Amazon needs no introduction. It is the world's largest market place and sells thousands of products every day to its customers scattered around the globe.
Its stock value has surpassed the trillion-dollar mark, and Jeff Bezos, the founder, is one of the richest men in the world.
But did you know that you too can sell on Amazon?
Yes exactly.
Amazon allows third-party sellers to leverage its proprietary platform. You can offer your products for sale by leveraging two programs:
- Amazon FBM: acronym that stands for Fulfillment by Merchant
- Amazon FBA: acronym that stands for Fulfillment by Amazon
In the first case, the seller places the product in Amazon's catalog, but handles shipping, tracking, and returns themselves.
In Amazon FBA instead, Amazon will directly perform all the logistics of packaging, shipping, return pickup, and tracking.
You will only have to worry about the product.
You will well understand that this is an immense opportunity, as it greatly simplifies all the seller's work.
Here is how Amazon describes it on its site:
Amazon's logistics allows you to reach more customers by offering benefits such as Prime fast delivery and simplified sales throughout Europe. More customers means more sales. All you have to do is send us your products and we will take care of storage, delivery to customers, customer service and returns handling.
from the Amazon
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How does Amazon FBA work?
Using Amazon's logistics, you can sell your products on the world's largest market place.
You can ship a stock of your product to Amazon's warehouses and thus take advantage of all the benefits of being on a global ecommerce.
This means that when a user purchases your product, Amazon will take care of the packaging and shipping of your product.
The efficiency of Amazon's logistics has been recognized for years now, so you will drastically reduce all issues related to sending packages.
You will be able to take advantage of the Amazon Prime service, so customers will receive products within one day.
The tracking code and all customer service will be handled directly by Amazon.
Those sound like pretty good advantages!
If you have managed an ecommerce you know very well how difficult it can be to offer an efficient service and what expenses are involved in running a platform to manage products, variants, prices, discounts, coupons etc...
To get an overall idea you could read the Amazon FBA introductory guide.
Perhaps a video can serve more than a thousand words.
What are the costs of Amazon FBA?
All these benefits obviously have costs. Let's see what they are.
Amazon provides two types of accounts, individual and professional. In our case we will consider only the professional account.
I Amazon FBA costs Are:
- monthly subscription
- storage tariff
- management fee
The monthly subscription for a professional account is €39.99 per month and includes:
- no limit of loaded products
- possibility of collective uploads
- Ability to connect to ecommerce platform and order management
- inventory management
- FBA stock management
- gift packages can be offered
As for monthly storage, this is measured in cubic meters and varies according to the time of year:
- 26 € per cubic meter per month, January to September
- 36 € per month per cubic meter, from October to December
As for the handling fee, this can vary depending on the weight and size of the product. Here is a simple example.
You can find more information on the official website.
Advantages and disadvantages
After what it is good to point out what are the pros and cons of selling on Amazon.
Benefits
- simplicity of use
- millions of customers already registered
- lots of traffic
- no duties of shipment management, warehouse management
- no ecommerce implementation cost
- scalability
- minimum investment
- sale throughout europe
Disadvantages
- customers are not "yours"
- you have no control over the platform, so you will have to abide by Amazon's rules on product quality
- account suspension problems and the like
- Amazon's costs impact your margin
20% discount for 6 months
Enter the coupon FBAMASTER20 to immediately receive 20% discount on the first 6 months of Helium 10 subscription. Code valid for all subscription plans.
10% forever discount
Enter the coupon FBAMASTER10 to receive the 10% discount forever On all Helium10 subscription plans.
