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You’ve probably already considered selling on Amazon but its way easier than you think.
Call Us NowAmazon, an ecommerce giant, has over 2 million active sellers on its platform worldwide, and with the advent of Amazon FBA in 2006, sellers can get their products in front of millions of customers while Amazon handles the task of storing and managing inventory, shipping, customer care, and returns. According to Jungle Scout, about 86% of sellers use Amazon FBA.
However, while there are tremendous benefits attached to selling with Amazon FBA, it also comes at a cost. Read on as we explore what you need to know about Fulfillment by Amazon (FBA), as well as the pros and cons of using FBA for your business.
Fulfillment by Amazon or FBA is a service that allows you to send your products to Amazon fulfillment centers. Once there, Amazon handles the storing, packing, shipping, and customer service while you focus on selling your products. It is an easy and efficient method that helps you expand and grow revenue with Amazon, without spending thousands of dollars on storage facilities and personnel.
Amazon FBA embodies every little detail of your delivery process to ensure that orders get to your customers promptly and efficiently. Here are the services that come with subscribing to fulfillment by Amazon:
If you subscribe to Amazon FBA, you will get access to Amazon’s storage space, which means you won’t need to rent a warehouse or convert your space into an Amazon storage facility. Amazon stores products securely in its warehouses, and if your inventory is performing well, you have unlimited space at Amazon warehouses.
With Amazon FBA, you can have Amazon handle the entire fulfillment process, from picking the ordered items from the inventory to packing them securely and shipping them to the customer. This relieves you from the operational hassles of managing warehouses and logistics. You can reach customers globally by utilizing Amazon's extensive network of fulfillment centers which enables quick and cost-effective shipping to customers in various regions, expanding your reach.
With Amazon FBA, you don’t have to face the hassle of dealing with various customer inquiries. Amazon handles customer service support for products fulfilled through the FBA program. Amazon takes care of customer inquiries, providing a seamless and efficient customer experience. This contributes to building trust and positive reviews.
In addition to shipping products to customers, Amazon also handles the returns and refund process as part of the fulfillment process. This transfers the responsibility for unsatisfied customers to Amazon, reducing your workload and saving time for other aspects of your business.
When you subscribe to fulfillment by Amazon (FBA), your products become eligible for Amazon Prime, which provides free and fast shipping to Prime members. This not only enhances the visibility of your products but also attracts a larger customer base looking for quick and reliable delivery.
With Amazon FBA, you are not restricted to fulfilling orders only on Amazon. Amazon Multi-Channel Fulfillment (MCF) is a feature that allows you to sell FBA products on various platforms and channels, such as BigCommerce, eBay, and your website while still having Amazon fulfill them.
If you want to sell with Fulfilment by Amazon, the process is quite simple:
The FBA service comes with various fees. But before we look at the costs involved, It is important to note that you will need to ensure that your inventory is up to date. Amazon will usually notify you when your stocks are low.
So how much does Fulfillment by Amazon cost? Amazon charges various fees for sellers using the FBA service. Here are a few of them:
There are several things to consider when evaluating if the FBA service is beneficial to your business. In this section, we will look at the pros and cons of using Amazon FBA.
We have looked at the pros and cons of using the fulfillment by Amazon service. While there are numerous benefits, they also come at a hefty price.
The biggest benefit of using the FBA service is that you get to save time. Amazon handles everything from packing to customer service. This delivers you from the hassle of handling your logistics. It also helps you concentrate on other aspects of your business. However, in determining if FBA is right for you, it is important to consider the volume of products you are selling. If your business is growing at a fast rate, FBA is the best option for you.
For low-cost goods, FBA might not be a profitable option as the costs could negatively affect your profits. You might also consider using both FBA and FBM. According to Jungle Scout, over 20% of Amazon sellers use both FBA and FBM.
FBA offloads the responsibility of order fulfillment, allowing you to focus more on other aspects of your business. This can be particularly beneficial if fulfilling orders is consuming a significant amount of your time and resources. If your business lacks the infrastructure to handle inventory storage, packaging, and shipping, or if you're looking for a solution that eliminates these headaches, FBA provides an end-to-end solution. FBA offers a seamless customer experience with its returns policy and customer service. This can help build trust with your customers and improve your business's reputation. This can also reduce the burden on your customer service team.
If your goal is to compete with or offer products alongside those already available on Amazon, FBA can be a strategic choice. It allows you to leverage Amazon's customer base and logistics network to reach a wider audience. However, if you're looking to differentiate your products or offer them exclusively on your own platform, FBA might not be the best fit.
Keep in mind that not all products are eligible for FBA. Amazon has strict guidelines for product eligibility, including packaging requirements, size limits, and other criteria. You want to ensure your products meet these requirements before choosing FBA.
Overall, FBA can be an excellent choice for businesses looking to scale efficiently, manage logistics and customer service, and leverage Amazon's vast customer base. However, it's important to carefully consider the specific needs and constraints of your business.
Fulfillment by Merchant (FBM) is a method that involves the seller listing products on Amazon, but handling the fulfillment process. This includes everything from storing to packaging, shipping, and customer service. With this method, the seller is in control of the entire process. The seller uses their resources for the fulfillment of their products. This method is beneficial if you have small-volume products that are easy to handle. You can also effectively build your brand.
The Seller Fulfilled Prime (SFP) method allows you to get the benefits of Prime Eligibility while giving you control of your products. This means you must be able to fulfill your orders as quickly as possible. (You must be able to ship on the same day and also guarantee a two-day delivery). You must also meet other requirements and must be enrolled in Premium shipping. The Seller Fulfilled Prime is a great method to keep Amazon fees low while retaining control and enjoying Prime benefits.
Amazon FBA is an incredibly helpful option as it streamlines operations and frees up time for other areas of your business. If you want to grow your business and simplify the process of selling on Amazon, FBA might be the best option for you. However, this might not be the case for all sellers. It is important to weigh the pros and cons we have listed above and determine if using the FBA service is indeed profitable for your business.
You’ve probably already considered selling on Amazon but its way easier than you think.
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