional selling fees. However, other fulfillment options like 3PLs could be more compatible with your budget and accommodate your business with more profitability.
A 3PL is a third-party logistics company that handles logistics and fulfillment operations for your business so that, as a seller, you can focus on marketing and scaling up your business. ShipSage is an end-to-end 3PL fulfillment service that adapts to the seller’s needs by overseeing logistics management throughout the fulfillment process, handling rate maintenance, and negotiating the best deals with carriers.
No Reoccurring Monthly Fees
$15.00 per pallet/$2.00 per carton
Charged only for space used
$.60 per cubic foot
Pick and Pack Fees
$1.50 per first pick/$.40 per additional pick
Standard Packing Fees
Per Packaging Type
ShipSage’s Dynamic Packaging Optimizer chooses the best packaging options for safe and secure delivery
***Dunnage included within packaging types
Specific to the order
Varies based on destination, weight, dimensions, carriers, etc.
Minimum Order Quantities
Ship as little or as much as you want!
Unlike Amazon FBA fees, ShipSage does not require a monthly subscription or require minimum order quantities of products. While ShipSage fulfillment fees are comparable to Amazon, when it comes to storage fees, the seller is only responsible for the storage space used in the warehouse. Further, shipping fees are contingent upon the destination, dimensions, carriers, weight, etc.
For instance, concerning the numerical value of an individual pillow from the example above, 12 inches x 12 inches x 12 inches (multiply Length, Width, and Height) would be 1,728 cubic inches. 1,728 inches divided by 285 inches per pound, ShipSage’s DIM divisor, would amount to 6 cubic inches per pound. The shipping cost of an item of 6 pounds would be $10.27 plus the first pick fee of $1.50. The total shipping cost would be $11.77. That would save you $2.33 for your first shipment in comparison to Amazon’s fee which includes the monthly subscription (individual plan) and additional hidden fees. On all your following shipments, ShipSage would only charge $.40 pick fee: the total shipping cost would be $10.67, saving you $3.13.
Saving amounts of two or three dollars may not seem like much, but with additional fees from Amazon, it can add up. Overall, ShipSage can save you money on inventory and storage, pick and pack, and shipping fees. Our services are Simple, Speedy, and Scalable. Leave your fulfillment to us!