For many brick-and-mortar shops, the idea of online sales can seem very foreign, risky and impractical. After all, you already have customers and a steady stream of sales – so why mess with a good thing? Besides, you don’t have the resources to handle shipping or returns, let alone online marketing! Of course you’ve heard stories about how profitable e-commerce can be and the idea of selling your products all over the world is certainly appealing. But If you know people who have opened online stores using services like Shopify or their own e-commerce platform you know that they have to work just as hard as you to get people to visit their store and that they have the additional headaches of shipping products and dealing with returns. I want to tell you about a rather amazing program offered by Amazon called ‘Fulfilment by Amazon’ (FBA) that might make you reconsider online sales.
Over the past few years Amazon has risen from an online bookstore to the largest online marketplace in the world. This has allowed the company to offer some pretty outlandish services for its customers and its sellers. The most impressive of these services has to be Amazon FBA. Here’s how it works:
- An Amazon seller labels and ships their inventory directly to Amazon (any quantity or mix of products).
- Amazon then sorts and stores the Seller’s inventory for a small fee (this fee is determined by weight and size of inventory).
- The Seller’s items are listed on the Amazon Marketplace. If the Seller has standard products that are already listed, the process is automatic. If the products are unlisted the Seller can quickly create new listings for the products.
- When a Seller’s item is bought, Amazon picks, packs and ships the item. Amazon also handles all customer support and returns! An additional fee is charged to the Seller.
So what exactly does this mean for Sellers? First it means that you never have to ship your products to individual customers or handle returns or customer support. Second it means that you don’t have to store your own inventory. It’s literally as easy as packing up your stuff and sending it to Amazon and having them handle the rest. What’s the catch? The catch is the fulfilment fees which will cut in to some of your profit. On the other hand you will have exposure on the world’s largest marketplace and state of the art customer support, shipping and returns handling.
The FBA fees really depend on the type/quantity of products that you are trying to sell but Amazon provides a very useful FBA Calculator to help you out.
An additional benefit to using FBA is that your offers are more visible and competitive in the Amazon Marketplace. Many buyers buy exclusively from FBA sellers because they are often eligible for Free Super Saver Shipping and Amazon Prime.
If you are looking for a way to safely migrate some of your products for online sales, Amazon FBA is the way to go. Take a small portion of your current inventory and ship it to Amazon and see if online sales is right for your business. Don’t forget to keep track of your in-house inventory as well to make sure you are making a profit!
We want to hear all about your experience with Amazon FBA so let us know!