The introduction of Fulfillment By Amazon has made selling items online easier (and more profitable) than anyone thought possible. FBA is a system implemented with Amazon.com which allows merchants to store products in shipping centers until orders are placed. When orders are received, Amazon will professionally package and ship the product directly to your customer. This innovative system is designed to assist merchants in selling more products while eliminating tedious dirty work like customer service and shipping. Sound too good to be true? Read our compiled list of the advantages and disadvantages of using Fulfillment by Amazon and make your own decision.
Amazon handles all shipping, customer support, and returns
Selling with Amazon has never been easier. With Fulfillment by Amazon sellers can list and sell items 24 hours a day, 7 days a week without ever worrying about shipping and handling, customer support or returns. Leave the dirty work with Amazon as sellers can monitor inventory levels and adjust prices as needed from anywhere on the planet. No more packaging boxes, licking envelopes, or printing shipping labels with Fulfillment by Amazon.
Access to the lowest shipping rates in the world
Amazon.com is the largest and most efficient shipping center in the world. Because of their immense volume they can offer some of the lowest shipping rates in the world. When sellers use FBA,
they are entitled to fantastic benefits many other sellers are not. The advantages include FREE Super Saver Shipping and Prime shipping eligibility, as well as up-to-the-minute countdown for one day shipping. These clearly marked offers help entice customer easily and display prominently through Amazon.
Your Inventory is secure & insured against loss or damages
Amazon.com processes millions of orders a year while consistently ranking as one of the most trusted and highest customer satisfaction rated e-commerce companies. FBA orders are processed using the same pick, pack and ship system used by Amazon, with automated inventory tracking and order processing so you’ll never have to worry about missing or lost merchandise again.
The best part of Fulfillment by Amazon is you can be as BIG as you want! The playing fields and limitations have evened up, establishing Amazon sellers more scalability to products and shipping. The days of needing more rooms and storage are all but gone with FBA, as sellers can sell more products than they ever imagined.
Fees, Fees, oh so many Fees
Although Fulfillment By Amazon seems like a fantastic service, there are some pitfalls associated with it. The biggest one being the amount of fees associated with it. To begin, sellers on Amazon need either a Pro Merchant ($39.95 a month) account or the Advantage account ($29.95 a year), which limits what sellers can and can’t do. Next, FBA charges storage fee for all unsold items in Amazon’s shipping centers. When items don’t sell, FBA customers are charged a fee for it. The rates vary from $0.45/cubic foot per month to $0.60/cubic foot per month.
Usually the first thing sellers notice when using FBA is the special labeling. Each unit sold through Amazon must be attached with a unique product identifier (SKU) that has its own barcode. This usually means more fancy work on the sellers part by having to buy unique shipping labels and/or special equipment (printer). Each Amazon label has to be visible and attached to the outside packaging of the unit. If labels are not visible or properly attached, Amazon will most certainly return all items, making it even more difficult to profit.
The biggest complaint Amazon sellers have about FBA is loss of control with their business. When orders aren’t shipped correctly or in a timely manner, customers don’t get mad at Amazon, they get mad with the seller! Because sellers put the entire process in the hands of Amazon, most of the negative feedback is excruciating hard to fix. Although sellers enjoy not handling disgruntled customers, they do like staying in the loop of whats going on with their business, and making sure issues are handled properly.
Overall, Fulfillment By Amazon is a great service that may, or may not work for your business.