The advantages and disadvantages of FBA -Help for new sellers

The sellers are suggested to use Fulfilled by Amazon (FBA). FBA is the logistics service provided by Amazon, including warehousing, packaging, payment processing, delivery, customer service, and order return.

 

Let’s learn more about the advantages and disadvantages of FBA:

 

Advantages:

 

Compared to fulfillment by seller , FBA is favored by Amazon to receive the higher exposure and traffic, meaning more orders are possibly transacted.
Recently-announced two-day delivery is converted into one-day delivery (currently it only supports the Amazon.com);
Prime logo is more attractive to Amazon’s quality users – Amazon members;

Increase chance of winning buy box;
24*7 order delivery;
Intelligent warehouse management can shorten the delivery time;
Negative feedback from FBA distribution can be submitted for deletion;
Multi-channel delivery.

 

Of course, although FBA has many advantages, FBA has also many shortcomings. Let’s take a look at the disadvantages of FBA:

 

Warehousing, and slightly high delivery cost.
Customers can launch goods returns at will, which is not good for seller’s business and improvement of the products, and may cause a certain loss of inventory.
The requirement on the address for the goods return is relatively strict.
The requirement on quality and package of in-warehouse goods is relatively strict.

 

According to the features of Amazon platform, some products are not suitable for FBA:

 

Seasonal products: Sales volume is hard to be forecasted,,understock easily results in supply shortage, and overstock easily results in poor sale.

Large and heavy products:  FBA cost is frequently adjusted; therefore, the cost of delivering large and heavy products also continuously increases.

Short life cycle product:  FBA has no sense of first in first out. The short life cycle product easily exceeds the expiration limit arising from the overstock.

Cheap products:  Due to FBA cost, the products are not profitable. Suggested retail price is no less than USD 7.

Prohibited goods:  Such as tobacco, alcohol, controlled knives, drugs, etc.

 

Therefore, in order to make good use of this double-edged sword, the sellers shall consider and judge according to your own products.