5 replies
Hi Warriors, I'm seriously thinking in taking the plunge in February 2014 and getting involved with the Amazon FBA program and would like to hear from people who've had experience with it.

The biggest problem I can see in the current economic climate is profit margin. I have a few products I've sourced which I think can be sold on Amazon for a nice mark up, the biggest stumbling block is the costs of storage, picking and shipping details.

I can see why the "Fulfillment By Amazon" business is attractive as opposed to Ebay where you have to keep stock of the items yourself, but the additional costs could eat away at the profit margin.

I don't have a problem with marketing the products or finding a hungry market, it just comes down to profit after all the costs have been met and I also not to keen paying for items that are sitting in their warehouse collecting dust.

Look forward too any sensible comments from fellow Warriors.
#amazon #fba
  • Profile picture of the author SportsMarketer
    I have sold on both eBay and Amazon in the past. I made the most profit by selling through an Amazon Webstore because I had a very big store. It is difficult to make a decent profit per sale on either site.

    The FBA is a nice time saver but for me it did eat too much into my profits.

    Steve
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  • Profile picture of the author Lurk
    read thread #21 and decide for yourself http://www.warriorforum.com/main-int...ml#post8791169
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    • Profile picture of the author garyisonline
      FBA fees can be confusing so you'll want to make sure you've got a good calculator.

      One benefit is being able to take advantage of those proud Amazon prime shoppers. You'll be giving 2 day shipping to those folks at no additional shipping cost to you.

      And on the topic of shipping. You get to use Amazon's shipping partner rates and those are great! It can be about 1/3 of what some small sellers pay to ship! ...AND they'll even cover return shipping and customer service inquiries for your SOA sales. Woohoo!

      However, now take into consideration the cost to have your product shipped to you from your wholesaler, and then the additional cost to ship it in to FBA. Double inbound shipping hurts...a LOT.

      Some wholesalers will ship directly to FBA for you, but consider the labor of having to go through and bag and label your products exactly the way Amazon wants them done. Your wholesaler may not wanna do that. So that means the labor will be on you...unboxing from your wholesaler, preparing, bagging and labeling your items, then boxing it all back up to ship to FBA.

      OH AND THEN AFTER you get it all boxed up for FBA and start preparing your shipping labels THEN they tell you that you need to divide up your shipment and send it in to three different FBA warehouses in different parts of the country. That increases your shipping costs even more...not to mention the additional time to break all your boxes open again and do the split.

      All of that labor and cost even before you get to start selling anything.

      Once your product is all in there, the fees aren't too terrible. If you're inventory velocity stays steady, meaning nothing hangs around in storage for more than a month, and your items are on the smaller side, the storage fees are chump change. The pick and pack fees are a lot less than your outbound shipping for certain!

      There are lots of nit picky details, including how they handle broken and lost items (they do break and lose things) etc. So you'll want to go through their tutorials and terms very carefully.

      Also keep in mind that you can have Amazon fulfill your eBay and website orders too, but THOSE fees can get close to unreasonable, so keeping tabs on that math is very important.

      Also keep in mind that for Pro Merchants, the Amazon Webstore used to be free...in Feburary of 2014 they are going to start charging $80 on top of the $40 Pro Merchant fee. Not sure if $120 would bug you or not...but just be aware of it.

      Also, I preach this a LOT...don't get yourself or your business dependent on a third party merchant for your success. Always always build your business independently with no one 3rd party point of failure. Google, Amazon, eBay, Etsy etc tend to be moody and flakey. They've bonked many a good business over the head for no logical reason. I've gone to blows on multiple occasions over their ridiculousness. Also...don't take them at their word. If you call seller support 3 times...you'll get 3 different stories. They change the rules so many times, they can't even keep their "staff" trained.

      That's pretty much all I can dump out of my noggin for now, let me know if you have any more questions.

      Good luck!
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  • Profile picture of the author focusedlife
    As was mentioned before....

    FBA is freakin' awesome. I've been selling for about a month or so....always make the money back, however, the fee schedule and restrictions are quite confusing.

    If you decide to FOCUS on it then its most definitely the fastest, easiest way to make money online, point blank, no question about it.

    The problem really is that it has to be your core focus and you DO need capital to get it going.

    I find that it probably going to be a major money stream focus of mine, most likely within the next 9 months.

    Offline, info products and coaching are my bread and butter....FBA...right now, is gravy money.

    Regards

    Los
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    • Profile picture of the author shmeeko69
      Thanks for the excellent responses. After reading them, I'm probably going to think long and hard in 2014 about whether I want to take the FBA journey or not and is it right for me and the future direction I want to take with my online portfolio.
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