As an Amazon seller, by joining Amazon FBA, you can use Amazon's warehouses around the world to store, pack, and ship your products. For entrepreneurs looking to expand their business and become more competitive locally or internationally, the services offered by FBA are attractive enough, but before you join, you need to know the following:
1. Inventory management.
Amazon won’t handle it all for you. You need to keep a close eye on your inventory levels and restock when appropriate. If you have a lot of products to manage, it makes sense to invest in an inventory management system that works with FBA. Otherwise, you might be overwhelmed by new orders and shipments, or worse, run into under-stock or over-stock issues.
2. Potential profit space.
On Amazon, your products will be competing with other sellers from all over the world, which means you may have to price your products lower than usual. If your production and shipping costs are high, Amazon may not be a good fit for you. Therefore, it is very necessary to calculate the profit margin in advance before entering Amazon.
3. Amazon fees.
For FBA newbies, you need to pay in advance for order processing fees, picking and packing fees for each product, and storage fees (based on the area you occupy). In addition, you will also need to pay additional fees depending on the weight, size, and storage time (more than six months or peak season storage) of the product.
4. Amazon category approval.
Listing products in some special categories on Amazon requires pre-approval from Amazon. If your products fall into these categories, it may delay product listing and affect overall sales.
5. Freight.
In some cases, you are lucky enough to be included in the Amazon free shipping program. Most of the time, you will need to pay for shipping yourself. This can add hundreds to thousands of dollars to your monthly costs (depending on your order volume and the type of logistics service you use).
6. Production and procurement efficiency.
For example, if you are engaged in distribution, you need to work hard to find a low-priced and stable product to ensure your profit. If you manufacture the product yourself, you need to ensure both quantity and quality, which can be a daunting task.
7. Returned and damaged products.
Finally, you need to consider that some products may be damaged during transportation or may be returned by customers. How will you handle customer return requests? What do you need to do to ensure customer satisfaction without affecting your store rating? Amazon may be able to give you some suggestions, but it won’t run the business for you.
