As of 2017, the estimated number of sellers in Amazon was at around five million. However, only a particular portion of that estimate can be said to be successful, and most of the top-performing sellers use the online retail giant’s FBA – or Fulfillment by Amazon – service.
If you own a small business or just started one, opening a seller account in Amazon in order to use its FBA service is a good consideration. To help you out in your decision, we have rounded up the pros and cons of using Amazon FBA for your small business.
Pros of Using Amazon FBA for Your Small Business
- You can bring your products to any of Amazon’s FBA warehouses for storage.
When you started your small business, you probably stored all of your products in your garage or in an extra room in your house. However, once your business picks up and you gain more customers, you have to increase your product supply. There may come a time when your storage room can’t accommodate all of your products anymore.
Getting additional storage space may not be viable for you as you have to cover rental and maintenance costs, which can go up depending on the location and capacity of the storage unit.
On the other hand, if you’ve successfully registered as an Amazon seller, you can start using their FBA service wherein the products of your small business will be delivered and stored in Amazon’s FBA warehouses, which are massive. Hence, storage will not be a problem for you anymore.
- Amazon will fulfill all of your customer orders for you.
In the first few months of your small business, you may have taken pains to deliver every single product that your customers ordered from you to their doorstep. You might even have gotten to know them a bit better along the way. However, there’s no telling if you suddenly won’t be able to do door-to-door delivery of your products in person.
You wouldn’t have to spend hours on the road delivering your products to your customers anymore if you use Amazon’s FBA service. The online retailer’s delivery people will transport your products from any of the FBA warehouses to your customers so that you can finally take care of other aspects of your small business that have nothing to do at all with logistics.
Cons of Using Amazon FBA for Your Small Business
- You’ll have to buy UPCs from their only legitimate source and add them to the packaging label of your products.
Before you can send your products over to an Amazon FBA warehouse, make sure to package each of them first. As for their labeling, each of your products should have a unique 12-digit number known as the Universal Product Code (UPC), which are the numbers found below the barcode.
Some Amazon FBA sellers with years of experience under their belt may tell you that you can buy UPCs from third-party resellers. Don’t listen to them as such UPCs may have already been assigned to other businesses by a nonprofit organization called Global Standards One (GS1). Buy your UPCs directly from the said organization instead.
As its name suggests, GS1 has set a few global standards for proper identification of products, one of which is the UPC. GS1 has more than a hundred member organizations worldwide, so finding a branch near you to buy your UPCs should be a piece of cake.
- Your products might get mixed up with those belonging to other Amazon sellers.
The typical Amazon FBA warehouse stores thousands upon thousands of products from all of its sellers. It’s not impossible that you and another seller may have the same products, and taking into account human error, the wrong product might be sent to your customers.
Keeping a frequently replenished stock of all the products that you’re selling as part of your small business and going door-to-door to deliver them to your customers may already be too much of a chore for you. Handing over your business’s inventory and logistics concerns to the hands of online retail giant Amazon can be good for your business. Don’t forget to read legit journalreview.org reviews of other small businesses who are using the said platform, and make sure you have weighed the pros and cons of using Amazon FBA service listed above before you sign up.