What is Amazon FBA: Pros and Cons

Today, starting an online business with Amazon FBA has become very easy. You can start by selling a wholesale product on Amazon, something you made yourself, or even something you no longer need. Everything can be sold on Amazon that fits Amazon selling guidelines.

A seller can start doing business in two ways: via FBM (fulfillment by merchant) or FBA (fulfillment by Amazon). In FBM, a seller can list the item and start the business. Once he receives the order, he must fulfill it through a third-party shipping company. In FBA, the seller forwards the inventory to Amazon, and when he gets the order, the Amazon team fulfills it.

Explore the differences between Amazon FBA and FBM in detail to choose the right fulfillment method.

Let’s start exploring FBA:

What is Amazon FBA?

FBA stands for “fulfillment by Amazon.” It means you sell, and Amazon ships.

Amazon has created a strong network of products that are delivered to customers in a highly advanced and systematic way. This is beneficial for merchants and satisfactory for customers.

Amazon FBA Business Model

• You send your products to Amazon.
• They store them in their warehouses.
• When a customer orders one of your products, Amazon picks, packs, ships, and tracks the order for you.
• They also handle returns and refunds.

Are you new to the Amazon business and need help managing your Amazon seller account? Don’t worry; we are ready to help. Contact us today.

Pros of Amazon FBA

• Effortless Logistics & Shipping: If you have ever managed your inventory, you will know that it is a time-consuming process, and you must take care of many things simultaneously. But with Amazon FBA, you will experience effortless and reliable shipping. It will save you time and effort to spend on packaging, labeling, and dealing with 3rd party shipping companies.
• Amazon Prime: When using the Amazon FBA service, your listing automatically qualifies for Amazon Prime. Customers love fast shipping; your product will be delivered faster to customers who order it. A prime badge tag on your listing will increase the conversion rate for more sales.
• Win the buy box: The Buy Box has a “Buy Now” button. For new FBM listings, Amazon does not offer the buy box quickly because of low trust issues. But, with FBA, your listing gets a Buy Box from the first day it is activated. Because Amazon has your product inventory, it ensures the delivery of the product to its customers.
• Multi-Channel fulfillment: With Amazon’s Multi-Channel fulfillment option, you can grow your business without limitations. Amazon offers you its world-class service of picking up your orders, packing them, and delivering them to their destination. No matter which channel the order is placed from, You can get it delivered by Amazon. This makes Amazon FBA the best service provider.
• More Sells: If you win the buy box on FBA seller, plus if you’ve added Amazon as a new channel to your existing eCommerce approach, you will get more noticed by the customers, and your sales will increase automatically. In this way, you can earn a lot of profit.

Cons of Amazon FBA

• FBA Costs More: Amazon charges both storage fees and fulfillment fees. You need to consider how frequently your stock moves and whether it is giving you more profit than the price you are paying. Otherwise, it can be not easy.
• Long-Term Storage Fees: Amazon charges you more if your stock is kept in the warehouse for over six months. Amazon ensures the stock moves fast; otherwise, you will be charged high storage fees.
• You May See More Returns: As Amazon offers its customers an easy-to-return policy, the rate of impulsive buying customers & test-buyer customers who purchase products on a trial basis. Because of this, the number of returns also increases, making it difficult for the sellers to manage the returned products.
• Shipping Preparations Can be Complicated: For FBA, we need to deliver our inventories to the Amazon warehouse. This process can be complicated and stressful, as Amazon is very strict about packing and labeling. We must pack and label our products separately under Amazon’s ASIN/UPC system.

These were some of the pros and cons of Amazon FBA.

Amazon FBA Can Boost Your Sales with Prime Shipping

Amazon offers free 2-day shipping through Amazon Prime. It’s one of the main reasons people shop in the marketplace. Free 2-day shipping is now the standard for all online sellers. If you are a seller on Amazon, you can also take advantage of these benefits to satisfy your customers with the best services by using Amazon FBA. Finding the right supplier is the key to business success, so sellers must find the top Amazon FBA suppliers.

Amazon FBA is an innovative and cost-effective way to ship your items. While you pay a fee for this service, you provide customers with industry-leading logistics to ensure their package arrives on time.

Get started with selling on Amazon.

Selling on Amazon is very simple and easy for all types of sellers. Amazon provides you with various tools to reach millions of potential buyers. Take the benefit of the Amazon keyword research tool and product research tools to find profitable products. If you’re wondering how to sell on Amazon and maximize your profits, consider hiring a professional Amazon expert consultant.