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| Knowing the Pros of Using Amazon’s FBA program |
While we’ve touched briefly on the benefits that using Amazon’s FBA program could bring to your business, there are a few key pros worth noting if you’re still unsure about signing up and getting started selling!
Too many sellers and small-business owners, Amazon FBA is a system that allows them greater capacity to expand their business, with a number of side benefits including:
1) Higher Prices, Higher Margins, and Higher Payouts
This is a really key factor and one we mentioned in a previous chapter. All items sold through FBA are eligible for Free Super Saver Shipping as well as Amazon Prime. This is really great for the seller because FBA users can actually raise their prices to match their competitors’ total price (which is cost and shipping). This little boost not only adds some extra profit, but it also counteracts the FBA fees, allowing the FBA seller to ultimately still receive a higher net payout than sellers on other platforms. So for example, if your competitor is selling an item at $30, plus $10 shipping, you’re free to list your item at $40, as the free shipping option counteracts the increase.
2) Less Work
Imagine making money while you’re not even working! Once the items are in the Amazon warehouse, FBA sellers have the potential to be selling 24 hours a day, 7 days a week. Items will ship at all hours of the day or evening, and this includes weekends. So regardless of whether you’re having a nap, or taking an extended vacation, your items are making you money. Once you’ve taken that step and sent the items into Amazon, your work is done, and you don’t need to do anything else. You’re welcome to monitor inventory or adjust prices as required, but you don’t have to sit down to the tedious task of packing items, stocking boxes, printing shipping labels, and hoisting packages down to the nearest post office.
3) More Selling Opportunities
As we discussed in a previous chapter, Amazon customers tend to purchase more items than other shoppers, both in quantity and frequency. By signing on for this program, you as a seller can effectively piggyback on the impulse buying habits of this established customer base.
4) Happier Customers
There is a large percentage of Amazon shoppers who have never purchased an item from a third party merchant. To them, buying from you as an FBA seller and buying from Amazon itself are synonymous. These individuals are people who have a relationship of trust with Amazon and like the security of knowing that if there ever is an issue that Amazon will assist them. In fact, Amazon buyers are willing to pay more money to get their items shipped by Amazon or an FBA seller.
They do this because they get the Amazon service, fast, efficient, and trusted. This not only benefits you by offering more sales, but it also takes the burden of general customer service off our business, freeing up greater resources for you.
They do this because they get the Amazon service, fast, efficient, and trusted. This not only benefits you by offering more sales, but it also takes the burden of general customer service off our business, freeing up greater resources for you.
5) Shipping Benefits
Keep in mind too that FBA products are shipped from Amazon at a far faster rate than products from other retailers. Pair this with 24/7 customer service and the ability for buyers to track delivery throughout the process, and you’ve got a real bonus. In most cases also, there is an increased customer awareness of the no-shipping cost and express shipping, and they will often opt for FBA as a result of that benefit.
6) Amazon Branding
While you are an individual seller, FBA retains the Amazon name, and as a result, the positive reputation that accompanies that name. Amazon has worked very hard to create a company that values its customers, providing the ease of ordering and impeccable customer service. Why not let that good reputation reflect positively on your business?
7) More Sales and Growth
Because of the minimal effort required for the seller, and the fulfilment on the part of Amazon, businesses using FBA are capable of handling a larger scale of inventory and fulfilment, allowing them more time to focus on the growth of the business.
8) Cost Effective and Simple
Compared to the significant service that Amazon FBA provides, the cost is very reasonable. If a business were to pay for storage space and shipping for all items, the cost would be far greater than anything that Amazon charges. Add this to free outbound shipping, and include customer service, and it’s apparent what a great deal it really is.
If the Amazon FBA program is one that you’re seriously considering, know that the pros really can outweigh the cons for many businesses. Ultimately, the customer pays for (and receives) the professional and timely service that he or she desires for little to no extra cost. Also, the freedom that this outsourcing and customer service provides allows the seller to devote more time to building their business through sourcing inventory, expanding product lines, evaluating margins, and putting timely and coveted items up for sale during key retail periods.
They can do all this because of the hassle of fulfilment and tracking is no longer in their hands, freeing them up for greater development.
Good luck!
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