If you are related to e-commerce or know a few things about Amazon, then you’ve probably heard about Fulfillment by Amazon (FBA).
It’s quite alluring. In fact, who would want to do the heavy lifting when one of the biggest brands in the world is willing to do it for you. That said, it’s not for every type of entrepreneur.
Think about the additional fees, hassles of branding, and not having direct access to your customers. But if you think you are a good fit for this program, it can generate good money for you.
In this post, I’ll explain everything you (the seller) need to know about Fulfillment by Amazon and how it can help you get successful online.
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What Is Fulfillment By Amazon (FBA)
Are you a seller? And do you want Amazon to handle your shipping, returns, and refunds, as well as warehousing, picking, packing, and more? Then, use their service for third-party sellers called Fulfillment by Amazon (FBA).
As a seller, you’ll just focus on selling and making sure that Amazon has enough stock. Amazon will handle the orders as you will be sending them your products.
On the surface, it looks alluring. But it does come with some costs as it’s a paid service. So not every seller can afford it.
Think of it as a rental service for storage and fulfillment. As long as your product stays in their warehouses, your costs keep rising. On top of that, bigger products mean higher costs. And clothing items incur an additional $0.40 fee.
So if the above costs are okay with you, get ready to enjoy benefits, like:
- 24/7 customer service
- Amazon Prime eligibility
- Amazon handling all fulfillment and shipping administration
- The opportunity to scale your business and reach more customers because a giant network will be handling your orders
How Can FBA Improve Your E-Commerce Business
Want to know if this program is worth the money? Then read on. This section will show if FBA can help grow your business and boost your bottom line.
Amazon Handles Customer Service and Returns
Sourcing, marketing, selling, and shipping your Amazon orders is time-consuming. And many sellers don’t have time for that.
For those sellers, FBA is a great option. This program lets you focus on one thing only: Selling. So you don’t have to waste time on preparing individual orders, sending parcels around the world, and dealing with returns.
Fulfillment By Amazon Can Scale Your Online Business
Think about it: Amazon is the biggest e-commerce business. Not only that, but it’s also one of the biggest companies in the world. So selling on that platform will most likely make you money.
I think it’s a low-effort method to grow your income. You don’t have to hunt for customers because Amazon gives you access to a broader customer base and lets you latch onto Amazon’s trustworthiness. Compare it to your own website where you’ll have to apply digital marketing strategies consistently to bring more customers.
When you have access to more customers, more people will see your brand as a trustworthy one. That increases your chances of converting sales.
Your Products Are Eligible For Amazon Prime
Amazon Prime is a big perk that comes with FBA. If you choose to go with this program, your listings will have the Prime logo. That tells people that Amazon handles packing, delivery, customer service, and returns.
The average Amazon customer spends only $600, which is $800 less than what Prime customers spend. So you do have a better chance of increasing your profits by gaining access to a high spending audience.
By 2022, we might even have around 150 million Prime users, so there’s no shortage of high spending buyers. Also, if you choose to sign up now, more people will see your products in the coming years.
Access To The Buy Box
Many sellers want the Buy Box, but the platform doesn’t give it to everyone. But why is it so important?
First, let’s talk about what it is. It’s the white box on the right-hand side of the page. It helps customers with adding a product to their cart. Around 8 out of 10 Amazon sales go through the Buy Box, which makes it popular among sellers.
But the platform has made it exclusive. If you want it, meet the following requirements:
- a professional seller account
- Buy Box eligibility status inside Seller Central
- items must be new
- availability of stock
FBA May Increase Your Amazon SEO
BigCommerce has observed that if someone has an FBA account, they tend to rank higher on search results.
But is this important? Well, yes. I’ll use the Google SEO analogy. Most people click on the first few search engine results only. The same goes for Amazon. If your products rank high, more people will see and buy them.
The Cons Of Using Fulfillment By Amazon
Letting Amazon do most of the heavy lifting sounds good, but here are some factors you need to consider:
- Costs: A monthly fee of $35.
- Prep Time: Even though Amazon is handling most of the stuff, you still have to send your stock to Amazon. And you have to do it by their standards. Again, you can avoid it by paying a fee.
- No email list: You can’t build an email list of previous customers with FBA, which means losing access to its pool of customers and having no way to contact them.
Are you going to start an FBA business? Let me know in the comments below!