Amazon is the biggest eCommerce platform globally, and sellers who outsource their products through Amazon are often known to make a massive pile of money. But are you wondering if it’s true that anyone who sells their products through Amazon can make a fortune out of it? Or is selling on Amazon worth it?
Well, the answer to this question depends on many things but worry not. We will get to know about all of these dependencies and how you can decide if selling on Amazon is worth it for you or not.
What Makes Amazon So Special?
No socially literate human in the 21st Century can say that they haven’t heard of Amazon. Amazon is a platform that is way ahead of its competitors. The platform hosts an active customer community whose numbers sum up to more than 300 million people.
Its community comprises customers from about 180 countries. Hence, you can rest assured that there is never a lack of customer demand on the platform.
Among these 300 million customers, more than 150 million customers are paying for the premium services of Amazon Prime. This shows how much percentage of customers present on the platform can pay just for their trust in Amazon’s services.
As an exciting seller fact, you may also want to know that small-to-medium-sized American Amazon sellers collectively sell more than 4,000 products on Amazon every minute.
Hence, what makes Amazon so unique is the trust and reliability it has built among its customers. Seeing this number of customers, it is not surprising that many sellers keep trying to join the platform and become successful. As of now, more than 2 million sellers are associated with Amazon, and a lot more are queued up in the line.
So, if you wonder if this platform is unreliable or will cease to exist in a matter of time, you should throw that thought out of the window right now.
What Choices Do I Have as a Seller on Amazon?
When it comes to handling the sales operations of Amazon, you have two options to choose from.
1. FBM: Fulfilment by Merchant
Choosing the route of FBM is pretty much like handling and selling on a platform’s subdomain. You will get to sell in the name of Amazon, but the experience will be similar to selling on your separate website. You will have to manage all the tasks related to selling your products. These include everything from maintaining inventory to shipping the ordered products.
2. FBA: Fulfilment by Amazon
On the other hand, with Amazon FBA, you get a chance to let Amazon handle all of these work processes while you get to think about the new ways of increasing your sales and profits. You just need to send your products to Amazon storage, and they handle all of the inventory management and shipment.
Types of Fees That Amazon Charges
The final charges that a person has to pay for selling on Amazon vary from each seller due to the different types of fees that Amazon levies on its sellers. The multi-layered fee structure of Amazon is something that any Amazon FBA seller needs to know in detail. Below are the six types of fees that Amazon FBA charges its sellers with.
- Monthly Inventory Storage Fee
The monthly inventory storage fee is the standard amount that depends upon the number of months that your product lies inside a fulfillment center of Amazon. The amount of your stored inventory is used to calculate the final cost.
- Returns Processing Fee
Amazon handles the return process too when a customer returns your product. The customer does not have to pay for it as the product has a free return policy. But shipping the product to the customer and getting the product back to the facility costs Amazon.
But Amazon does not cover this fee; the seller has to pay it. Hence, the return processing fee depends on how much your sold products are returned to the facility.
- Long-term Storage Fee
If any of your products stay in Amazon’s inventory for more than a year, you get this fee included in your bill.
- Fulfillment fee
Amazon FBA charges you a portion of the fortune that you make on each sale, and this is the name that it gives to that fee.
- Unplanned Service Fee
When you send an improperly packaged or labeled product to the Amazon FBA warehouse, Amazon charges you this fee.
- Removal and Disposal Fee
Often, you’ll find that one of your products is a liability to you, and you’d like to get it returned from the inventory. For sending you that product back, Amazon will charge you with removal and disposal fee.
Pros & Cons: Selling On Amazon
In this section, we have given the pros & cons of selling on Amazon. Let’s have a look.
- Prime Shipping: When any seller uses the FBA to fulfill their order, your product will get the prime badge and have an access to Amazon sizeable which order from Prime Seller.
- Prime Members: The Amazon prime member gets access to more than 150 million which are spontaneously ordered on Amazon.
- Consumer Expectation: Consumers are going to assume your products as they have assumed you on Instagram.
- FBA Fees: The Amazon FBA fees depend on the weight and size of the product. The referral and FBA fees are 30 to 40% of the product price.
- Storage Fees: If you are storing your product on the Amazon fulfillment center using FBA you need to pay some storage fees.
Is Selling On Amazon Worth it?
Now that you know all that you need to know about selling on Amazon, you might still be thinking if you’re making the right choice or not. A good practice to do for confirming that is comparing your business vision to the provision of Amazon FBA.
Look at the similarities in the business plans and whether they complement each other or not. If you choose to stick with selling on Amazon, keep in mind that consistency will be your key to success. As in any other business, there will be times when your product inventory will be emptying with sales like never before, and there will be times when some of your products will just move from one shelf to another for a long time.
But either way, selling on Amazon is quite a good choice as you get to sell on a platform that hosts the largest buying crowd on the planet, and the fee that it charges you for it is entirely justifiable and inexpensive.
Hence, by most chances, if you stay consistent with the quality and quantity of your products, you can become a great seller on Amazon and build a fortune off of it.
Selling on Amazon is a dream for many people in business. The platform is renowned in all parts of the planet, and its success gives more success to its respective sellers.
The doubt about whether or not the platform is suitable for selling your products can go away if you approach it with a data-driven mindset. If you make the right choice and put in the required hard work and time, you might become the next known name on the list of famous Amazon sellers.