{"id":18123,"date":"2022-01-25T14:44:00","date_gmt":"2022-01-25T14:44:00","guid":{"rendered":"https:\/\/www.sellerlogic.com\/?p=18123"},"modified":"2022-03-21T16:39:08","modified_gmt":"2022-03-21T16:39:08","slug":"is-amazon-fba-worth-it","status":"publish","type":"post","link":"https:\/\/www.sellerlogic.com\/en\/blog\/is-amazon-fba-worth-it\/","title":{"rendered":"Is Amazon FBA Actually Worth It?"},"content":{"rendered":"\n

If you’re an Amazon seller or thinking about selling on Amazon, you’ve probably wondered if Amazon FBA is worth it. Of course, weighing up all advantages and disadvantages is critical. We’ve put together a concise rundown of what FBA is, how it works, and all the details you’ll need to decide whether or not you should sell on Amazon FBA.<\/p>\n\n\n\n

What Is Amazon FBA, and How Does It Work?<\/h2>\n\n\n\n

Fulfillment by Amazon is a service provided by Amazon that allows third-party businesses to automate their order fulfillment and delivery processes. Amazon does a lot of work for sellers: manages everything from shipment to returns and refunds to product warehousing in its warehouses. Of course, you pay for this. But what exactly do you get? It\u2019s not only access to one of the most active fulfillment networks in the world, but also customer service round the clock! Isn\u2019t it something that makes life easier for sellers? Definitely, it is. But in this article we will be transparent with you, so we will cover not only advantages but disadvantages as well! <\/p>\n\n\n\n

Now you might wonder what the cost of FBA is? Okay, let\u2019s take a look. <\/p>\n\n\n\n\n\n

Is Amazon FBA worth it? \u2013 The Costs of FBA <\/h2>\n\n\n\n

With the Amazon FBA, you pay storage and fulfillment costs. The more inventory you have, the higher your costs will be. You will also have to pay extra fees if you retain an item for more than 180 days. <\/p>\n\n\n\n

Furthermore, Amazon keeps track of stranded inventory, which is goods that are stored in an Amazon warehouse but aren’t for sale. You lose money on stranded goods, but Amazon makes it easier by offering a stranded inventory report.<\/p>\n\n\n\n

Settlement fee reports may be found in your FBA dashboard’s reporting area, and they will show you what type of fees you’re paying to Amazon as part of this program. <\/p>\n\n\n\n

How much does Amazon FBA charge<\/a>? <\/strong>For starters, Amazon deducts 15% off nearly every goods sold on their marketplace. Amazon will deduct additional cost for delivery and processing of your customers’ orders if you use FBA. Most of the time, the pricing is less expensive than if you processed and sent the orders yourself. You will be charged an additional $1 for each product if you use an individual seller account. <\/p>\n\n\n\n

Professional seller accounts pay a $40 monthly subscription charge, therefore this extra $1 per product is only available to individual accounts.<\/p>\n\n\n\n

Read more about Amazon FBA and seller fees here. <\/a><\/p>\n\n\n\n

Okay, it’s time to consider the most important aspect:  Is selling on Amazon FBA worth it? Let\u2019s take pros and cons into consideration.<\/p>\n\n\n\n

The Pros and Cons of FBA<\/h2>\n\n\n\n
\"is<\/figure><\/div>\n\n\n\n

1. Pros of FBA.<\/h3>\n\n\n\n

These things stand out when it comes to the question “Is selling on Amazon FBA<\/a> worth it?”:<\/p>\n\n\n\t\t

\n\t\tYou Save a Lot of Time<\/strong>\t<\/h4>\n\n\n\n\n

By enrolling in the FBA program, you can concentrate on growing your business. You can rest easy knowing that Amazon employees are responding to your customers’ needs and concerns 24 hours a day, seven days a week. You also save time by not having to deal with client returns or traveling to and from courier offices to transport your goods. That means you have a lot more time to develop your business on other aspects, e. g. product research.<\/p>\n\n\n\t\t

\n\t\tShipment and Logistics<\/strong>\t<\/h4>\n\n\n\n\n

You don’t have to do anything since Amazon does it all for you. All that’s left to do is maintain track of your listings, make sure they’re stocked with stuff, and leave the fulfillment to Amazon. For a reasonable expense, you can remove a significant burden off your shoulders. Moreover, you save your money on personnel and you don\u2019t need to have your own infrastructure. Sounds good, doesn\u2019t it? <\/p>\n\n\n\t\t

\n\t\tFast Delivery<\/strong>\t<\/h4>\n\n\n\n\n

FBA products receive the Prime badge immediately and are eligible for Prime free delivery (to the customer) and faster shipment timeframes. Furthermore, because it’s included in the service, you won’t have to pay or charge premium shipping costs to do so. Since fast delivery and Prime benefits are a major reason for customers to buy on the marketplace, this is a huge advantage for sellers and should always be kept in mind when one tries to decide “Is Amazon FBA worth it?”.<\/p>\n\n\n\t\t

\n\t\tManaging Returns<\/strong>\t<\/h4>\n\n\n\n\n

Because returns and refunds are considered part of the fulfillment process, FBA takes care of them in addition to sales. This relieves you of yet another burden.<\/p>\n\n\n\t\t

\n\t\tYou Have a Better Chance of Receiving the Buy Box<\/strong>\t<\/h4>\n\n\n\n\n

The Buy Box is positioned in the lower right corner of a product page, next to the ‘Buy now’ button. Registering for FBA does not ensure that you will receive a Buy Box, but it does provide you a greater probability than those who do not.<\/p>\n\n\n\n

2. Cons of FBA.<\/h3>\n\n\n\n

So, is Amazon FBA worth it in the end? For this, it’s critical to consider the reasons why FBA might not be the best fit for your requirements, too. Here are a few things to think about:<\/p>\n\n\n\t\t

\n\t\tYou Have to Pay Fees\t<\/h4>\n\n\n\n\n

While paying fees isn’t necessarily a negative if you don’t earn a lot of sales, it may be. In addition to the 15% referral fee for using their platform, FBA will charge shipping, storage, and handling costs. Fortunately, Amazon provides an easy FBA calculator<\/a> that can help you. <\/p>\n\n\n\t\t

\n\t\tLong-Term Storage Fees\t<\/h4>\n\n\n\n\n

You’ll need to account for them in your budget to ensure that FBA remains a viable option for your business. Inventory that has been in a fulfillment center for more than 365 days is charged a monthly long-term storage fee in addition to the monthly inventory storage fee. The fee is stored per unit and rated based on unit volume or per unit, whichever is greater. The amount is $6.90 per cubic foot or $0.15 per unit, whichever is greater. So it can be quite expensive and might affect the question “Is Amazon FBA worth it?” highly. We recommend returning goods before the expiration of 365 days.<\/p>\n\n\n\n

Update for all the European sellers: Starting May 15, 2022, Amazon Europe will charge the sellers a fee for items from several categories which have been stored in a fulfillment center for 331 to 365 days (e.g. 37 euros per cubic meter in Germany). The fee won\u2019t apply to items from the following categories:\u00a0<\/p>\n\n\n

\n