For those side hustlers looking to expand their reselling business from eBay or those looking to start. It is important what to know before selling on Amazon to avoid costly mistakes. Amazon provides a great opportunity to sell on the largest ecommerce platform. However, with Amazon there are many rules and fees that one must be aware of before jumping on the platform. If not, it is possible to make less than expected and even lose money if those fees are not considered.
When you decide to sell on the Amazon platform there are two options as to how you will fulfill products to customer. You can fulfill the products yourself which is called Fulfillment by Merchant or FBM. The second option is to use the Amazon resources to have Amazon fulfill the products for you using Fulfillment by Amazon or FBA. Both selling methods have their pros and cons that should be considered.
FBA is a popular method that allows you to send in your products directly to Amazon’s warehouse. Amazon will store the products and ship them out directly to customers as they are ordered using Prime Shipping. Amazon also handles all the customer support to those that have any issues are questions about the product.
FBM on the other hand lets you list your products on the Amazon platform but the seller (you) must handle shipping the product to the customer, storing the products and customer support if there is an issue. Much more like the eBay model where you are just using the Amazon platform for the exposure but are responsible for all the other parts of completing the transaction with the customer.
Other factors that you will want to consider are the following:
Size and weight of items you are selling
Control of customer experience
Feedback
How quickly your items will sell (turnover rate)
Expenses and feesSize and weight are important factors because Amazon’s FBA storage fees do not work well for large oversized items or heavy products. It is critical that before sending any product into FBA that you run the numbers using their calculator to determine how profitable
https://sellercentral.amazon.com/hz/fba/profitabilitycalculator/index?lang=en_US . Many sellers have learned the hard way that after seller fees and storage fees their profit is minimal or worse there is none. Ideally, you want small items that move fast when using FBA to limit the cost of fees.
In the end both FBA and FBM models can work. It comes down to the type of products and items that are being offered. Here is a list of some of the top categories for both FBA and FBM.
Check out our other tips for selling on the Amazon marketplace by clicking here.
