Is Amazon FBA Worth It?

Amazon FBA, or Fulfillment by Amazon, is a service to help Amazon sellers outsource shipping to Amazon. Sellers involved in Amazon FBA send products to fulfillment centers, where the corporation handles packing, shipping, customer service and returns. But is Amazon FBA worth it?

Let’s start with the advantages of selling on FBA. As an Amazon seller, your product is visible to the nearly 3 billion monthly visitors of the ecommerce giant. For small businesses, having products listed on a website that receives millions of daily visits is a valuable opportunity. FBA sellers also are given the Prime badge, providing access to the more than 80 million Prime subscribers.

Additionally, the Amazon FBA program takes over the logistics of selling your inventory, giving you more time to focus on other aspects of your business, such as product and brand development, to make your business grow and flourish. It can provide peace of mind to know that Amazon representatives are addressing the needs of your customers around the clock.

The barrier to entry for Amazon FBA is low, which can be both a blessing and a curse. It means that getting started on the platform is easy, user-friendly, and accessible for businesses of all backgrounds. However, it also means that the level of competition is higher than it may be with other ecommerce services, including competition from Amazon itself, through its label Amazon Retail.

There are costs associated with FBA to consider. As with most ecommerce services, the FBA program comes with fees. For most products sold on their platform, Amazon deducts 15 percent from sales. Products under FBA also have a fee deducted to cover shipping and handling costs. For businesses selling a high quantity of products a month, these costs may be worth it, as the profit far exceeds the FBA deductions. However, it could put a strain on businesses not generating as many sales.

When you sign up with Amazon FBA, you are handing over a certain amount of control to the company. You won’t be in control of branding through things such as packaging, and you won’t have contact with your customer base. This may not align with the values and goals of some small businesses.

Statistics show that Amazon FBA can give businesses a significant boost. However, those results are not guaranteed, and it is important that sellers consider the different aspects of the program, and whether or not it will be advantageous for their business. Amazon FBA is a great option for sellers with a product that consistently sells at a moderate to high rate, but it may not be as useful for smaller-scale sellers. So is Amazon FBA worth it? That depends on you and your unique business. Whether or not FBA is for you, Listing Mirror can help simplify your ecommerce operations by helping you keep on top of listings across multiple channels, coordinate order fulfillment, and synchronize your inventory. See the difference we can make for your business today with your 14-day free trial. Click the button below to get started!

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