Fulfilment by Amazon (FBA) refers to a packaging and shipping service provided by the online retail giant wherein in sellers allow Amazon to store and subsequently ship their products once they’ve sold. This service grants sellers more flexibility in their selling practices. Once they’ve handed their package over to an Amazon fulfilment centre, the employees prepare, package and ship the product after it’s been sold on Amazon.
FBA was introduced back in 2006 at a time when sellers would usually ship their products by themselves or hire third-party shippers to do it for them. The service was an instant hit and many sellers turned to it to ease their own burden in terms of either labour or costs.
However, the question is: Is FBA still worth it in the year 2021? The short answer to it is yes.
The World’s Leading Online Retail Store vs. Black-Hat Methods
Amazon is currently one of the ‘Big Five’ companies operating in the United States and the largest company of its’ kind operating anywhere in the world. The retail website holds the largest share in online retail businesses with over 36% and generates an annual revenue of $333.8 billion.
Why is this important to know? Because Amazon is a household name that has become synonymous with online purchases. FBA is a service offered by the giant for goods that sellers advertise on their website. Sellers often sell their merchandise on Amazon because the website has an established customer influx and handles logistics at their end.
In 2021, Amazon holds 36% of the world’s share in online retail business and this number is expected to go up to 50% by the year 2026. From a logical standpoint, FBA will expand with more fulfilment centres opening up over the world, better services, and several other features that are concurrent with the business’ growth – and it’s growing.
Benefits of Using FBA Services Over Other Services
- Being Associated with Amazon
Amazon is a name synonymous with online retail and therefore buyers tend to patronize sellers that are associated with that name. Your product might be one listed on Amazon, but another seller goes for FBA services to build better customer rapport.
- Customer Service by Amazon
The intent behind launching FBA was to give Amazon streamlined control over the handling and shipping of products. The service takes the burden off of sellers and allows Amazon to maintain their track record for being speedy, hassle-free, and properly handled.
The situation is a quid-pro-quo: Amazon needs you to trust them and you need Amazon to help take the load off of your hands. Amazon therefore offers 24/7 customer support to its sellers.
The service handles inquiries, returns, and refunds on behalf of FBA sellers. The service is free, except for the Returns Processing Fee that is applied for select product categories.
- Subsidized Fees
Sellers using FBA will be able to pay less in shipping compared to if the items were being delivered from an individual’s account. Sellers can furthermore offer free shipping over certain amounts since products sold through FBA are eligible for Amazon Prime and FREE Super Saver Shipping.
Lastly, the ongoing situation with the pandemic has led several buyers to become increasingly restricted in their options as has it made sellers. Amazon provides a transparent model that can be evaluated by buyers and sellers. This is something that helps build trust and inadvertently impacts the name on the box for the package.
In conclusion, FBA service is formidable and profitable for sellers in 2021 because of Amazon’s continual expansion in the global market.