Most of us know by now that Amazon is the largest online retailer. People often go directly to Amazon when considering a purchase before searching anywhere else.
And, when they do implement a search, Amazon’s extensive marketing and SEO techniques usually bring them to the top of the search results.
So, why not take advantage of their marketing to promote your own products? Amazon has provided a platform for you to do just that.
So, what exactly is Amazon’s “Fulfillment by Amazon (FBA)?”
With FBA your products are stored at Amazon’s fulfillment centers. They do the packing, the shipping, and the customer service. PLUS, products sold can be eligible for Amazon Prime’s Free Two-Day Shipping, Free Shipping, and other benefits provided directly by Amazon.
Additionally, many buyers choose products by FBA sellers instead of merchant fulfilled sellers, even when the price is higher, because they know it comes with Amazon’s reliability.
Additionally, you can now automatically market your products across most of North America. When you register for an Amazon.com seller account, you can enable FBA for products you list to be seen on Amazon.ca and Amazon.com.mx. This allows you to sell on Amazon’s marketplaces in Canada and Mexico, reaching even more customers.
Referrals – How Amazon’s FBA Increases Your Marketing While They Sell Your Product
I’m sure if you’ve made a purchase on Amazon, you’ve noticed the area at the bottom of each product page headed “recommended purchases.”
What you may not have realized, is that they include FBA products in this section as well. This means a buyer on Amazon gets exposure to your product as well as theirs, increasing your exposure.
And, Amazon affiliates will also link buyers to your items through blog and social media posts.
What It Will Cost You.
You will be charged for storage space and the orders they fulfill. The cost of shipping is included in your fees, with no extra charge for Amazon Prime’s FREE Two-Day Shipping and FREE Shipping on eligible orders. Fees for optional services may apply.
Upload your product to the FBA platform, finalize your listing and then box up your products and ship them to an Amazon distribution centre.
Once your items arrive and are scanned in at the distribution centre, they’re live on Amazon. If items don’t sell within the pre-set time period, you can either pay storage fees or have them returned to you at your expense.
As with any new addition to your business plan, there are pros and cons to weigh before making a final decision.
- Enormous Customer Base-As one of the largest online retailers, Amazon’s users are looking to shop.
- Credibility and Trust-buyers are comfortable going to Amazon.
- Excellent Support-Everything from inventory tracking, tax collection, and credit card processing is already set up with Amazon’s platform.
- Fees-These start at a minimum of one dollar and can go as high as 25% of the product’s price.
- You’re a Commodity-On Amazon you’re mostly a commodity. This means there will be other merchants under cutting your prices. Plus, you’re competing directly with Amazon for any products they sell.
- No Control Over Branding-Unlike on your own site there are fewer options to promote your own brand.
- Lack of Customer Loyalty-Customers are finding your products due to their loyalty to Amazon, not you.
A Note on Keeping Your Own E-Commerce Website.
At this point, you may be thinking that this could replace your own e-commerce site. Many experts recommend keeping your existing site as well. The primary reason being, when you sell on other platforms, you don’t actually own your shop.
They will reserve the right to manage your product listings, and not always in a way that is in your best interests. This could even include preventing you from selling within a certain category if they can make more of a profit selling the similar items in-house.
Overall, Amazon’s FBA platform is an excellent opportunity to increase your market exposure, sales, and distribution without having to increase your own storage and shipping facilities.