The number of Amazon sellers has risen dramatically in the previous several years. As a result, the competition has become much more fierce.
Finding your own best-selling product is one of the first steps if you’re new to Amazon FBA labels. However, you will quickly discover that finding a winning product to sell on Amazon is a difficult undertaking. Why? Because most of Alibaba & Co.’s products are currently available on Amazon.
Amazon’s revenue in 2020 will be $386 billion, up from $280 billion in 2019, and third-party sellers will account for nearly half (54%) of that! 92% of those third-party merchants use Fulfillment by Amazon (FBA) to run their Amazon business.
While the competition on Amazon and other eCommerce platforms has grown, so has consumer desire for online buying 62% of consumers begin their product searches on Amazon. This article will discuss why selling on Amazon FBA in 2022 is still worthwhile.
The advantages and disadvantages of selling on Amazon (FBA)
FBA is a fantastic business concept that allows anyone, regardless of eCommerce experience, to start an online store and sell things to millions of people. But, like with anything, there are certain drawbacks. Let’s look at some of the benefits and drawbacks of selling on Amazon.
PROS
- Access to Amazon’s devoted client base:
Amazon.com receives approximately 3 billion monthly visitors and has over 300 million Prime members worldwide. You can offer things on a website that receives millions of daily views as a modest, one-person business.
- Amazon handles your logistics if you use FBA:
If you use Amazon’s FBA program, you’ll send your goods to Amazon’s FBA coaching centers, where they’ll store them, process orders, and even provide customer assistance.
- Shipment services:
When shipping to Amazon FBA, you must meet certain packaging and fulfillment prep standards. Properly packaging and preparing units (FBA prep) reduce delivery delays, protect your products at fulfillment centers, and improve the customer experience.
- Time-Saving:
Time is money in every successful business. That’s why high-scale sellers or sellers with a high sale rate try their best to maximize the efficiency of their selling strategy. Amazon FBA helps them to save time and boost their sales. Especially the successful third-party sellers on Amazon. With the help of Amazon FBA, they don’t need to first order their inventory to their warehouse and label them and later send it to Amazon or fulfill the customers’ orders themselves. Instead, they can directly ship their inventory in bulk to Amazon warehouse from their supplier or manufacturer and use Amazon FBA labels services for putting fnsku labels on the inventory in exchange for some additional cost to Amazon FBA fees.
CONS
- Storage fees:
If you use FBA, you’ll have to pay storage costs because your things will be stored in an Amazon fulfillment facility. Monthly and long-term storage fees are the two types of storage fees. Learning to properly manage your inventory will save you money on storage fees.
- Amazon FBA fees:
Amazon must charge you a fee to hold, select, pack, and ship your orders. The cost of FBA is determined by the size and weight of your merchandise. It’s usually 30-40% of your product price between FBA and referral fees.
- Vendors inconvenience:
Customers can easily return items because of Amazon’s generous return policy. As a result, some vendors may have high return rates on their products. Customers will appreciate it, but vendors will find it inconvenient.
The E-commerce sector is dominated by Amazon:
In the middle of the 1990s, Amazon began as a modest bookshop. It is fast forward to 2022, and its world-famous platform now offers virtually every product imaginable. Not only do digitally savvy millennials enjoy the brand, but so do senior citizens. Let’s look at the numbers to put everything in perspective.
- On Prime Day, Amazon generates an average of $17 million in sales.
- In 2019, there were 2 lakh merchants worldwide who made over $225,000 in sales.
- According to a poll, 90% of shoppers prefer Amazon products to those from other e-commerce sites.
- In July alone in 2020, Amazon dispatched 415 million packages. And it’s only going to get worse as we approach 2022.
The Final Verdict:
Yes, Amazon is a highly competitive marketplace. It takes time and money to get started, and it isn’t a set-it-and-forget-it type of business, contrary to common opinion. Learning, perseverance, and hard work are required to run an Amazon FBA business. Is it, however, worthwhile? In the end, the decision is yours, but we say yes.
Selling on Amazon, in our opinion, has considerably more benefits than drawbacks. Will every Amazon seller that debuts a product be a success? Probably not, but if you put in the effort, keep improving, learn from your failures, and use the right Amazon FBA Coaching, you can succeed on Amazon. We hope this article has successfully delivered the pros and cons of using Amazon FBA to you, and it will help you to make the right decision for your business.
