You might be able to price listings shipping out of your warehouse for less than you think.

This is a cost comparison for shipping out of warehouse (FBM) on left vs. FBA.

It costs us $9 after after labor, packaging, and shipping to ship out of our warehouse.

After $0.40 of monthly storage, ~$0.33/unit to ship into Amazon, and a $5.42 fulfillment fee (the data Amazon was giving us on the previous screenshot was wrong), the equivalent Amazon cost is $6.15.

So $9 vs. $6.15 and you get prime.

Amazon wins hands down.

But what happens in reality is that you get a lot of orders in multiples.

The effective per unit shipping costs of these, instead of $9, are like $1.75 per unit.

So you can actually price lower than you think.

And what's nice about this is that you can slowly, as you scale, negotiate lower and lower shipping costs with FedEx, UPS, etc. which builds your margin (or you can use it to lower prices and increase your moat).

P.S. Brain Flakes is an exception. Most of what we sell is actually cheaper to ship out of our warehouse than through Amazon.

P.P.S. I know not every item will sell in multiples, but we see it a lot and across different brands.

P.P.P.S. think about how much money amazon makes

If our shipping costs are lower and comparable and they can combine packages, they are making boatloads of money on logistics :)

/thread

I did a bad job explaining my point in this thread. Here's a clearer explanation.

How awesome is this!?

An order of 30 units going to a school!

Schools don't have prime accounts (and Amazon will overcharge them on shipping as a result), so by offering our product at the same price as the FBA version we capture these super profitable sales!