What eCommerce Sellers Should Know About Amazon FBA

What eCommerce Sellers Should Know about Amazon FBA

So you’re an Amazon Seller and deciding to use Amazon FBA as your means of shipping? Great. Before you do, however, there’s a few things you should be aware of…

As you probably already know, Amazon FBA allows sellers to store their product inventory in Amazon fulfillment centers, from where they will be packed and shipped by Amazon, delivered directly to your customers.  In addition, once you’ve registered, Amazon FBA provides customer service and handles returns, if any. However, before you get all giddy and run off to sign up with Amazon FBA, there’s a few things you should be aware of…

Costs:

a) Amazon FBA will cost you.  You will be charged for the storage of your products in the Amazon warehouse, as well as for the fulfillment of the shipping. On the other hand, you will be eligible for free two-day shipping to Amazon Prime members (so in this case, neither you or the customer will pay for the shipping).  

b) If you were to handle all entire process yourself, from packing to transporting to shipping and delivery, all the shipping costs would be on you, as well as the time spent packing and shipping the products yourself.  Other factors to consider are the size of your products and how many you want to store in the Amazon warehouse.

However, remember that you need to pay to get your products to the Amazon fulfillment centers. Amazon does offer now Partnered Carrier Options to help ship your products to the centers at a reduced cost.

You need to ask yourself: will investing in Amazon FBA pay off for you in the bottom line? Is the convenience worth the cost? Or are you better off doing it all yourself?

c) Hopefully, you’ll be selling your products like hotcakes.  However, if you don’t, and your items are moving slowly, you might get hit with long-term storage fees (for over six months), which are seasonal.

Amount limit:

You might be surprised to learn that Amazon does not require sellers to “hit” a certain number of sales in order to qualify for Amazon FBA.  Even if you sell a small number of products, you can still use the service. Will it be worth for you, financially? Again, it’s all up to you.

As far as quantities are concerned, there is no limit on the number of products you can send in each shipment. That means you can pack in your shipment as many products as you need or can.

You don’t have to use Amazon FBA

All though it may appear that Amazon FBA is a “must use” seller tool, one doesn’t have to use it.  Instead, sellers can handle, ship and deliver the products all on their own, saving money and possibly earning more money. On the other hand, sellers then have to deal on their own finding a place to store products, deal with customer issues and complaints, etc.

You can use Amazon FBA to fulfill orders from other selling channels

It’s not a wildly known fact, but if you list your products on another selling channel, you can use Amazon FBA to fulfill those shipments as well. This gives you another option outside of Amazon to sell – but still, take advantage of Amazon FBA.

Expect the unexpected

Something unforeseen will almost always come up, whether it’s a country’s tax that hits you or a shipment miscalculation or whatnot.

You’ll have to wait a bit for the money…

So, you’ve started selling, shipping, products are flying off the shelf…so, where’s the money? You must be asking.  You will get paid – just not immediately. When you sell, Amazon charges the customer the item price, plus any tax if applicable.  It then takes its own percentage of the sale and sends the money into escrow. The reason for doing so is in case the customer decides, for whatever reason, to return the product.

Commission fees:

Amazon commission fees are separate from FBA fees, so even if you do not use FBA and do all the shipping and customer support yourself, you’ll still have to pay Amazon their commission fees.

Stick to Amazon’s guidelines and avoid your FBA account being suspended

Such as: having more than one account (you must request permission from Amazon); avoid using fake reviews; selling products of poor quality or selling bogus products or violating international property laws.  Breaching any of these will get your suspended, easy.

Get a head start with Algopix

Before starting to ship out your products, you need to know what are the best products for you to sell? Algopix can help you determine which are the best Amazon marketplaces to sell your products and when, in addition to vital data such as competitive analysis, sales estimator, and Google search results.  
All great things come with a degree of risk. In the eCommerce world, you would like to decrease your risk level. Researching & analyzing products and knowing what and where to sell can give you a distinct advantage.  Making sure you get sales requires a bit of research as to which products are best to sell, and in which Amazon marketplaces. Algopix can help Amazon sellers determine what marketplace they would be better off selling their products. Thanks to robust product research & analysis, sellers can save time, effort and money, focusing on marketplaces with the most potential for their products.

Leave a Reply

Your email address will not be published. Required fields are marked *