The Amazon FBA has been Instrumental in making some lucky individuals some very good money. By enrolling in the FBI or Fulfilment by Amazon program, you get to benefit from services such as advanced shipping, service fulfillment, and higher earning potential. Around 66% of the 10,000 sellers on Amazon are taking advantage of the platform.
We will take a look at the Amazon FBA below. You can also get additional information on traffic tsunami.
How Does It Work?
The Fulfillment by Amazon works in the following way:-
- You will need to ship your products to Amazon
- Amazon will store the items in their warehouses. You get reimbursement if anything happens to your items
- A customer will place an order for a product on your ecommerce platform; Amazon will then package and ship the items directly to the customer
- In case a customer wants to return the items or seeks a refund, Amazon will handle the process for you.
- You will get payment every two weeks. Amazon will deduct their fees directly and deposit your money in your account.
What Is The Cost Implication?
As you can expect, Amazon will not do the work for free. You will pay storage and fulfillment fees.
What Is Your Role In The FBA Model?
You still have a very active role even though Amazon takes on a chunk of the responsibility. You will still need to: –
- Decide on the products you want to sell, and source for them. Make sure the product you choose is one that actually moves; otherwise, you will find yourself paying storage space for dead stock.
- You must keep track of the inventory so that you ensure that Amazon always has your items.
- You must also do some marketing and advertising, especially for very niche or custom products.
Why Should You Use The FBA Business Model?
The FBA model makes the process of selling your products quite easy. Amazon takes on the role of managing customer queries, handling all the shipping aspects with best shipping boxes at discounted rates, and taking care of returns and refunds. Using their storage means you do not have to factor in the cost of warehousing in your business costs. They also take on the burden of inventory management from you.
Disadvantages Of Amazon FBA
- The main problem is you have to pay specific fees, including storage and fulfillment fees. Whether your products move or not, you will still have to pay the storage fees.
- The process of preparing the products for shipping to Amazon is also challenging. The company has stringent guidelines to which you must adhere.
- You must also stay on top of tracking inventory, or you will run out of stock without knowing.
Would We Recommend Amazon FBA?
The Amazon FBA business model will significantly ease the process of selling your items. With so many other sellers making massive profit on the platform, we would recommend it to any entrepreneur. Take your time to understand the requirements, and calculate how the fees will impact on your bottom line. You can then decide on whether or not to come on board.