As a Amazon FBA Seller, You Need to Know These Things
As an Amazon seller, FBA is definitely worth considering. Join Amazon FBA and you can use Amazon's warehouses around the world to store, package and deliver products. The services which FBA offers are attractive enough for entrepreneurs who want to expand their business and are more competitive locally or internationally, but before joining, you need to know these things:
1. Inventory management. First, you need to understand that Amazon will not handle everything for you. You need to pay close attention to your stock levels and replenish it when it is appropriate. If you need to manage a lot of products, investing in a inventory management system is very necessary. Otherwise, you may get confused by everything from new orders and deliveries, which may result in under-stocking or over-stocking.
2. potential profit margins. Next, you need to think about the profitability you can get on Amazon. On Amazon, your product will compete with other sellers from all over the world, which means you may be pricing lower than usual. If transportation and production costs of your products are high, Amazon may not be suitable for you. Therefore, before entering the Amazon, pre-calculated profit margin is very necessary.
3. Amazon costs. Take care not to ignore Amazon FBA fees when making a profit analysis. For FBA novice, you need to pay order processing fees in advance, sorting and packing of each product cost, storage costs (based on the area you occupy). In addition, depending on the product weight, size, storage time (more than six months or peak season storage), you also have to pay an additional fee.
4. Amazon classification approval. Publishing some special categories of products on Amazon requires prior approval from Amazon. If your product falls into these categories, this may slow down your product placement and affect your overall sales.
5. Shipping. In some cases, you will be fortunate enough to join Amazon Free Shipping. But most of the time, you need to pay for the shipping yourself. This may increase your monthly costs by hundreds of dollars (depending on your order volume and the type of logistics service you are using).
6. Production and procurement efficiency. If you want to build a sustainable business through FBA, you need to streamline your production methods or purchasing processes. For example, you are a distributor, then you need to work hard to find a lower price and stable products, to ensure your profit. If you produce your own products, you need to ensure that the product yield and quality, which may be a huge project.
7. Returned and damaged products. Finally, the last thing you need to consider is that some products may be damaged in transit, but also may be returned by the customer. How would you handle your customer's return request? What needs to be done to ensure customer satisfaction will not affect your store rating? Amazon may give you some advice, but it will not work for you. Does join the Amazon FBA is really good? FBA itself is neither good nor bad. FBA may be helpful to you if you do not want to manage your own warehouse, or if you need a shortcut to gain access to a wider range of customers. Conversely, some of the disadvantages and limitations of FBA may be detrimental to you.