Is it good to start Amazon FBA business? Here are the pros and cons of using Amazon FBA for your online business.
First, let’s take a look at what exactly is Amazon FBA.
Amazon Fulfillment by Amazon (FBA) is a service where Amazon will manage your inventory, pick and pack your goods when an order comes in, ship your goods to the customer, and even handle customer service related to those goods.
The upside is that you don’t have to worry about the day-to-day operations of your business. You can spend all your time looking for new products and sourcing them while Amazon handles everything else.
Amazon also has very competitive shipping rates with their volume shipping discounts. This makes it possible for you to offer free shipping on all orders, which has been shown to increase sales conversion rates on eCommerce sites like Amazon.
The negative side is that you are locked into selling through the Amazon platform because you have inventory stuck in their fulfillment center. That means if you have a dispute with them or they decide to change the rules on you, there isn’t much you can do except try to sell through another website like eBay or Walmart Marketplace.
When you find a product that you want to market, the next step is to create a web page for it. Amazon will give you code to put on your own website so that when people click on the Amazon ad or banner from your site and buy something from Amazon, you receive a commission. There are two options to create your web page:
Create an eStore using Amazon’s Webstore by Amazon service. This service is free, but has limitations. You can only sell Amazon products through this store, and there is a limit of 10 items you can showcase at a time.
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Create your own website using WordPress or other software. You can design your own website, but this requires some knowledge of HTML coding and graphic design. If you aren’t familiar with these topics, you can look for a web designer to help you. The advantage of creating your own web page is that you have complete control over the look and content of your site and can also include non-Amazon links, building a more extensive online presence that may attract more customers.
Amazon FBA is a useful tool that makes it easier for sellers to get their products in front of millions of potential customers. It also gives third-party sellers the same benefits that Amazon customers have come to expect: fast shipping and top-notch customer service.
But FBA is not a magic bullet for ecommerce success. It’s not even a guarantee of profitability; after all, you still need to cover the cost of your goods, plus the cost of shipping them to Amazon warehouses and the commissions and fees charged by Amazon itself.
For those who are willing to put in the time and effort it takes to be successful, FBA can be a fantastic way to get started in ecommerce or grow an existing business. For this reason, it’s a great option for anyone who wants to sell goods online but doesn’t want to deal with order fulfillment themselves.