The percentage of people who shop online is increasing every year. In the US, as of 2022, more than 70% of adults will choose online shopping. After all, it is fast, convenient, and often more profitable than going to ordinary stores. And Amazon can be considered the leader among marketplaces. Moreover, in addition to its primary task, the company implements some projects aimed at simplifying the life of sellers.
What is FBA in Amazon?
One of the latest such developments was FBA. It literally stands for Fulfillment By Amazon. This program allows you to redirect all the work related to packing and shipping orders directly to Amazon employees. What are the advantages of using this service? Let’s discuss that.
1. Amazon handles order processing
You send a specific volume of goods to the order fulfillment center in advance. And after the buyer places an order, Amazon will independently find the necessary products, pack them according to all the rules and process the delivery. This is a beneficial offer for sellers, which consists of the fact that all services for packaging and sending the order are taken care of by Amazon.This significantly simplifies the life of entrepreneurs because you can delegate all the work of placing an order, including contacting the client and organizing the return or exchange of the product.
2. Amazon handles all payments
All payments for orders will go through Amazon. Various ways of paying for orders have already been thought out on the site: the store accepts cards from any bank. That is, you do not need to configure payment methods for your customers, search for different ways and solve problems that arose at the stage of paying for the order.
3. Amazon makes product returns
If the customer does not like or does not fit the product, it is necessary to process its return. This is a process that requires time and effort. At such moments, the seller cannot process the current order because he communicates with the buyer about the reason for the return and finds the optimal solution.Amazon handles all communication with the customer, including the return and refund processes. The product will not be returned to your store or home but will go to Amazon’s warehouse. Also, the company returns money to the buyer, saving you from the need to keep accounts.
4. Availability of warehouses
Suppose you previously held products in a separate room, garage, or rented space. In that case, you can now send them to Amazon warehouses. With Amazon FBA, you no longer need to find a place to store your products.This solves many problems:
home storage often does not have an organized system, and goods can get lost;
Amazon provides the proper storage conditions for each individual product category;
any goods are subject to preservation, regardless of their quantity, dimensions, specifics, etc.
5. Large customer base
All members of the Amazon FBA program automatically gain access to the customer base that visits the site. This way, the seller immediately receives millions of potential customers from around the globe.You will no longer need to look for your target audience. They are already on Amazon and will find your store themselves. According to the data of the last few years, it has been proven that more than half of the US residents are not looking for products on Google but on the Amazon website.
6. No employees are needed to start
The company relieves sellers of the need to look for employees who would be engaged in the following:
packing and sending goods;
processing questions and complaints (customer support service);
processing the return and exchange of products.
All these issues will be resolved directly by Amazon employees. They not only find and deliver orders but also work as a support service, communicating with your customers and establishing a connection.
7. Amazon has training
If you are ready to sell on Amazon but need to know where to start, you can take a course that will reveal all the rules and secrets of the trade. Such lessons and articles allow you to open a profitable business, avoid many mistakes and count on a quick profit without significant expenses.You can use freely available information. Or you can participate in the Amazon training camp — a step-by-step course for new sellers — created and developed by the company’s mentors.
8. Many tools for analysis
This service is especially relevant for beginners who are just starting to trade and do not know how to correctly calculate the cost of goods. An incorrectly estimated and underestimated price is one of the most common reasons a business does not bring profit.All FBA customers have access to the calculator. Using the methods, what Amazon FBA by Amazon calculator offers sellers, it is possible to:
analyze the market and direct competitors;
determine the cost of the product;
correctly calculate its final cost;
find out what profit the development will bring.
Also, the site presents some programs and tools that allow analyzing the profile and sales. This can be a motivation to improve business and improve all processes.
9. Business is independent of location
Retail sales can be made from anywhere in the US. Moreover, an online arbitrage FBA seller on Amazon can do business from any country in the world. The program gives maximum freedom because you are not tied to a specific place and can develop your business and earn income even while traveling or on vacation. All your items will be in Amazon’s warehouse, ready to ship at a moment’s notice.
10. No need to create your site
By choosing FBA with Amazon, you don’t have to think about creating your own website. You will already have a platform for selling goods. Sellers will not need to deal with such complex tasks as site optimization, hosting, security issues, and page promotion.This significantly saves not only time and effort but also money. Amazon is already a popular marketplace that doesn’t need promotion.
11. Lost or damaged products are Amazon FBA’s concern
One of the least enjoyable sales parts is dealing with stolen, lost, or damaged orders. In this case, the seller receives financial losses and loses buyers’ loyalty.FBA members can count on Amazon staff to handle all issues related to lost or damaged items: customer communication, refunds, and replacement of damaged or lost items. This will reduce the number of negative reviews and increase customer trust.
12. Reducing business costs
Let’s start with the fact that you don’t need substantial startup costs to start selling on Amazon. You can even send for sale those goods that you already have: old books, souvenirs, appliances, etc. In this case, no starting amount is required for work.The trading conditions on the site for beginners are the same as for experienced sellers. That is, even if you are a small company, you can count on the level of the game’s rules. Start small to gradually grow, improve and earn more.As you can see, with Amazon FBA sellers can count on many advantages that are not available when conducting trade on other marketplaces. This is a simplification of business and a financial benefit that allows you to adjust and automate all processes.