If you’re trying to pivot your business to e-commerce, you may be interested in Amazon’s FBA service.
The benefits of e-commerce are significant: NBC News found that in 2020, many businesses were forced to transition to online marketplaces due to the pandemic. In this case, these businesses were able to sustain their sales and even break records.1
Still, the logistical stress of e-commerce can dissuade many business owners.
That’s where Amazon’s Fulfillment by Amazon (FBA) comes in. By handling the entire fulfillment process, FBA is an strategy that allows businesses to focus less on logistics and more on what they do best: crafting their products. Read on for a breakdown of the program, the benefits of Amazon FBA, and its alternatives.
What Is Amazon FBA?
The fulfillment process begins when a customer clicks “Check Out” and continues until they get their order, or send in a return or exchange. The basic steps to the fulfillment process are as follows:2
Amazon FBA is the Fulfillment by Amazon program. Businesses send their products to an Amazon fulfillment center. There, Amazon takes care of the:
Amazon FBA even covers the customer service, returns, and exchanges for these Amazon orders. How much does this comprehensive service cost? Businesses can gain access to this program for $39.99 per month, in addition to selling fees.3
Pros of Amazon FBA
The benefits of Amazon FBA are immediately obvious, especially if your fulfillment infrastructure is small or nonexistent. We’ve also outlined a few additional advantages that you might not be aware of:
Cons of Amazon FBA
Despite these many advantages, Amazon FBA still has its drawbacks, including:
How to Join Amazon FBA
If you’re ready to join Amazon FBA, here are 10 simple steps:3
Alternatives to Amazon FBA
It’s important to remember that fulfillment by Amazon isn’t your only option. Amazon FBA is best for companies that:7
If your business doesn’t fall into these categories or if you’re still unsure about Amazon FBA, we’ll cover your other options below.
In-House Fulfillment
With in-house fulfillment, you take care of storing and shopping your orders from your business location or a secondary warehouse. This option is best for businesses who:
However, in-house fulfillment has some key disadvantages because it:
Many businesses start out with in-house fulfillment and as their business grows, transition to third-party fulfillment such as Amazon FBA.7
Third-Party Fulfillment
Amazon FBA is a third-party fulfillment program, but it is not the only option. It’s best to shop around to find which third-party fulfillment can offer you both the best rates and services. Whether you choose Amazon FBA or another company, here are the questions to ask yourself as you make your decision:8
Leverage Amazon’s Resources and PDM
So is Amazon FBA worth it? Leverage the pros and cons of Amazon FBA.
If you don’t already have fulfillment infrastructure and if you are interested in rapidly scaling your business and increasing your sales, then yes. For other businesses, Amazon FBA might not be right because the cost-benefit analysis doesn’t add up or because the direct customer relationship is essential.
To further scale your business and increase your sales, enlist our , Power Digital Marketing. We provide your business with a digital marketing strategy to elevate your brand and optimize your growth plan.
Reach out today to learn more about other Amazon features including Amazon marketing cloud, what is AWS, and what is Amazon Explore.
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