What is fulfillment by Amazon?
“Fulfillment is the process of storing, packing, and shipping orders as well as handling returns and exchanges. Effective, reliable ecommerce fulfillment delights customers. With FBA, you send your products to Amazon’s fulfillment centers, and we pick, pack, ship, and provide customer service for those products”.
FBA is as simple as it sounds: sellers sell, Amazon ships. With FBA, sellers only need to focus on handling sales and making sure Amazon stays stocked, the rest is done by Amazon.
The Costs of FBA
One of the things that interest most sellers is how much they have to pay for Amazon services. To begin with, it’s important to say that Amazon charges fees on items based on size and weight, not cost. What does this mean? If you’re selling a cheap item on Amazon through FBA, it could cost you more than what your product is worth.
With Amazon FBA program, you pay storage and fulfillment fees; the more inventory you have, the more expensive it’s going to be. Something important to keep in mind is that the cost goes up if your items are stored for more than 180 days (this is where using a 3PL warehouse service might be more convenient).
There might be other fees that could apply to your products and other factors related to pricing. However, Amazon is usually very transparent with its procedures and they’ll tell you whether extra fees apply to your product or not.
The Pros and Cons of FBA
So what do you get for the money you pay?
- 24/7 Amazon customer service
- All fulfillment and shipping costs included (pick, pack, and ship), leaving you more free time to grow your business
- The Buy Box almost always goes to an FBA seller
- Conversions are generally higher from FBA sellers because of brand loyalty
- Access to one of the world’s most dynamic fulfillment networks
Final Thoughts
Is selling on Amazon FBA worth it? That depends on your business, your sales, and your products. The main benefit of the FBA program is that your customers receive excellent and fast service, but the main downside is its cost.
It’s definitely worth it in 2021, for some sellers. Before you determine if it will be a profitable solution for your business, you need to calculate how much you’re likely to spend.
Whether you enroll in the FBA program or not, having support to manage your Amazon business will make your job a lot easier. 3PL providers can help you with storage management and fulfillment services, and sometimes for a cheaper price than Amazon!
Don’t hesitate to get in touch with us to give you a special intro offer and a free quote! We can be just what your business needs.
References
Is Amazon FBA Still Worth It in 2020?
Leveraging Amazon FBA for Your Online Sales Success
