Unpacking the Pros and Cons of Amazon FBA

Fulfilled by Amazon (FBA) is a paid service by e-commerce giant Amazon where members are allowed to store their products in fulfillment centers of warehouses. Unpacking The Pros And Cons Of Amazon FBAAmazon does almost everything for the seller since it takes care already of the picking, packing, shipping and giving customer service for the products that a merchant sends them.

If you don’t know it yet, a business can also use fbabee to help in prepping stocks to be forwarded to Amazon, making everything more convenient. You will need an Amazon Seller account to use this feature, which you can use for multi channel fulfillment. This means that you can also use FBA service for products that you sell through other platforms and your Amazon store.

In every venture, there are positives or pros and negatives or cons:

  1. Pros

The FBA is popular because it takes a lot of the logistics and effort in running an e-commerce business and relieves it from the business owner. If you are planning to avail of FBA, you may want to know the possible benefits you’ll enjoy so that you can make an informed opinion on the matter.

Here are the main advantages of using the FBA service:

  • The use of Amazon Prime

Amazon Prime is Amazon’s subscription service, which gives users access to a lot of benefits including fast two-day delivery. When you use FBA, all your items are automatically qualified for Amazon Prime shipping, which allows members to have quick shipping for products. Because of this, your customers will quickly receive their orders and you will become a trusted seller in the Amazon marketplace.

  • Win the Buy Box

The Buy Box is found on a product’s detail page where a customer starts purchasing by adding items to their carts. Merchants selling similar or the same products are competing for the space. When you avail of the FBA, you are more likely to get the box more than other regular sellers most of the time – increasing your chances of customers buying your products than from others.

In a place where there are a lot of people selling the same products, being featured in the box is an excellent advantage.

  • Focus more on other business operations

If you have previous experience in running an e-commerce business, you know all too well the tedious task of packing and sending the packages to a shipper. If you are selling on Amazon and you are enjoying high sales, you wouldn’t want to spend a large portion of your time packing and shipping your goods.

With FBA, you are generally hiring Amazon to fulfill a lot of tasks for you, and you are doing this will high confidence that your orders will arrive safely to your customers. So, you can then spend your time concentrating on other business operations that you have.

  • Use multi-channel fulfillment

Once you avail of FBA, you are not restricted to using only the service for the products you sell on Amazon but also for those that you sell on other channels.

  • Higher chance of selling more

Since you will win the Buy Box space over non-FBA sellers, you enjoy the advantage of an increase in sales compared to doing the fulfillment of orders yourself.  You can also add Amazon as a new channel to your existing e-commerce strategy to enjoy even more sales because customers can see you first in line.

  1. Cons

In order to make the best possible decisions, you have to weigh both negative and positive aspects of a service or product. Although there are distinct advantages to using FBA not only in your Amazon store but also in other channels, believe it or not, there are also some downsides to it.

Knowing the disadvantages of this feature helps you assess if it is helpful for your business or not:

  • Complicated shipping preparation

You will be responsible for bringing your goods to Amazon’s fulfillment centers, which needs to be packed and labeled individually. This procedure is crucial since Amazon is strict with their system.

  • Difficult to track inventory

When you have established your items for sale in the Amazon store, not all of these will sell as quickly as the others. It then becomes more difficult to monitor which things you need, what you already have or what you should reduce – especially when your items are stored in Amazon’s warehouses.

  • Increased rates of returns

Because of Amazon’s easy return promise, a customer can easily return what they think are not good enough to keep or those bought on impulse.

  • FBA is not free

Of course, Amazon is going to charge you for their service. The amount you pay is based on the inventory they keep for you and how long they keep it. This means that you have to know your sales volumes such that you can save just enough stocks needed to enjoy profits.

Conclusion

FBA or Fulfilled by Amazon is a feature that will benefit the consumers and merchants as well. Most of the steps that are involved in processing orders on Amazon stores are taken care of this feature. Although it comes with apparent benefits, there are also drawbacks that come with it. You should be able to determine if FBA is in line with your business goals.

 

About Sarah Morris

Sarah Morris is writer and blogger at PenWarriors.