Do you want to increase your order volume on Amazon but fear that you'll struggle with handling and fulfilling all those orders correctly and on time? Then you should consider Fulfilment by Amazon (FBA). It can even help you boost your sales, as it makes your products eligible for Prime. In a recent study, 78% of sellers confirmed that their sales went up after joining FBA.
So, FBA has been highly praised by many. But is it really the Holy Grail of eCommerce? Find out in this blog post.
What is Fulfilment by Amazon and How Does It Work?
FBA, as you might have guessed already, is a fulfilment service provided by Amazon. Essentially, this means that you send your goods to Amazon, where they are then stored. As soon as a customer purchases one of those items, Amazon will pick, pack, and despatch it for you.
Using the service is relatively straightforward. Simply select the ‘Fulfilment by Amazon’ option when listing your products. Amazon will then guide you, step-by-step, through the process of shipping your goods to the relevant Amazon Fulfilment Centre, as you need to be aware of packaging and labelling rules. Your products will then be safely stored until somebody buys them.
As soon as an item has been purchased, Amazon’s web-to-warehouse picking and sorting system picks, packs and despatches it straight to the customer – all over Europe and at high speed. Amazon will also provide the customer with a tracking number, where applicable.
Amazon then also handles the customer service for the purchase, in their local language if you are selling internationally. It also takes care of refund and return requests and resolves such issues directly with the customer.
To sum up, Amazon manages all the tricky bits of fulfilling your orders for you.
How Does It Benefit My Business?
Using Fulfilment by Amazon comes with a whole list of advantages:
The most significant benefit, as mentioned above, is the fact that it automatically entitles your listings for Amazon Prime and they are labelled accordingly on Amazon.
Amazon Prime is a very popular membership programme for Amazon customers, providing them, for example, with One-Day delivery. Naturally, as they pay for their subscription, Amazon Prime customers are very loyal, order frequently and clearly prefer Prime listings over others. This means your listings suddenly become relevant for an incredibly valuable target group – which can increase your sales rapidly.
But that’s not all. Listings that are eligible for Prime also have a significantly higher chance to win the Buy Box. And once you are in the Buy Box, your sales figures will soar like a rocket!
In addition to that, customers in general prefer products that are Fulfilled by Amazon. This is, amongst other things, due to the reliability of the service. FBA deliveries are fast and accurate.
FBA is not only preferable from the customer's perspective. For you as a seller it means less hassle and effort. You don’t need to worry about storing items, or about packing and shipping them in time. You don't even need to worry about customer service, as Amazon manages that for you in a professional manner as well. It is all done for you – and not only nationally, but all over Europe! This makes selling internationally so much easier and allows you to penetrate entirely new markets without much effort.
Sounds Great – What's the Trap?
One could argue that nothing is perfect. Neither is Fulfilment by Amazon. The biggest downside of using FBA are its costs, which can chip away a significant amount of your revenue.
Especially, as they come in addition to Amazon’s usual seller fees. However, handling fulfilment by yourself is often not exactly cheap neither. So, you will have to figure out which solution is best for your business. To do so, take a look at FBA’s pricing and Amazon’s seller fees in general.
Also, be aware that you lose control over the fulfilment and customer service processes once you send your items over to Amazon. While it reduces your effort, it also means that you won’t have any influence on how the product is handled or any chance for personalisation. Depending on the products you are selling and the level of service you wish to provide, you might want to consider fulfilling yourself.
As you can see, Fulfilment by Amazon is not necessarily the Holy Grail of eCommerce. It really depends on your individual business needs. But it is worth comparing with your other options.
No Matter Which Way You Go – We Will Be There With You
Whichever route you go down – whether you want to use FBA or handle fulfilment by yourself, your Cloud ERP software has your back. It will help you organise, manage and fulfil all your orders with its Amazon integration. From anywhere and whenever you want.
This is Khaos Control Cloud. Try it now for free!