You'd never guess that the true cost of running an Amazon cross-border e-commerce business is far more complicated than you think! For Taiwanese cross-border sellers, the core of doing business is to accurately grasp the cost structure, after all, only a thorough understanding of where every penny goes, in order to develop a winning product selection and pricing strategy.
Today I'm going to systematically demystify costs for you e-commerce entrepreneurs. Using the North American site as an example, your business will face these major costs:
- Amazon North America Pro Sale Plan: $39.99 per month for $
- Sales commission: fluctuates between 8%-15% according to different categories.
- First-Haul Transportation (From Taiwan Factory to Amazon US Warehouse) + US Import Duties and Taxes
- Amazon Logistics (FBA) Fees
- Product costs, target margins and other operating expenses such as advertising
But that's just the surface! The real headaches for cross-border brands are the hidden costs. For example, do you know that there are different site commissions for different sites? There are different commission rates for different categories, all of which you need to check out on the Amazon Global Store website.
In the whole cost structure, the site commission and sales commission are relatively fixed, the most cross-border e-commerce sellers are concerned about these three major changes in cost: the cost of first-trip transportation, FBA logistics costs and advertising costs.
There are four main modes of international logistics for first-trip transportation, and I'll rank them in order of time and cost:
- International Express: Time ★★★★, Cost ★★★★
- Air transportation: Time ★★★★★, Cost ★★★★★
- Sea/Air transportation: Time ★★★, Cost ★★★
- Sea freight: Time ★, Cost ★
Generally speaking, goods within 200 kilograms can be transported by courier or air freight; over 3 cubic meters, sea freight is recommended. Most importantly, you must combine your own sales plan and inventory management situation to choose the most suitable headway logistics program.
In addition, do not forget to consider the return and exchange rate and the rate of defects according to the product characteristics, these hidden costs are often ignored by novice sellers, but can quietly eat your profits!
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