The Fulfilled By Amazon business model is all the rage right now. The benefits are many, while the risks of handing most of the reins of your business over to the online ecommerce giant are really very few. This is, of course, provided you understand that operating on someone else’s platform means you have to follow their rules.
I would like to state, most adamantly, that as a regular Amazoner, I won’t purchase anything that isn’t Prime Eligible. It’s just not worth my time to save a few bucks buying from China, or trusting some random seller far away from me to get the product I want to my home in a timely manner.
Maybe, some of you out there feel different, but even though I don’t use the Prime service (other than two-day shipping, there’s no other benefit for Canadians currently), those items marked as eligible tell me that Amazon is fulfilling the order and that it’s located nearby. I won’t have to wait the full ship time on whatever option I choose for shipping either, because their warehouse staff is blazing fast and very accurate (ie., few to no screwed up orders either).
That’s just my personal opinion, but those who have my level of Amazon buying savvy know what I’m talking about. We want it fast and don’t feel comfortable giving up our money to some random seller in the marketplace who can take your money and then make you wait until they’re good and ready. Nor do we have to pay return shipping on items that fail to satisfy when dealing with FBA, only to have to wait a month or more for a refund.
Using the Fulfilled By Amazon option to get your orders out to customers takes virtually all the hassles out of getting customers their products.
Here’s 5 benefits you’ll get when using FBA:
1. You’ve got more time to do the important stuff.
Rather than processing FedEx orders all day long, and dealing with your phone blowing up with questions and complaints, you can work on growth-oriented tasks to secure the future of your business. For instance, working on ways to direct traffic to your Amazon page (ie., blogs, landers, social) and search for more products to add to your page listings.
2. Perks ya’ll. Amazon perks!
Amazon has some of the best customer service on the planet. Really, they’re that good! I’ve never had a bad experience. They’ll treat your customers right and can offer next day or two day shipping for all those eager customers who want their shipment 12 hours after they order. You, the seller, get the benefits of being part of an ecommerce marketplace that’s (presumably) full of customers looking for your products.
Get lots of sales and you’ll rank right up there in the Amazon SERPs and make even more. Get your products bundled with other items often and you’ll rank in the popular “People also bought” category.
3. Your business is primed for growth as soon as you sign up with FBA.
Want to scale your business into a national and international distributor? Not hard with Fulfilled By Amazon. They have warehouses close to most every major city and town around the world. You give them as little or as much of your products as you want to sell, tell them what area you want them available out of, and watch your business grow with your inventory levels.
Plus, they have the customer service process dialed in already — that’s 50% of your growth strategy taken care of right there!
4. Virtually a hands-off business.
Not only is the logistics side taken care of with FBA, you don’t have to do the grunt work to get customer’s eyes on your product. The more proprietary, unique, and in-demand your products are, the easier you can corner the market.
Sure, you’ll have to do some work pushing extra traffic to your product pages, but it’s a drop in the bucket compared to starting your own ecommerce website from scratch.
5. Profits baby!
Think Amazon fulfilment will scratch into your bottom line? How exactly would that happen? You’re using less manpower throughout the entire fulfilment and returns process. Spending bucket loads less on marketing. And paying less labor and administration costs with the warehousing, shipping, and customer service you’d need to do it all on your own.
The only added cost is a few fees Amazon collects – you can use this Amazon revenue calculator to calculate your fees – to process your orders for you. And, of course, getting the product from your facility to their fulfilment centers. You won’t find any sellers who’ve embraced FBA complaining they’re losing money on this deal. Mo money, mo money!
Is Fulfilled By Amazon right for your business?
If you want national and/or international exposure for your products, then FBA is definitely what you’re looking for. I’ve outlined why customers would rather deal with Amazon directly in the first paragraph.
The real question you should be asking is what’s stopping you? They take whatever inventory you have to supply and hang on to it, keeping it safe until someone buys it. Then they ship it out at the speed of light, greatly increasing the perceived value and potentially pumping your ratings (long shipping can practically make a brand new iPhone look like a flip phone from 2006 in some customer’s eyes).
If, on the other hand, you serve a largely local market with niche products that only have an appeal for certain people, you might be best off signing up for a basic seller account and handling your own inventory, shipping, and returns department.
For most online sellers, Fulfilled By Amazon is the only smart way to go. Unfortunately, many businesses who would benefit from this service will avoid it because they’re afraid of fees and more fees. The reality is that all who use it love it, and love all the different ways FBA adds to their profit margins, rather than takes away.
If you think that FBA is the way to go, you can get started by equipping yourself with the basics. Resources and guides like Jeff Lenney’s Learn to Sell on Amazon can offer you the necessary steps required to get started with your Amazon store.