It would help if you first grasped how Amazon FBA works before determining whether Amazon will benefit your company. You ship things to an Amazon fulfillment center in the first step. If you do not manufacture your goods, the manufacturer can supply them to you instead. In the United States, there are around 100 warehouses. Depending on the product type, Amazon will advise you where to ship it. You can go now to the Amazon website to know more.
- After Amazon receives your items, warehouse workers will sort them and store them with a tracking code. Damage and loss are uncommon; however, if your products are damaged or lost, Amazon will refund you.
- When a consumer places an order for one of your products, Amazon will track it down and pack it for you. Your inventory will be updated regularly.
- Amazon will ship the goods according to the method selected by the purchaser.
- Both you and the customer will track the item during shipment. Step 6: Any subsequent customer service, such as consumer questions and returns, will be handled by Amazon.
- You will be paid every two weeks for sales made through Amazon FBA.
It’s worth noting that Amazon FBA can also be used to fulfill orders from other e-commerce platforms, such as eBay and Facebook, as well as your website.
Is Amazon FBA a good investment?
Sellers jumped at the possibility of simplifying the shipping procedure when Amazon initially launched its FBA service. Since then, Amazon has grown in popularity, resulting in increased competition and more significant fees. As a result, some people debate if Amazon FBA was still worthwhile in 2020.
There are a few considerations to consider when deciding whether Amazon FBA is right for you.
- Fees for Amazon FBA
Amazon’s rates are updated regularly. Regrettably, expenses nearly always increase. From January to September, monthly storage rates are $0.75 per cubic foot, and from October to December, they are $2.40 per cubic foot.
In addition, for each product you sell, you must pay a minimum of $2.50 in fulfillment fees (instead of shipping rates). This pricing is for the smallest size, which has a shipping weight of 10 ounces and a packaging weight of 4 ounces. Large items cost $5.42 for the first 3 pounds and $0.38 for each extra pound.
- Your Product Portfolio
Some products are more suited to Amazon FBA than others. It’s ideal to have little products that sell quickly to avoid paying costly storage fees. Large, low-cost products may have too many expenses to make them worthwhile.
- The volume of your work
Selling over the internet requires a significant amount of time and effort. Giving Amazon fulfillment may save up some of your time; after all, shipping will be one less thing to worry about.
However, using Amazon FBA will add a few extra activities to your to-do list. You’ll need to figure out how many products to deliver first. It’s critical to strike a balance between running out of inventory and paying excessive storage expenses. Second, you’ll need to gather supplies.
- Customers will benefit from lower shipping costs.
Amazon can easily negotiate better shipping costs with delivery services than your company because it is one of the world’s largest firms. In addition, Amazon Prime members get free two-day shipping on all FBA items. Customers will find your things significantly more desirable as a result of this. If you don’t offer free delivery, Prime customers may opt to purchase from your competitors.