7p item works out at £3 on Amazon marketplace?

GDB2222

I wanted to buy a few metres of earth sleeving. It’s £7 for 100m at Screwfix, or £2.95 for 1m at Amazon.

I then found a fees estimator on the Amazon website which seems to show that Amazon’s charges to the marketplace seller are £2.87. So, even with a gigantic markup the seller is not making any money.

Is my understanding correct? And, if so, how do marketplace sellers survive?

I appreciate that the items need to be warehoused, picked, and shipped, and that’s expensive.

Isthisforreal99

So they make 8p profit per metre so sell 100 metres they make £8 - so £1 more than Screwfix? So not sure what your point is?

GDB2222

Umm, no. They make 1p profit per meter.

They sell say 100 lots for a total of £295. Of that Amazon takes £287 and the seller gets £8. They pay £7 for the roll of sleeving. They make £1 profit. Maybe. If everything goes perfectly and there are no returns.

And then there is the cost of cutting the roll into individual pieces, packaging them, and sending all the packages to Amazon. So, actually the seller is making a loss.

RFW

There are different seller fees. Generally, professional sellers pay 15% (there are loads of variations there). If it's FBA (fulfilled by Amazon) there are additional storage and shipping fees. If posting yourself then the fee is the 15% plus your own postage.
So if you can send something for second class postage, then you can just about scrape a profit selling something for £2.95. There are problems there in that Amazon want you to send using tracked postage which bumps up the postage price and costs.
I used to sell a lot of items for under £5 on Amazon but it's no longer viable. Hopefully a seller knows what they are doing. I still sell a few sub £5 items but generally know that they are sold in 3 or 4 at a time which is quite profitable, so the odd single one that slips through is not a problem.

Isthisforreal99

https://forums.moneysavingexpert.com/discussion/6670874/7p-item-works-out-at-3-on-amazon-marketplace

https://forums.moneysavingexpert.com/discussion/comment/82020987#Comment_82020987

Who says they paid £7 a roll for it though? That's like saying Screwfix sell it at cost and zero profit.

GDB2222

https://forums.moneysavingexpert.com/discussion/comment/82021059#Comment_82021059

As a buyer, I always prefer items with FBA so they arrive really quickly.

It’s amazing how many different things Amazon manages to charge sellers for. The search engine makes it hard for buyers to find the cheapest option, and I assume that is deliberate. It’s not helped by some sellers opting for a low price tag and loading up the shipping cost.

RFW

https://forums.moneysavingexpert.com/discussion/comment/82021161#Comment_82021161

With some sellers, Amazon are setting the postage price so they don't always have a choice. It makes no difference to the return from Amazon, they charge fees on postage anyway and always have. As for Amazon charges, they certainly manage to pile them on and hang on to sellers' money as long as possible too.