Amazon FBA Pros and Cons: Is it for you?

     In my last post I kind of did a real quick rundown of what I've done over the past year, and what just didn't work for me. I also hinted that I had found a new avenue of sales that I was excited to try and that I would be posting about it soon. This post I'm going to explain this avenue called Amazon FBA (Fulfillment by Amazon) and explain my decision to return to Ebay once again. I'm also going to include some links to some wonderful blogs and podcasts and youtube channels that I have found while researching FBA.

     So, a quick rundown of what Amazon FBA is. As you may, or may not, know Amazon allows other vendors to sell through them. Up until a few years ago to sell on Amazon you had to ship your own products, they were not included in the free shipping or Amazon Prime membership perks, and you dealt with your own customer service. If you start checking out selling on Amazon you will see people referring to Merchant Fulfilled, or MF, in their comments. That simply means that you, as the merchant, are fulfilling the order. FBA is beautifully different though because Amazon fulfills the order!

     Okay, you might be thinking, how the heck does that work!? Here's a quick, very basic rundown of the process: you find items that will sell on Amazon (say on clearance at a store, a thrift store, garage sale, etc.), you buy them, go home and log into your seller account on Amazon, you enter the SKU for that item and create your listing of that item, you choose FBA when making it and amazon automatically generates your items into a shipment to one of their warehouses, you mail it to them, they process it and make your listing live. It sell (hopefully) and THEY ship it to the customer, THEY deal with any returns or customer service issues, and YOU collect the money through your seller account.

Obviously there is a lot more to it,  but the above paragraph is the program in a nutshell.  There are pros and cons associated with this program, so let's do a quick list:

PROS

• Items listed through Amazon FBA are eligible for the free super savers shipping (orders over $25)
• They are also eligible for free two day shipping for Prime members, and the $3.99 one day shipping, also for Prime members.
• You do not have to deal with creating the shipment and running to the post office all the time, or deal with returns and customer issues.
• You also don't need to keep a bunch of inventory in your home/shed/storage unit/ etc. Other than what you need to ship to Amazon, the rest sits in a nice climate controlled Amazon warehouse.
• You also don't need to keep a ton of shipping supplies on hand, other than what you would need to ship to Amazon.
• You can take advantage of Amazons discounted rates through UPS to ship items to them.

CONS

• There are much higher fees associated with FBA, from what I can gather around 25-30%.
• Customer returns are extremely easy because they can use the Amazon A to Z guarantee. (side note: if the item is resell able they restock and resell, if not amazon offers you a refund for the sell price and destroy the item for you)
• There can be stiff competition and as such you can run into sellers that are offering lower prices than you can afford to offer.
• You will normally have to have higher prices than you would find in a store because your profit margin is slimmer. Keep in mind though that people are often willing to pay that higher price because of the shipping perks and amazon customer service excellence.

     As I mentioned in my last post shipping items was the biggest hurdle for me and online selling, so you can see why FBA seems to be a dream come true lol. I have not made my first shipment yet, I'm waiting on some supplies so that I can bundle some items. Obviously, I'm far from a pro of any kind with this program and I'm willing to admit that. Still, I am pretty good at finding good reliable resources online about stuff ;) So, lastly I'm going to list some great sites, videos and podcasts that I've found for you. Also remember that many of these blogs have Facebook groups as well, I highly suggest joining at least a couple, especially the "Thrifting for Profit" group.

Resources

1. A podcast on Smart Passive Income (wonderful blog, seriously recommend looking at his stuff!) with Jessica Larrew a current and successful seller on FBA. Click HERE
2. Thrifting for Profit and HowAzon blogs (also suggest joining their FB group)
3. Jessica Larrew's Youtube channel - click here
4. Thrifting for Profit Youtube channel - click   here

Hope these quick references, and this post help you decide if this is something that is a good fit for you. Take a few minutes, listen to the podcast on smartpassiveincome.com even if you do none of the others, and you'll learn a lot about this program.