Why Amazon FBA is also a good idea for Private Label Sellers

Anyone who sells their own Private Label on Amazon can utilize FBA just as effectively as sellers of branded goods. While the increased chance of winning the Buy Box is not the draw in this case, FBA stands for the perfect customer experience, and satisfied customers come back. Additionally, a lot of work is taken off your hands – keyword logistics.

Here you will learn how Amazon FBA can support your Private Label business . Let’s first take another look at what FBA is and how it works.

What is Fulfillment By Amazon (FBA)?

In recent decades, the online giant has been able to perfect its fulfillment processes. Its experience and, not least, the technical equipment enable shipping processing in no time. But customer contact and returns management are also covered with FBA.

To use Amazon FBA , sellers send their goods to one of the logistics centers of the e-commerce giant. From here, Amazon takes over and initially stores the goods. When a customer orders the corresponding product, it is picked, packed, and shipped. Much of this process is automated, and you can see robots at work in many logistics centers.

But the FBA service does not end with shipping. If delivery issues arise or customers are dissatisfied with the received products, the shipping giant also takes over these processes. The returns management and customer service meet the high standards regarding customer satisfaction.

At Amazon, customers are always the focus. All decisions and processes are to be made in their interest. Thus, the Amazon FBA program can also help Private Label sellers. Because the overall perfect customer experience leaves a good, satisfied feeling with buyers, leading them to purchase from these sellers again.

What is Private Label?

Sellers who do not want to sell branded goods, for example, because they want to avoid the competition for the Buy Box, can establish their own brand and build a so-called Private Label. For this business model, sellers can purchase products and have them printed with their own label.

This allows Private Label sellers to build their own brand presence and also design their own product detail page. The competition for the Buy Box is eliminated, as they are simply the only sellers of the product. However, there is competition in the search results. For example, if customers search for a phone case, they receive a staggering “more than 50,000 results.”

Additionally, higher profits are possible when selling your own brand compared to selling branded goods. You can find more advantages and disadvantages of Private Labels in our blog post: Private Label on Amazon – the business idea in 2020 or a thing of the past?

How can Private Label sellers benefit from FBA?

The advantages of FBA mainly lie in the fact that a lot of work is taken off sellers’ hands. After all, not only a large part of the logistics is eliminated, but also the work in customer service.

For Private Labeling, Amazon FBA means that sellers have more time to invest in the development of their own brand. After all, the importance of branding and marketing plays a significant role here. Having your own brand is nice, but if no one knows it (or can get to know it), this path is not profitable.

In addition to the relief from work, costs for one’s own warehouse and potential employees are also eliminated. Because beyond a certain size, the garage simply is no longer sufficient. Here, good inventory management is essential, as it is all too easy to lose track of which item is stored where and what the respective stock levels are.

The Amazon FBA business of a Private Label seller also guarantees the fastest shipping. Same or next-day delivery is expected by many customers on Amazon – and many sellers offer it as well. When faced with a choice between two similar products that are equally appealing, but one is delivered tomorrow and the other next week, which one is likely to be purchased?

Amazon FBA also helps with Private Labeling through extremely high standards in customer service. As already mentioned, customers are always the top priority at Amazon. All processes are designed in their interest. This is especially true for customer service. The online giant has a large, trained team that is always friendly, solution-oriented, and easily accessible.

This naturally leads to high customer satisfaction and a high likelihood that these customers will purchase again from Amazon and thus from you. In fact, good returns management can even lead to increased customer loyalty, as it builds trust in the company.

How Private Label sellers perfectly utilize FBA

Nothing is free – not even the Amazon FBA service. (Private Label) sellers should carefully consider the costs.

The fees for this service are based on the size and weight of the product. The larger and heavier the goods, the higher the FBA fees. Therefore, the program is not equally suitable for every type of goods. Products that are particularly sensitive and fragile are also less suitable for Amazon FBA. (Private Label) sellers should consider whether the requirements of their product align well with the service.

Even Amazon is not perfect, and errors can occur within FBA. Goods can disappear in the warehouse or be damaged. It can also happen that Amazon refunds customers for the goods, but the return never arrives at your location. The good news is that you can get reimbursed for these errors. You receive FBA reports that need to be sifted through for errors. Alternatively, you can use a reimbursement tool for Amazon FBA. This significantly reduces the workload for (Private Label) sellers. Lost & Found analyzes your reports automatically in the background for up to 18 months retroactively and shows reimbursement claims. Additionally, it prepares a letter to Amazon, so users only need to copy and paste it into Seller Central and send it.

Does Amazon FBA also have disadvantages for Private Label sellers?

An important part of Private Labeling is creating customer loyalty. However, using Amazon FBA does not allow Private Label sellers to contact customers. Any communication is the responsibility of the online giant, and including flyers, discount coupons, or similar items is not possible.

However, Amazon offers brand owners some exciting marketing opportunities: from targeted sponsored ads to their own Brand Store. The prerequisite for this is that the brand is registered in Amazon’s Brand Registry. This allows you to indirectly connect with your customers. Design your own Brand Store according to your wishes, tell your story, and showcase your unique selling points. You can also offer special promotions and coupons there.

You can also reach your customers and draw attention to the added value of your brand or products with the help of Sponsored Ads or Brands.

But perhaps the most important point is that through Amazon FBA, you can offer perfect customer service. As already described, the program helps you by delivering goods to your customers in no time, and that everything runs smoothly with returns thanks to trained Amazon staff.

Conclusion

The Amazon FBA program can also support Private Label sellers, as it takes on a significant amount of work. Through perfected processes in the logistics centers of the online giant and top-notch customer service, the customer journey is made perfect, and customers are happy to buy again. This positive experience transfers to the Private Label, and shoppers associate a positive feeling with the brand. This, in turn, encourages positive reviews, recommendations, and repeat purchases.

Certainly, you can also handle your fulfillment yourself and be successful, but you should ensure that you can meet the standards set by Amazon. This means that goods should arrive at customers within one to two days (depending on the category, possibly a bit longer) and that customer support operates flawlessly.

But not every product is equally suitable for Amazon FBA. Private Label sellers should weigh the costs of this service against the benefits. If goods are particularly heavy or bulky, or if you place a high value on including flyers with shipments, it may be better to handle logistics and customer service yourself.

Image credits in the order of the images: © VectorMine – stock.adobe.com / ©iiierlok_xolms – stock.adobe.com / © Trueffelpix – stock.adobe.com

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