This question about Amazon FBM royalties came from a member of the Independent Book Publishers’ Association, on whose board I serve. Here’s my answer:
Amazon Fulfillment by Merchant (FBM) is technically part of “Amazon Seller” accounts and there are two tiers:
- Professional ($40/month)
Free gives you basic access to selling stuff on Amazon and then shipping to customers on your own using the FBM program. The Amazon Seller pro version gives merchants access to Amazon’s Fulfillment by Amazon (FBA) program in addition to FBM, and gives better rates (e.g. lower Amazon fees).
A publisher’s FBM net depends on a few factors:
- Price of item
- Whether it’s a book (ISBN) or something else (UPC)
- The cost of postage, which depends on the weight of the item and where you buy the postage.
Amazon demands higher fees from items with ISBNs compared to UPC codes (also known as GTINs), so low-cost books (used or new) won’t be making much of margin, especially if they are heavy.
I sell some books FBM via my pro Seller account and the Amazon seller fee is $3.75 for books priced at $12; when you factor in the cost of printing and to get it to my house ($3) and the cost of first class postage and the mailer (about $3.50) there’s not much a margin.
Note also that the United States Postal Service is raising first class parcel rates on January 27 by 50% or more which may effectively kill the margin for this title.
On the other hand, Amazon sells postage directly at a discount (you print out the label at home, stick it in a mailer and drop it in the mail) and you may be able to use cheaper but riskier Media Mail.