One of the many challenges of a startup company is how to sell to a bigger market. The costs involved in marketing to different marketplaces, as well as the logistics for delivering to customers are extremely high. These costs almost cripple the startup company immediately after launch.
Thanks to Amazon and its Fulfillment by Amazon model that allows startup companies to sell in a global market. This has become a staple when it comes to startup companies introducing its new products to the world.
What is FBA?
FBA or Fulfillment by Amazon allows a startup company to store and distribute its products via Amazon. It takes care of storage and warehousing, picking and packing, shipping and logistics, and customer service. That’s on top of selling inside Amazon and/or via your own eCommerce store.
All you need to think about is to find a credible partner that will handle the prep and forwarding from your supplier to Amazon, such as FBABEE. This partner takes care of preparing and picking up your inventory from the source country, such as China, India, etc., then shipping it into their company in the US. Click here to go on fbabee to know more about their services.
The main advantage of using FBA is having the world-class reputation. The company’s efficient and effective systems, processes and technologies have built it into what it is today.
Its solutions and processes have been used by many leading companies as well. Amazon is the world-class standard in e-Commerce and online retail fulfillment.
Amazon Prime qualification
Signing up for FBA automatically qualifies you to Amazon Prime shipping. This means that all Amazon Prime members who will buy your products will enjoy a free two-day shipping. Obviously, this will make you a trusted seller to your customers because they’ll be confident that they’re going to receive their items quickly at no additional cost.
Win the coveted Buy Box spot
As part of the FBA perks, you’ll get to win the Buy Box spot that a lot of sellers are competing for. This is a box on a product detail page that allows customers to start its purchasing process simply by adding items into the cart.
With a lot of company selling similar products in Amazon, it’s best if your product is featured in the Buy Box instead of other sellers’ product. This gives you a higher chance that your product will be bought.
Hassle-free shipping and logistics
One of the greatest perks of FBA is the hassle-free shipping and logistics. Since these are all handled by Amazon, there’s no need for you to spend a lot of time in this task. More importantly, you’ll be confident of the entire fulfillment process knowing it is being taken care of.
Multi-channel fulfillment advantage
Another great thing with it is that you don’t only take advantage of the things you selln, but you can also sell through any other channel. Amazon remains to be responsible for all fulfillment needs even if you’re selling through other channels.
Capability to sell more
With all the solutions and advantages of FBA, there’s a greater chance that you’ll sell more products. The Buy Box alone gives you the advantage of higher visibility to potential customers over those that haven’t signed up for FBA.
Inventory tracking is challenging
Growth in the number of your product offering can sometimes be a disadvantage when using FBA. Since not all of your products will sell, it can be tricky to monitor and manage inventory. Since all of your products are stored in it, knowing what you currently have, what you really need and what you need to cut can be challenging.
Potential increase in returns
Amazon offers a very easy returns process. That also means that any customer who will buy your product can easily return whenever they find a reason to. This potentially can increase returns of your product. This is true most especially for impulse and test buys from your customers.
Cost for using and maintaining FBA
Amazon’s FBA is not free. You’ll have to pay a fee based on the number of inventory They are going to store for you and the length of time it is stored. This may prove costly if you’re unable to keep track of your sales volume versus inventory.
Complicated shipping preparations
Amazon will not be responsible for the logistics of your products getting into Amazon. You’ll be responsible for delivering your products into it.
That’s why you will need a partner who can help you go through the complicated shipping process, such as FBABEE. They will take care of picking up your product from the source to Amazon as well as comply with Amazon’s stringent ASIN/UPC system.
As with any business solution, there’s significant pros and cons to consider when utilizing FBA. However, the advantages of using it proves to be heavier than the risks and costs. As soon as you’re able to establish your business in Amazon with the help of FBA, the next step is to find new methods to successfully grow your FBA business.