FBA Fee Reduction Through ASIN Repackaging
The Challenge
GO worked with a consumables brand who used Fulfilled by Amazon (FBA) as their shipping model. Though they loved the convenience of Amazon handling warehouse management and product distribution, they had an item that was becoming unprofitable due to the exorbitant amount of FBA fees they were receiving. GO recognized this and began looking for solutions to reduce those fees.
Our Solution
Because Amazon charges FBA fees based on dimensions and weight, we worked with the brand to reduce their product’s size by changing it from a 4-pack to a 3-pack. We determined how much the product needed to be altered via Amazon’s FBA cost calculator and estimated what the package specifications would be once we reduced the offering.
By updating the brand’s ASIN to come in at a lower size tier, we decreased their FBA fees which enabled them to generate a healthier margin.
Results
The impact of this repackaging tactic was swift and substantial. While the value of this product decreased by 25%, we helped the brand reduce their FBA fees by 53%, more than making up for the loss.
25%
item value decrease
53%
FBA fee reduction
+28%
net benefit
We had previously worked with brands on switching their product offerings from a single pack to a multipack and vice versa, but this was the first time we had altered one multipack type to another multipack type. The success of this approach set a precedent for our other clients, giving them the confidence to allow us to implement this tactic across their portfolios to help them minimize their fulfillment costs as well.