Some good reasons to consider Fulfillment by Amazon
For a while now I've been reading an excellent blog by Randy Smythe, who provides some interesting statistics about his Amazon selling, especially how Fulfillment by Amazon has been getting additional sales for him.Randy ran his numbers this weekend and found a unmistakable pattern:
In January, FBA shipped 796 orders for me.As you can see, free shipping is a huge incentive for buyers, and it seems FBA orders are making up a growing percentage of Randy's business. (You can list some of your items via FBA while continuing to sell other items directly to buyers.)
- Amazon Prime Customers- Made up 20% (157) of those orders.
- Super-Saver Shipping - Made up 53% (423) of those orders
- Regular Shipping - Made up 27% (216) of those orders.
Why do I even mention these numbers? Because, if you are not listing and selling using FBA, you are missing out on a huge number of Amazon buyers, who want free shipping (I still sold 27% of my orders to customers who paid for S&H as well).Read the rest of Randy's post for an illustration of why buyers regularly choose items listed with FBA. (Hint: It's all about the shipping fee and the sorting advantage FBA gives your listing.)
Judging from the FBA Message Board, Amazon is still working the kinks out of this program. Hardly a day goes by without an FBA merchant screaming about how Amazon has fouled up their account. Perhaps the problems are confined to particular warehouses, while other warehouses are managing FBA without too many hiccups.
Judging from Randy's reports, FBA seems to be developing into an important sales tool already.
Labels: Amazon Marketplace, Fulfillment by Amazon











6 Comments:
Seems to be a concerted effort to push FBA. Have not heard anything good about it from actual sellers, except said articles. Amazon is agressively calling vendors who do a certain volume right now, trying to convince them for FBA
Has anybody checked out
www.amazonservices.com
or better
http://www.amazonservices.com/fulfillment/
or even better the pricing section:
http://www.amazonservices.com/fulfillment/pricing.html
There is no room for the merchant to make any profit...Amazon is out there for Amazon, nobody else..then for the paying customers, maybe, but never for the merchants....
Anonymous #1
I am an actual seller! Over the last 30 days I've sold $21,336.32 with 1,363 orders. 100% of them shipped through FBA.
I work on the Amazon business 6 hours a week
Anonymous #2
If you fulfill Amazon.com orders through FBA there are financial benefits. I'm still not sold on Basic Fulfillment fees but I only sell on Amazon.
With FBA. I just add $2.97 to my price, (since I don't get the S&H reimbursement) and I still show up at the top of search.
My cost to ship a DVD is 57 cents. I take in the same amount of revenue as I would if I self-fulfilled and I pay 57 cents to ship what normally costs me #1.60 with DC. (including, packaging, DC and direct labor)
Even when I add the 15% commission on the additional $2.97 (45 cents) I'm still making more money than I would if I shipped it myself.
I also don't have to warehouse the product, pick it, buy packaging, get a SmartMail account or go to the PO. and I don't have to process returns, or do any customer service.
This is, how desperate Amazon is, to make this FBA disaster work:
(also, just in case somebody gets suckered in over the phone: Amazon salespeople are not offering you all this on the phone)
FBA is FREE to use for the next month for select merchants
Until Feb. 29th upon receipt of a merchant's first shipment of inventory to the Amazon warehouse, Amazon will waive the merchant's Pro-Merchant subscription fee through July 15th, 2008; $200 value
Free Fulfillment and storage fees on up to 100 FBA orders
Amazon will waive the fulfillment and storage fees for merchants on up to 100 FBA orders or until July 15th
valued at $400 ( at an average of $4.00/ order)
Free inbound UPS shipping up to $100 when you use the Amazon-UPS shipping option
We will credit you up to $100 in inbound Amazon-UPS shipping for
your first shipment to Amazon; worth $100, we must receive your first shipment be Feb.29th, 2008
Steve, that's the same deal I got back in Sept.
FBA, is where they want to move 3P Amazon.com orders, they are committed to it. They shipped over 500,000 items through FBA during the 4th quarter. Which is not a whole lot in the scheme of things but was enough to prove the model.
I recommend at least testing the service and why not do it save some money doing it.
FBA is no good...I did the free offer and now I am having my products on their shelves and my profit, after everything is said and done is 10%..normally it is about 40%...so much for that! For Amazon a great deal, yeah!
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