Fulfillment by Amazon (FBA) can be a handy tool and one of the biggest draws for customers, but it might not be right for every seller. If you’re wondering whether to take the plunge, Repricer.com has these pros and cons of Amazon FBA for you to consider first.
Pros of Using Amazon FBA
- Amazon Prime Customers. When you use FBA, you’re automatically eligible to sell to Amazon Prime customers, that batch of tens of millions of buyers who pay extra to get free and fast shipping.
- Buy Box. Winning a Buy Box makes it incredibly easy for buyers to purchase your product, but more than that, it vastly increases the visibility of your products to leapfrog you ahead of the competition. Using FBA makes it tons easier to win a Buy Box.
- Higher Sales. Think of FBA as buying a fast pass for rides at an amusement park. You invest a little bit of money, and you get to cut ahead of a lot of people to enjoy higher sales.
- Brand Trust. When you have the FBA badge on your product pages, it’s a clear signal to buyers that you’ve got the backing of Amazon and they’re guaranteed of an easy, consistent shopping experience.
- Transporting Products. Your products have to make their way to an Amazon fulfillment centre and with FBA, that’s all taken care of so you can sit back and focus on something else.
- Ease of Shipping. You can handle the shipping process yourself, starting from picking and packing products to negotiating deals with couriers. Or you can use FBA and have Amazon handle everything, making life a lot easier for yourself.
- Customer Support. There’s a lot involved in customer support, especially providing good service. You have to answer questions promptly, deal with complaints, handle returns, and make sure you can do so in every language offered by the marketplace you sell in. But with FBA, Amazon takes care of all of that.
- Product Storage. If you don’t have the luxury of a lot or affordable storage, keeping your products in one easy-to-access location can be tough. FBA takes that load off your shoulders with their fulfillment centres, which are incredibly huge places that can house a lot of goods. This also means you can be more relaxed about stocking your inventory when scaling up.
- Multichannel Options. Using FBA doesn’t limit you to selling on Amazon, as you can use this service with Shopify, Magento, BigCommerce, WooCommerce and other platforms that support Amazon FBA.
- No retailer likes dealing in returns, but they’re an inevitable part of doing business. By using FBA, Amazon will take care of returns and refunds so you’re not faced with it.
- Product Protection. It’s also inevitable that if you ship enough products, something will get lost or damaged. But instead of swallowing that cost yourself, Amazon will reimburse you when you use FBA.
Cons of Using Amazon FBA
- If you’re not grossing enough each month, the FBA fees can really cut into your profit margin. There are also multiple fees for things like storage, packaging, shipping, listing and more (but there are also ways to lower Amazon FBA fees, too).
- Branding Limitations. If you’re a private label seller, then using FBA could have implications for your ability to grow your brand because Amazon will put their branding on the packaging, not yours.
- Lack of Control. The upside of using FBA is Amazon handles most of the shopping/shipping/fulfillment process. The downside of using FBA is Amazon handles most of the shopping/shipping/fulfillment process. If you want to control and customize every aspect of the shopping experience, you won’t be able to with FBA.
- Increased Returns. One aspect of successful selling is minimizing returns. But when Prime shoppers see easy returns as one of the perks they’re entitled to, they tend to take advantage of it far more often.
- Inventory Organization. You may have your preferred way of organizing your inventory that runs opposite to Amazon’s organized chaos. But when using FBA, you’re at the mercy of their methods, which can make it more difficult to manage your stock.
While using Amazon FBA can be an incredibly helpful choice to streamline operations and free up time, it’s not for all sellers. But if you want to grow your business, improve customer support (and in multiple marketplaces) or simplify things for yourself, FBA might be worth another look.
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