I’m an unabashed fan of Amazon Prime. After all, what’s not to love about items shipped in two days or faster, Prime Day, video and music streaming, and unlimited photo storage? It’s pretty great — from a buyer’s perspective. But what about for sellers? In this post, we take a look at the pros and cons you can expect with Amazon FBA.
Pros of Amazon FBA
While there are disadvantages of Amazon FBA, let’s take a look at the awesome stuff first.
Can Reach Prime Customers
For all the reasons I listed in the intro, customers love Amazon Prime for them, too. And they also tend to spend more than their non-Prime cousins. So if there are more of them and they contribute more money to the marketplace overall, getting access to them can be a very good thing.
More Sales
If I’m looking at two identical products and one has free, two-day shipping and the other will take two weeks and 20% more in cost to arrive, which one am I going with? That’s the mindset of most Amazon buyers, so FBA can significantly up your sales.
Buy Box
Over at our sister site, RepricerExpress, we wrote about all the benefits that come along with having a Buy Box, with the biggest upside being increased sales. Like, dramatically increased sales.
Shipping is Super Easy
So easy, in fact, that you don’t have to worry about it. At all. Amazon will handle all the details for you, from picking the product and packaging it to making sure it gets to the buyer in time.
Expert Customer Support
Sell on Amazon long enough, and it’ll be inevitable that you’ll get buyer questions, complaints, and maybe even returns. It can be fairly demoralising to deal with that on a regular basis, but with FBA you don’t have to — Amazon will take care of it for you.
Cons of FBA
To recognise the good in something, you need its opposite to act as a barometer. And because Amazon FBA isn’t perfect, here are some of the drawbacks.
Higher Shipping Fees
Because you don’t get a say in which shipper to use, you’ll have to pay Amazon a standard rate for it. Some sellers may be able to find better deals off Amazon, and FBA might cut into their profits.
Higher Storage Fees
With FBA, you’re not just paying for storage, but also varying rates depending on the time of year you’re storing products. From October to December, you can expect to pay about 3x more in storage fees. There are also long-term storage fees if your products have been sitting around for a while.
Higher Returns
Buyers love any sort of return guarantee, which means returns unfortunately are higher with FBA. There’s also the chance that Amazon might deem a product unsellable and you’ll have to pay. This can be especially frustrating if you personally see nothing wrong with the item.
Higher Chance of Mismanaging Inventory
If you don’t physically see your inventory on a regular basis, it can be easily to fall victim to the ‘out of sight, out of mind’ way of thinking. And if that happens, it can be really easy to forget about what you have in stock, forget to order properly, and risk paying long-term storage fees. However, you can mitigate this with inventory management software.
Possible Trouble With Fungible Items
Fungible means an item is interchangeable with another item, like how four quarters are fungible with a dollar or a kilo of gold is fungible with a one-kilo gold ingot. But when it comes to Amazon products, fungibility isn’t necessarily a good thing. This can result in similar items from similar sellers going to different buyers and getting both orders screwed up. And that can lead to delayed payments because the various product IDs don’t match.
Final Thoughts
Whichever route you choose, there’s one thing that should never be a question: using FeedbackExpress. You’ll need to work hard on getting feedback no matter which method of fulfillment you choose, and we can make things really easy and stress-free for you by handling all the work you don’t want to. In fact, we can start right now when you sign up and enjoy the first 14 days totally free.
