Advantages and disadvantages of amazon fba

A lot of sellers prefer Amazon FBA since it takes a major workload off their shoulders and helps them serve their customers faster and more efficiently. However, there are a lot of issues that come with it, the biggest being discrepancies in payments.

Below is a list of all the advantages and disadvantages of selling with Amazon FBA:

Advantages of Amazon FBA:

1: Shipping: 

Amazon handles shipping and delivery of your products for you. You only need to make sure that your products are in stock.

2: Less shipping charges:

Amazon ships around 1.6 million products per day. Dealing with shipping so many products on a daily basis, it has definitely cracked shipping at low rates. So be assured you will pay less money in shipping via FBA.

3: Returns: 

Amazon also handles returns and refunds for you, reducing your work even further.

4: Customer service: 

Amazon provides its own customer support to sellers selling through Amazon FBA.

5: Prime delivery: 

By selling through Amazon FBA, your products will reach your customers through amazon prime’s 2-day delivery improving customer experience further.

6: Storage space: 

With amazon fba, you have almost unlimited storage space for your products at multiple locations all over the world.

7: Omnichannel fulfillment: 

Amazon FBA not only handles shipping to amazon customers but will also fulfill orders from competing sales channels.

“Nothing is perfect in this world.” Not even Amazon FBA.

We know the above statement is a bit of a stretch but let’s dive into the disadvantages of Amazon FBA.

Disadvantages of Amazon FBA Cons:

1: Cost: 

“Nothing good is free in this world.” Neither is Amazon FBA. Amazon FBA charges fees for their services. For really early staged sellers who are experimenting, every $ is important and so paying Amazon FBA fees is not financially viable for them. Also for low-cost products or products which operate at a very low-profit margin and sell in low quantity, FBA might not be a good option. We personally recommend sellers selling more than 40 items per month to consider selling via Amazon FBA.

2: Increase in the number of returns: 

There have been sellers who have seen an increase in the number of returns after they started selling through Amazon FBA. This is due to Amazon’s open return policy.

3: Long-term storage fee: 

Neither you nor Amazon like products sitting idle for a long time. For products stored for more than a year, Amazon charges almost 3 times.

4: Product prep requirements: 

Amazon has a list of requirements for the products that want to use its FBA services. These include how they are packed, labeled and shipped to Amazon’s warehouse per amazon’s guidelines.

5: Sales Tax: 

Different states have different taxes. So in case your business is registered in one state and your products are in a warehouse in another state, there might be confusion regarding taxes.

6: Reimbursements: 

This is the elephant in the room. Amazon is efficient and almost seamless. But issues arise when dealing with billions of dollars worth of products. People have lost hundreds of thousands of dollars in refunds owed to them by Amazon. This is because their system is too complicated even for very experienced sellers. Due to this, they end up not getting the refund that Amazon owes them. https://extreme.app/repay/ has a team that handles reimbursements from Amazon FBA for you. They do it on a commission basis. So they earn only when you earn. We suggest getting in touch with them to get maximum refunds from Amazon.

All said and done, it is upon the seller to decide whether Amazon FBA can be an advantage for them or not. Feel free to connect with me at [email protected] for a free consultation on how you can optimize your amazon business or just to brainstorm.

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P.S. Happy Selling :