Most new sellers on Amazon would create a personal account because it needs no registration fee. Some startups are ready to pay for the more increased sales fee, instead of settling for the subscription fee for a skilled account. You may be complicated now with the number of payments needed to be capable to sell on Amazon. Fortunately, enterprise experts can instead go via the process for you. Is Amazon FBA Business worth it? Below is a quick run-through of what FBA is — the procedure, fees, and ROI forecast.
How does Amazon FBA Business work?
FBA, or Fulfillment by Amazon, is a schedule that allows Amazon to take charge of storage, packing, and shipping on behalf of its sellers. On the lid of these services, Amazon also accepts charge of customer questions, such as rescues and exchanges.
The tracking is an outline of how Amazon FBA Business works:
- Seller prepares the items;
- Seller sends the products to Amazon. If you are doing wholesale and bringing your products straight from a manufacturer, you have the opportunity to send your products straight to Amazon’s nearest warehouse;
- Buyer purchases an item;
- Amazon shall design the package in conformity with your education; and
- Amazon shall ship out the parcel and guarantee that it gets the buyer within two days, and in excellent condition.
Amazon FBA fees
Like most services available online, you can hope that the FBA program comes with a price. For starters, Amazon removes 15% from sales for almost all products on their platform. Under FBA, Amazon will remove another fee for the shipping and handling of your customers’ orders. Most of the time, the cost is lower when compared to you living the one to process and ship the charges yourself. If you are using an individual seller account, you will be charged another dollar for each product. This additional $1 per product is only applicable for individual accounts as professional seller accounts pay a $40 monthly subscription fee.
FBA vs. FBM
FBM, or Fulfilment by Merchant, provides the same opportunity of being able to sell on Amazon. However, all the business operations– jumping from product conceptualization to logistics and shipping, to customer care and control — shall be done by the seller alone. This may say like a lot of hard work, but it also has its benefits. FBM is really recommended for small-scale businesses that target to sell below 40 effects a month.
FBM works best for sellers with large-sized products that sell slow. This is ideal for sellers who have their own storage space and want a more hands-on method to handle customer transactions and problems. FBA, on the other hand, is perfect for sellers with small products that sell fast and easily. Despite the discrepancies, a seller can even register for both services for the different products that they offer.
With Amazon delivering the option to handle the logistics and management for you, you can focus on developing your products and brand. When subscribing to FBA, the observing are the duties of the seller:
Doing market research and learning which products sell best are your top importance as a business owner. With millions of available products on Amazon, you have to make sure that your products and your brand are recognizable, even if you are a reseller offering directly the same thing as other shops. You could do this by including unique personal packaging or delivering product bundles. Whatever you are selling, you have to have it prepared and designed for shipping before it goes to Amazon’s warehouse.
Inventory and stock replenishment
As a business owner, it is also your duty to ensure the smooth process of your business. This contains making sure that products are completely stored at all times. This may seem like something that’s a little too basic and obvious. Nevertheless, a healthy list is actually one of the deciding factors in Amazon’s ranking method. If what you are offering is a fast-selling product, it would be advised that you regularly monitor the checklist.
Posting of listings
Right before sending your products to Amazon’s warehouse, you must first put up a listing on the website. In doing so, you must confirm that your listing is SEO-friendly. This concerns including keywords in the product title, maximizing the places for the product photos, uploading enticing product photos, and setting short and direct-to-the-point shot points.
Even though writing for the FBA program provides enough benefits to make your products known to Amazon Prime members, you cannot just call it a day and be arrogant. Thousands can also sign up for the FBA program, so you should still give focus on marketing for maximum traffic and exposure. Fortunately, Amazon has multiple internal advertising agendas that can help you.
How do I start an Amazon FBA business?
Although FBA is already a form of trade in itself, factors like product rate, availability, and competitiveness are still up to the seller. It would be okay if you describe why the buyers need your product and how your product is better than the rest. These are just some of the points to consider when you start your FBA business.
To create your Amazon FBA business, you must first have an Amazon seller account. You can use this tab to register for FBA through Seller Central. The following step is to put up your listing on Amazon. Once done, you can then design your product and ship it to the nearest Amazon warehouse.
Advantages of Amazon FBA
Here are the causes:
You save a lot of time
By signing up for the FBA program, you get to focus on making your business grow. You get to sleep comfortably, learning that Amazon experts are taking care of your customers’ needs and concerns 24/7. You also save time by not stressing out on customer returns and moving to and from courier posts to ship your items.
You get the Amazon Prime badge
Amazon already has better than 80 million Premium subscribers. To this day, better and better buyers subscribe to Prime because of the free and fast shipping help that it offers, among many other privileges. In addition, having the ‘Fulfilment by Amazon’ tagged to your brand automatically makes consumers trust.
You have higher chances of getting the Buy Box
The Buy Box can be seen on the lower right side of a product page, where the ‘Buy now button is found. More than 80% of Amazon sales are driven through the Buy Box. This is why brands battle tooth and nail to be capable to have it.
Disadvantages of Amazon FBA
Though marking up for FBA has its perks, it is not for everyone. For starters, FBA would be most useful for sellers who sell at least 40 items a month. For accounts that have a lower amount of sales, FBA power consumes the profit as compensation for their service.
Here are some more penalties of the Amazon FBA Business :
You lose control
Once you send your products to Amazon, you let the characters take over. You do not be capable to put any more branding on your products, and you won’t be able to get in touch with your customers. Amazon FBA will even use its packaging and title to mark your products.
You pay fees
While paying fees isn’t exactly a disadvantage, it could be if you do not make a lot of sales. FBA will ask for shipping, storage, and handling costs on top of the 15% referral fee for using their platform.