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Expert Answers to Biz Questions
Listen in! Pick up some expert advice to a reader's question that we selected from CyberSchmooz.
How Fulfillment by Amazon Can Help your Small Business
When you are in charge of a small business it can feel like you need to do everything yourself. From daily tasks to management decisions, it's difficult to juggle so many roles all at the same time. Many small business moving to online stores these days, so there's more logistics than ever to figure out.
Luckily, there are all kinds of services to help you with management, so that you can focus on actually running your company. Services like Fulfillment by Amazon help streamline small businesses.
FBA is a great way to grow your company. There are even resources available online, like https://projectfba.com/helium-10-vs-jungle-scout/, that break down how to get the most out of using FBA.
If you're looking to increase sales and get your product out to more people, this is a good service to look into. Here's everything you need to know about FBA to decide if it's right for you.
What is FBA?
Fulfillment by Amazon, also known as FBA, is a way for sellers to send their products directly to an Amazon warehouse. Amazon workers then take care of the sales of your product. This includes fulfilling orders, shipping, customer service and returns.
Traditionally, company's post a product on Amazon but are responsible for fulfilling the order and shipping the product. With FBA, all of these extra steps are outsourced.
How Much does FBA Cost?
Of course, these extra services do not come free of charge. You can either sign up for a per unit account or a monthly professional account:
- For per unit sales, Amazon take 15-18% of the product price as a fee to handle FBA processing.
- Monthly professional accounts start at around $40 per month.
Is FBA Worth it?
The answer depends on the size of your company and the kind of products you sell. For some companies, a 15-18% fee off of every sale could bring too much financial strain. For small businesses with a high volume of steady sales, a monthly professional account could be the right choice.
You should also consider the money your business will save by outsourcing the services that FBA takes care of. The fees can sound like a lot at first, but it can be a lot less than having to staff your own customer service and order fulfillment workers.
Personal Touch vs Brand Recognition
One of the biggest things to consider for small businesses thinking about FBA is what it means for their brand. Being attached to the Amazon name through FBA has both pros and cons. On the one hand, your products will be directly affiliated with Amazon. As one of the biggest companies in the world, your products will be easy to find online. Once purchased, they can also arrive at a buyer's doorstep within 2 days if they have a Prime membership.
On the other hand, being attached to a big company name means your unique brand can get lost in search pages. If you took care of orders on your own, you might write personal messages to each buyer with a thank-you note. Or you might use unique packaging with your company logo. These personal details will be lost through the FBA system since your product will be one of many shipped out in standard boxes from an Amazon warehouse.
Bottom Line
As you can see, using FBA can help lower your company overhead costs and expand the reach of your product. At the same time, you are giving up some control of the products you sell. So, how hands on you want to be with every part of your small business is an important thing to think about when considering using FBA.
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