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Amazon FBA in 2022: How It Works (Advantages and Disadvantages)

Ever since the pandemic hits, there’s been rapid growth in the E-commerce industry.

Many traditional businesses are transitioning to eCommerce and choosing which platform or marketplace to use is already a major roadblock for them.

Most of the options are to create their own website or join the most famous marketplace – Amazon. 

For now, we will only discuss a quick overview of selling through Amazon and not discuss other platforms or websites.

There are a lot of advantages to being a seller on Amazon but there are also disadvantages to why you have to think again if you want to do your business here.

Advantages of Selling Through Amazon

Customers are ready to buy 

When customers go to Amazon, it means they’re in the spending mood. They are aware of the product they want to buy, they are prepared to spend and they just want to choose from what store they will check out. Amazon is already a known marketplace where it’s the go-to of the customers, so you don’t need to think about where you can get your potential customers. 

Simple to Understand and Implement

You don’t need to learn about coding unlike in building your own website for your online store. Your store is easily visible and searchable to thousands of customers and you don’t need to educate them on how to select your product and checkout. Everything is laid out by Amazon so it’s very easy to use both for customers and for sellers. 

Fulfillment Are Handled

When you are handling products and you’re new to the business, one of the struggles you will encounter is handling the logistics. On Amazon, they have the option to fulfill your orders, they will be responsible for storing your products and allowing them to pick, pack, ship, and handle customer service for your products. 

Amazon’s Limitations/Disadvantages

While there are tons of reasons to be an Amazon seller and create your own account, you should be aware of the limitations you will encounter. 

Customers are for Amazon Only

Although having clients will not be a problem on Amazon, keep in mind that the customers are there for Amazon’s sake, not your store’s (ouch!). This is a disadvantage since, no matter how hard you try to gain a loyal consumer, Amazon is their go-to.

No Access to Reach Customers

It’s a disadvantage not to be able to reach your customers since, as a seller, you want to personalize their experience or offer a particular price or promotion only for them. However, Amazon protects its customers’ personal information and it’s not available for sellers.

No Control to your Logistics

While having Amazon manage fulfillment is one of the benefits, it may also be a downside, particularly if you lose control of your inventory. Amazon will move products between warehouses at times, rendering them unsellable until they are settled. There are also fees for Amazon FBA.

SHOULD YOU SELL ON AMAZON?

There are advantages and limitations to selling on Amazon and the biggest challenges are how to start and where to. Taking risks in doing Ecommerce is really inevitable but with enough knowledge and guidance, there’s a chance that you can have controllable risks and be a successful seller and profitable. 

Generation eCom may assist you in minimizing risks by helping you through the process of selling on Amazon or other marketplaces. You can schedule a consultation call before making any decisions to help you.