Should You Use FBA Small and Light? Here’s How to Profit

Boasting more than 12 million products on its platform, there’s no doubt Amazon is one of the hottest marketplaces in ecommerce. But did you know that 56% of Amazon sales come from third-party sellers?

Despite its mammoth size, Amazon still has to keep a close eye on its expenses. And like most physical product businesses, costs can pile up — even when your products are tiny. 

From sourcing to fulfilling orders, each expense must be accounted for and optimized in order to ensure profits for your Amazon store. That’s where FBA Small and Light enters the picture. 

Amazon’s FBA Small and Light program was built to give small items a fighting chance on Amazon by tackling those hefty fulfillment fees and keeping costs down, both for Amazon and for you. 

In this post, we’ll explore the ins and outs of FBA Small and Light. We’ll also share some simple tips to boost your odds of success, if you decide to use Small and Light for your store.

The Scoop on FBA Small and Light

  • First up, what is Amazon Small and Light?
  • What qualifies as small and light inventory on Amazon?
  • How to fill out the Amazon FBA Small and Light program form
  • The peaks and pits of FBA Small and Light
  • Quickfire tips to win with Amazon Small and Light
  • The best way to sell small products on Amazon

First Up, What is Amazon Small and Light?

There’s a lot to love about Amazon’s FBA service, except the fees which can wipe away margins like they’re going out of fashion. 

If you’re tired of dropping huge amounts of cash for Amazon to fulfill your orders, there’s a solution FBA Small and Light.

Designed to slash fulfillment prices and increase sales, Amazon’s FBA Small and Light service helps stores selling products that don’t take up much warehouse space get a leg up. So if your items are small, this could be your ticket to success!

Here’s what you need to know.

What Qualifies as Small and Light Inventory on Amazon?

If you’re not sure how to tell if your Amazon products are eligible for Small and Light, you’re not alone.

As with most things, Amazon likes to regularly switch up the rules. At the time of writing this, the criteria for acceptance into Small and Light are that your:

  • Products must weigh 10 oz. or less.
  • Package measurements don’t exceed 16x9x4 inches.
  • Item sells for $7 or less.
  • Products sell quickly (e.g., more than 25 units each month).
  • Products aren’t in the restricted, temperature-sensitive, prohibited, adult, age-restricted, or dangerous goods categories.
  • Items aren’t an e-cigarette (or similar), or an item that requires a signature on delivery. 

(For the latest details check out Amazon’s guide to FBA Small and Light.)

Meet all these requirements, and you’re good to go! You can now take advantage of FBA Small and Light and look forward to fulfillment fees between just $2.16 – $2.60. 

But don’t forget, you’ll also need to pay your Amazon seller fees which are $0.99 per item for individual accounts, and a referral fee which is usually between 5-15%.

How to Fill Out the Amazon FBA Small and Light Program Form

Once you’re sure you qualify, signing up for FBA Small and Light is a simple process. 

Here’s what you need to do:

  1. Head over to the Amazon Small and Light page.
  2. Sign into your Amazon account.
  3. Choose the items you want to enroll into the program.
  4. Ship your goods in.

And done. Now you’re ready to start saving on fulfillment costs!

The Peaks and Pits of FBA Small and Light

With a clearer understanding of what Amazon Small and Light actually is, it’s also a good idea to find out what you stand to gain and lose if you make the leap.

✔️ The Peaks of Amazon Small and Light 

More Money in your Pocket

Those margins that had you second-guessing your Amazon journey? They won’t be such a headache anymore. Combine the savings you get from being an Amazon Small and Light member with any cost savings you can rustle up through supplier negotiation, and you could walk away with a handsome profit. 

Access to Amazon FBA? Approved

One killer perk of FBA Small and Light is that you get access to all the same perks your Amazon FBA counterparts get. From fulfillment to returns, Amazon will take care of it all so you can focus on optimizing your listings and scaling your business.

Serve Prime Customers and Non-Prime Customers

As a Small and Light member, your products will have the powerful Prime badge. This perk can help make your fight for the Buy Box easier, while also attracting new customers and boosting sales.

Also, non-Prime members will have access to your products too, with free standard shipping.

Boost Your Marketing Results Across the Board

FBA Small and Light isn’t just about saving cash. Thanks to the boost in visibility and sales velocity the program can create, it can also help improve your marketing results including:

  • Better product rankings
  • Lower average return on ad spend
  • Increased returns on your Amazon ads

❌The Pits of FBA Small and Light

You Need High Sales to Make Money

With a $7 product price cap plus listing and referral fees to pay, it’s tough to make money with Small and Light unless you sell high volumes. 

Even with high sales velocity, your net profits might still take a hit when you consider the inventory obligations and opportunity cost incurred by spending time on items that don’t bring in much cash. So, you’ll need to ask yourself whether you would be better off investing your resources into products with more earning potential and lower volumes.

The Prime Perks Aren’t What Shoppers Are Used To

Yes, Prime customers will gain access to Prime shipping under FBA Small and Light, BUT the window shifts to 3-8 days and not the famous 2-day service Amazon is known for. This could create a less-than-stellar customer experience and inspire shoppers to look elsewhere. In turn, your sales and product rankings could take a hit.

Prepping Shipments Can Be Time-Consuming

If you’ve spent any time preparing Amazon shipments, you’ll know it’s a complex task marred with maximum box sizes, weights, and packaging restrictions. But the shipping rules are even more complex to follow when it comes to FBA Small and Light. 

For example, you can’t put more than 24 units of the same ASIN in the same box and they must be grouped using a plastic bag. If you don’t comply Amazon won’t process your goods. Not good! 

There are many horror stories of rejected shipments going missing in Amazon’s warehouses and you don’t want yours to be one of them. So, you’ll need to set time aside to prepare your goods properly.

Customer Return Costs Can Add Up

Just like Amazon FBA, returns are inevitable but costly. Your product will be subject to Amazon’s FBA customer returns policy, meaning you’ll pay costs like a return processing fee and restocking fees. These charges could cut into your margins over time, reversing the main benefit of Small and Light.

Quickfire Tips to Win with Amazon Small and Light

  • Follow Amazon’s Rules to the ‘T’: It can be tempting to bend the rules when shipping goods to Amazon but resist the urge as Amazon will find out and you could end up out of pocket. So, remember DO NOT: 1) Ship anything over the required size and weight; 2) Send in more items than you’ve been permitted to; and 3) Send items to an unassigned warehouse.
  • Pack Fragile Goods Carefully: Your FBA Small and Light goods will be sent in materials like poly bags or cardboard envelopes. Without the right care and attention, these packaging standards can put fragile and perishable goods at risk of damage. Ensure your items are packed to ensure safe transit to customers, and conduct test runs with a postal service to be sure your packaging will hold up throughout the journey.
  • Consider Making FBA Small and Light a Marketing Expense: If you’ve got a substantial product portfolio and want more eyes on your products you can use Small and Light as a tripwire or loss leader. For example, if you have a multipack toothpaste you could launch a tester or travel size to entice people into your store and make your brand known. After the introduction, you can market your larger-sized goods to level up your order value.
  • Get Funding to Cover Increased Inventory Costs: High volumes demand extra cash and often faster than most growing ecommerce businesses can pull together thanks to unpredictable Amazon payouts

If you want to take advantage of Small and Light by increasing your product sales volume, a flexible line of credit solution or daily advance solution can help reinforce cash flow while avoiding costly stockouts.

The Best Way to Sell Small Products on Amazon

Selling small goods on Amazon is a fantastic way to get your foot in the proverbial door, find new customers and boost your brand’s exposure. However, FBA Small and Light does come with a significant financial, time, and energy cost — even if you’re selling a high volume of products. 

Before you jump in, it’s important to assess the overall return you’ll receive from becoming a Small and Light member against how much work and capital you’ll need to put in.

Remain objective in your decision and let the data lead you. And who knows? With the right plan and approach, you might be the next Amazon Small and Light success story!

About SellersFunding

SellersFunding is a global financial technology company on a mission to empower growth for ecommerce sellers. The SellersFunding digital platform delivers a suite of financial solutions that streamlines global commerce for thousands of marketplace sellers including working capital, cross-border cash management, and business analytical tools. For more information, visit www.sellersfunding.com.

Posted December 14th, 2021 in .

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