Many business owners assume that selling on Amazon is always profitable. But the assumption of making millions overnight on Amazon is an unrealistic expectation. It’s true that selling on Amazon gives access to a customer base of crores. In fact, Amazon has more than 2.45 billion visits monthly with over 300 million active customer accounts.
A few years ago, the revenue potential was infinite when there was less competition on Amazon. But now, as the platform has become more saturated with sky-high fulfilment standards, being profitable has become a challenge for most Amazon sellers.
Moreover, when it comes to fulfilling Amazon orders, FBA (Fulfillment By Amazon) seems to be the go-to option for the sellers. The reason is that FBA takes the burden off their shoulders to provide lightning-fast shipping to their customers without entering the ecommerce logistics. That’s exactly where things get tricky! While providing nationwide fulfilment, FBA comes with high fulfilment costs that dramatically cut down Amazon sellers' profit margins.
In this blog, you will learn what is Amazon FBA, what are your options for Amazon fulfilment, the fulfilment dilemma faced by Amazon sellers and is FBA a profitable choice for Amazon sellers.
Fulfillment by Amazon (FBA) is a fulfilment service offered by Amazon to its sellers. In FBA, the seller sends inventory to Amazon Fulfilment Centres and Amazon fulfils orders on behalf of the seller.
In this, Amazon stores your products in their ecommerce warehouses, and when an order is received, Amazon picks, packs, ships and delivers the product to the customer’s doorstep. Moreover, when sellers use FBA to fulfil Amazon orders, the products are listed with a prime badge and are usually delivered in 1-2 days to eligible customer locations. Apart from this, Amazon also handles any returns or customer support for the Amazon sellers.
Amazon gives three order fulfilment options to its seller
Now, let’s find out why Amazon sellers have difficulty in choosing the ideal e-commerce order fulfilment option.
The three options Amazon offers its sellers for fulfilment have distinctive pros and cons. So finding an option that provides the most flexibility, efficiency, and cost savings is crucial. However, Amazon sellers have a hard time deciding the one that best suits them. Let's dive into each one of them.
FBA offers various benefits to a seller, like access to Amazon's network of fulfilment centres across the country, giving Prime badges on listed products, and handling the entire returns management.
FBA has several drawbacks, including high storage and fulfilment fees, complex fee structure, lack of inventory control and more. It means that FBA adds complexity to pricing and minimises your profits significantly.
Amazon takes care of shipping your Amazon orders from your warehouse to the customer.
Apart from shipping, you still have to find and store your inventory in an ecommerce warehouse, pick and pack your orders according to Amazon’s strict guidelines. Moreover, if you fail to adhere to Amazon’s stringent packaging and labelling guidelines, Amazon imposes penalties on you.
As stated above, Amazon sellers have three options in the self-ship. Here are the pros and cons of all of them.
Selling on Amazon indeed has its perks. However, fulfilment is the most challenging part. So it's essential for Amazon sellers to look for a 3PL provider that allows them to retain their profits while adhering to Amazon's strict guidelines. Here's how Eshopox can help Amazon sellers:
Eshopbox provides simple pricing for Amazon fulfilment that includes two components:
Delivery speed matters the most to Amazon, and it expects all its sellers to meet this fundamental requirement with 2-day shipping. However, providing 2-day delivery to your Amazon customers can take a massive toll on your margins. Fortunately, Eshopbox has a distributed network of fulfilment centres spread across India. It allows you to split your inventory and store it closer to your customers—enabling you to reduce shipping costs so that you can offer 2-day shipping at affordable rates.
According to Amazon, sellers with Prime Badge have up to 3X higher sales. Moreover, products with Prime Badge are visited more by customers. Usually, FBA products have Prime badging. Fortunately, Eshopbox is fully optimised for Prime.
Eshopbox meets Amazon's strict requirements so that your listings are Prime enabled, including 2-day delivery and adherence to various guidelines (late dispatch rate, cancellation rate, out-of-stock rate, and more). This means you can offer lightning-fast shipping speeds to your customers across India affordably. Not only will the prime badge boost your product's discoverability, but it will also help you win the Amazon buy box more often.
Eshopbox enables Amazon sellers to centralise their inventory, i.e. you can use the same inventory pool on Amazon and other sales channels without committing inventory to Amazon alone. Moreover, you can still maintain the Prime badge on your product listings. Thus, Eshopbox allows you to leverage multichannel ecommerce and boost your ecommerce sales.
Eshopbox helps you fulfil your Amazon orders and enables you to become an Amazon premium seller. This means you can meet the inspection criteria standardised by Amazon by improving your performance. Let's see how:
Amazon is a lucrative platform for business owners who want to cater to a large customer base. However, Amazon can only help you tap into a customer base of crores while selling online—fulfilling your Amazon orders is a whole another story. If you are still fulfilling your Amazon orders with FBA or planning for it, you should reconsider your options and look for an better partner. As when it comes to order fulfilment, you must leave it to an expert—a tech-enabled 3PL provider like Eshopbox. A 3PL can help you maximise your profit margins and deliver your Amazon orders efficiently to your customers across India. Thus, it will enable you to remain profitable on Amazon with superior Amazon fulfilment.