The numbers: Exactly how much new Fulfillment by Amazon (FBA) fees will impact your book sales.

Part Two In A Five-Part Series

Apparently I’m weird, but there’s two huge things I find it unnecessary to talk about when it comes to selling on Amazon:

Small things that don’t move the needle that much (like debates about what constitutes “Good” versus “Very Good” condition). How terrible and unfair such-and-such new Amazon development is.

When its time to talk about “bad things,” all I care about is

A sober assessment of the reality. An immediate plan to adjust.

This article is about the former: “assessing the reality” of new FBA fees. (I’ll cover the “plan to adjust” next week).

Let’s get into exactly how new FBA fees will impact your profits, with real examples.

(And if you missed the last article, I break down all six of the recent changes at Amazon here).

The raw numbers of new Fulfillment by Amazon selling fees

When the last round of new FBA fees hit one year ago, I took a sampling of five books to show the “before” and “after” of the new fees. The books were chosen because weight is a factor in fees, and I wanted a sampling of the five most common book sizes:

Mass market paperback. Trade paperback. Average hardcover. Large hardcover. Textbook.

I’ll take these same 5 books to show both what new fees translate to in hard numbers for books are various sizes and price points, and how they compare to over a year ago (the latter detail is not exactly useful, but interesting to see how much can change in 12 months).

General ed: How do Amazon selling fees work?

Yes this is major beginner material here, but as a refresher, here’s how it works when you sell something via Fulfillment by Amazon.

Fees that apply to everyone (merchant fullfilled and FBA)

Amazon referral fee: 15% of sales price.

Closing fee. $1.80.

Fulfillment by Amazon fees

$3.19: 0 to 1 pound.

$4.71: 1 to 2 pounds

$5.09: 2 to 3 pounds.

$5.47: 3 to 4 pounds.

$5.85: 4 to 5 pounds

What’s changed for 2018?

Fulfillment by Amazon fees have gone up for each weight tier. Fees have equalized across the entire year (whereas in the past, they went up during the holidays).

Let’s take 5 books at various weights and price points, and show how FBA fees of 2016 and 2017 compare to new FBA fees today…

Book example #1: Rich Dad Poor Dad (mass market paperback edition)

Sales price: $7

Payout before February 2017 fees: $3.03

Payout after February 2017 fees: $2.18

Payout now: $0.95

Payout percentage change of most recent fees: -56%



Analysis: This is the end of the $7 book. RIP.

You see from the numbers above that this furthers the trend of new fees hitting low end books the most. The above example is the smallest size book you’re ever likely to sell (mass market paperback, i.e. romance-novel-sized), and at a $7 price point, new fees cut the price down by over half compared to a month ago. Brutal.

This pains me to say, but the days of selling $7 books via FBA are definitely gone. They were gone for anyone who needed $3+ payouts last year, but now they’re really gone – for all but the most serious bottom feeders.

Book strata #2: Standard paperback

Book example: Tipping Point (paperback)



Size / weight: 301 pages, 0.7 pounds.

Sales price: $8

Payout before February 2017 fees: $3.53

Payout after February 2017 fees: $2.45

Payout now: $1.79

Payout percentage change: –27%

Analysis: This a good example of an “average paperback book.” $8 is the current lowest FBA price as of the time I write this ($7.98), and it yields a less-than-impressive $1.79 payout.

After much consideration, I’m still committed to a $3 minimum payout for all my sales. To maintain this standard, you would have to list a book in the <1 pound range at $10 to get a $3 payout.



Somewhat good news to come out of the new fees: FBA prices have gone up, and noticeably so. For example with the above book, even with over 1,000 used copies for sale (a crazy high number) and fierce FBA competition, the lowest FBA price is still around $8. It’s not at all unusual to see books with 100+ used copies still having $10+ FBA offers.

So, FBA prices have gone up. But in terms of opportunity, does this mean $10 is the new $7? Have all the $7 books of 2016 simply become $10 books in 2018?

Not exactly, but there’s still tons of opportunity to hit a $3 minimum payout all day long, and do it with cheap used books, with a little effort.

Book strata #3: Standard hardcover

Book example: Flash Boys (hardcover)

Size / weight: 288 pgs, 1.2 pounds

Sales price: $10

Payout before February 2017 fees: $4.83

Payout after February 2017 fees: $2.95

Payout now: $1.97

Payout percentage change: –32%

Analysis: Books take a huge hit with new fees when they get above 1 pound. The free increase is $1.50, the biggest jump between any weight tier.

To illustrate, the paperback version of this exact same book (which comes in under a pound) will yield you a $3 payout at the $10 price point. That’s roughly a 33% difference over just a few ounces.

To get a $3 payout (you may have different standards), you’ll need to list this hardcover via FBA at $11.25.

This is a big lesson for new FBA fees: it’s heavier books (over 1 pound) that are most difficult to sell for a profit at “average” prices. More than ever, it pays to be able to roughly assess the weight of a book, and save yourself that extra few seconds in your scanning app to determine payout. If a book is over a pound, you can often just put that book down and walk away.

Book strata #4: Big hardcover

Book example: Money, Master the Game (hardcover)

Size / weight: 688 pgs, 1.8 pounds

Sales price: $10

Payout before February 2017 fees: $4.41

Payout after February 2017 fees: $2.55

Payout now: $1.96

Payout percentage change: –23%

Analysis: Notice the payout is only 1 cent off from the last example (which factors in one month of storage fees), yet this books is literally twice as thick. Anything between 1 and 2 pounds (such as the last two books) get the same fees.

There is huge gap between one and two pounds, and a ton (over half?) of books fall into it.

Spoiler alert here, but I’ve abandoned having a flat “minimum sales price,” in favor of setting a two-tiered minimum: one for books under a pound, and one for books over. And then I’ve learned how to assess what weight bracket a book falls into in the pre-scanning phase, without relying on my scanning app (because all apps have FBA offer blindspots, there’s too many clicks involved to get a clear payout amount for every book. More than ever, it really pays to estimate weight yourself).

More on this next week.

Book strata #5: Average textbook



Book example: Introduction to Hospitality (textbook, ISBN 013281465X)

Pages / weight: 600 pgs/3 lbs

Sales price: $20

Payout before February 2017 fees: $12.50

Payout after February 2017 fees: $10.66

Payout now: $9.70

Payout percentage change: -9%

Analysis: While books sold at cheaper prices are severely impacted (see the first example), books at higher price points are barely impacted by new Amazon fees. I don’t want to diminish the impact that 10% can make on an Amazon business, but this is not a dealbreaking amount. This is a big and heavy texttbook (over 3 pounds), and at $20, new fees only reduce payout by 96 cents.

For products above 2 pounds, the flat rate Amazon fulfillment fee only goes up 38 cents per pound. New fee changes shouldn’t make you cringe when you pick up a textbook, since the impact of a 3 pound book isn’t anywhere close to 3 times that of a 1 pound book.

Takeaways

The cheaper the price point, the more severe the impact. Books take a big hit from 1 pound to 2 pounds, and more than ever it pays to accurately guess what weight tier a book falls in before scanning. The sub-$10 FBA book sale is (moslty) dead. Most “average” paperbacks come in at under one pound, and can yield a $3 payout at a $10 sales price. Most “average” hardcovers and heavier paperbacks must be sold for around $12 to get a $3 payout. The impact of new fees is greatly diminished for books in the $15+ range.



Coming up in this series

In the next article, I’ll be covering the hard numbers on the biggest FBA fees changes of all: New long term storage fees.

-Peter Valley