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How to Mitigate Fees as an Amazon Seller

Between inflation and fees, selling has become much harder. Discover tips to mitigate income loss from fees. By Marissa Incitti March 16, 2023
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Earlier, we gave an update on the new selling fees for Amazon in 2023. For part two of our seller fees series, we’ll be giving tips for mitigating income loss from fees.

The old adage “you need to spend money to make money” rings true for those selling on Amazon and other online marketplaces. While it’s common for fees to rise, outside influences can make the smallest change become the largest ripple. 

And while there is nothing you can do about having to pay these fees, you can take certain steps to minimize your fees and increase your profits. Here are some tips for minimizing Amazon seller fees:

Choose the Right Pricing Strategy

The right pricing strategy can not only help minimize Amazon selling fees, but also increase your profits in the process. One of the fees that a strategy can affect is referral fees. Amazon charges referral fees on each item sold, which are a percentage of the item’s sale price. When you price your product competitively, fees are lower and profits are higher. 

To price your products competitively, take into account your current fees and desired profit margins. Use that number to set your pricing. An easier way to do this is through dynamic pricing optimization. This strategy involves adjusting the price in real-time to maximize revenue and profits. It’s incredibly difficult to do manually, which is why most sellers rely on an optimization software like Feedvisor’s.   

Our advanced repricing algorithms can help Amazon sellers automatically adjust their prices in real-time to remain competitive and win the Buy Box, which can increase sales and offset Amazon fees.

Optimize Your Product Listings

Product Listings are often the first point of contact that a customer has with a product. If done well, you earn a sale, if not, they move along. 

Having accurate and detailed product listings can help you avoid penalties and fees, such as those associated with product returns or customer complaints. Make sure to provide clear descriptions, high-quality images, and correct product dimensions and weight.

Further Reading: How to Write an Amazon Product Listing That Will Entice Conversion

Monitor Your Inventory

Inventory can be one of the largest costs for a seller. If you have too much of dead inventory, you’re racking up the storage fees and losing profit. 

Avoid storage fees by keeping track of your inventory and only storing the products that are selling well. Using a Replenishment Report like Feedvisor’s can help you determine top selling products to order more of or delay ordering products that are not selling. If your product is seasonal, use forecasting reports to ensure the right products are in stock at the right time.  

Pricing correctly also means avoiding long-term storage fees, since products in the right price range will sell before they become subject to these fees. 

Use FBA (Fulfillment By Amazon) Strategically

Using Amazon’s Fulfillment by Amazon (FBA) service can help you save money on shipping costs and improve your product’s visibility, which can lead to increased sales. 

FBA can also help you save money on fulfillment fees, since it allows you to store your products in Amazon’s warehouse, and they take care of shipping, handling, and customer service. While this service does come with fees, it can be more cost-effective than fulfilling orders yourself, especially if you sell a lot of products.

Further Reading: How to Maximize Sales Through Amazon FBA [Webinar Recap]

Use Other Marketplaces

Consider selling your products on other marketplaces, such as eBay or Walmart. This can help you diversify your sales channels and reduce your reliance on Amazon, which can help you save on fees. 

The audiences are slightly different for each marketplace, which could also work in your favor, especially if your product is in high demand.  

Know Your Business Metrics

You can’t make data-driven decisions if you don’t know what’s driving your sales. 

At Feedvisor, we provide Amazon sellers with business intelligence optimizations that can help you make data-driven decisions and optimize your sales performance. 

This can help you identify trends, spot opportunities, and adjust your strategies to maximize your profits while minimizing fees.

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About the Author

Marissa Incitti is the Associate Director of Content for Feedvisor, where she oversees and executes the company's content marketing strategy and initiatives. Before joining Feedvisor, she was the content marketing manager for a Fortune Global 500 omnichannel commerce technologies and operations company.

Final Thoughts

Mitigating fees is a crucial aspect of being a successful Amazon seller. By implementing various strategies such as optimizing listings, utilizing Amazon’s FBA program, and expanding marketplaces, sellers can reduce their expenses and increase their profits. 

However, it’s also important to regularly review and adjust pricing and fees to stay competitive and ensure long-term success on the platform. That’s where Feedvisor comes in. Try our holistic optimization solution free today.

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