Twenty Tips For Selling on Amazon – Tip # 13

13.  Raise your Average Selling Price (ASP) to reduce your fees and increase profit margins – Two of the fees you encounter in FBA are the Order handling fee ($1.00) and the Pick and Pack fee ($1.02). That totals $2.02.  Now if you are selling an item for $12.99, those two fees combined take 15.5% of your margin.  But sell an item for $27.95 and those two fees are only 7.2% of your margin.

Here is another example.  These are three products I am selling in Amazon FBA and their fees:

Item

Selling Price

Fees

Fees as a % of Margin

Silk wrap bracelet     $14.99     $5.42

36.2%

Salt & Pepper Mill Set

$89.97

$16.87

18.7%

Stick Blender  $144.00   $23.35

16.2%

So as you can see, the higher you go up in price the lower your fees as a percentage of your sale.  So as you source inventory, look for products with a higher average selling price.

My goal is $35.00.  I have not hit that yet but am working towards it.  Currently I am just over $29 ASP.  The reason is I have several fashion jewelry products that sell for just under $20, but I keep them because they are insanely profitable.  My cost on those items is between $3.50 and $6.00, so even with the high fees, I am still making good money.

If you want to learn how to sell on Amazon professionally, take a look at my latest training course – The Complete Amazon Marketing System.

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