Fulfillment By Amazon, otherwise known as Amazon FBA is an Amazon service that allows online sellers to use Amazon’s warehouses to stock and distribute products worldwide. All of this can be done through the Amazon FBA platform.
There are almost 10 million Amazon sellers worldwide, with almost 73% of them using Amazon FBA. Thanks to Amazon FBA, businesses and individuals find it much easier to grow online without having to spend thousands of dollars.
Amazon FBA has seen so much success that 70% of Amazon sellers now earn at least $1,000 a month. Like any service though, Amazon FBA comes with pros and cons.
If you’ve always wanted to join Amazon FBA, it’s important that you understand both. Luckily for you, us at Project FBA are here to help!
In this short post, you’ll find all the key pros and cons in relation to Amazon FBA. Familiarize yourself with these before you sign up.
Contents
Let’s get straight into it by looking at the main pros associated with using Amazon FBA. You can probably imagine how advantageous having the world’s largest retailer handling your product fulfillment can be.
One of the best things about being part of Amazon FBA is that you are given access to Amazon Prime members. Every seller that joins Amazon FBA is automatically given access to Amazon Prime.
As a result, all of your products become eligible for Amazon Prime’s free two-day shipping. As you would expect, this encourages more purchases and gives you an edge over businesses that don’t offer free shipping.
Sellers that join Amazon FBA are also given access to Amazon’s customer service and return management. Amazon’s customer service is well known for its speed and accuracy. It is also much-loved for its 24/7 operations.
As an Amazon FBA seller, you are given access to all of the customer service tools Amazon has to offer. This includes return management. Amazon will handle all your returns for you.
Amazon is a hugely significant company, known all over the world. Trusted by almost everyone, you can use the brand’s reputation to your advantage. Buyers are more likely to buy a product if it’s on Amazon because they know they’re going to receive it.
This can have a significant impact on your sales and your customers’ buying intent.
Growing your business is a lot easier when you have Amazon’s one-of-a-kind online retail system at your disposal. Thanks to Amazon, you can offer your customers speedy loading and delivery times.
This will help you keep customers happy and potentially encourage future spending.
Expanding a business can be expensive. You might have to pay for extra storage and more employees. Luckily for you, Amazon FBA cuts the costs for you.
Amazon FBA sellers don’t have to employ more staff or pay for extra storage facilities.
Amazon FBA gives sellers the chance to work from anywhere in the world, whenever they want. Amazon will handle all your orders for you 24/7.
Now you know the key advantages linked to Amazon FBA, let’s look at the cons associated with using Amazon FBA.
Established businesses might not find the cost of Amazon FBA a problem but newbies just starting out might. Amazon FBA is useful, but it does come at a cost.
Not every Amazon seller can afford to join Amazon FBA. There are fees that are charged throughout the process and return management comes at an additional cost.
To start selling using Amazon FBA, you first have to ship your products to Amazon’s fulfillment center. This process is incredibly strict. Amazon isn’t flexible with their receiving guidelines.
Failure to comply could see you charged a non compliance fee. Even worse, Amazon might refuse to deliver your products.
Using Amazon FBA might increase your sales but your brand might not gain customer loyalty. With every purchase of your product made through Amazon, the customer establishes loyalty with Amazon, not your brand.
Amazon’s fulfillment centers are designed to ship at high-volumes. Products that are sat in the warehouse for longer than 6 months will be subject to semi-annual storage fees. This can affect your profits.
Amazon FBA is an excellent service online sellers and businesses can use to grow their business quickly and with lower costs. There are advantages and disadvantages associated with the service but overall, Amazon FBA is well worth the investment.
Businesses and individuals have seen a massive growth in recent years thanks to Amazon FBA. This trend is set to continue. Now you know more about the service, maybe you could be a part of that trend too!
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