Is Amazon Fulfillment (FBA) Really Effective Today?
Fulfillment by Amazon can definitely help your products win the Buy Box. For many online businesses, Amazon FBA remains a great choice. However, you should also consider the price of long-term storage costs, issues with customer service, and the potential for product handling errors at the fulfillment centre. Luckily, there are many great alternatives to FBA if you decide Amazon fulfillment isn’t worth it.
e-PickPack Fulfillment processes orders quickly and with a high level of accuracy that exceeds Amazon’s fulfillment standards. Additionally, e-PickPack handles returns and cares for your product as if it were our own at all times. We want to work with you to develop a profitable business that goes beyond Amazon. Call us if you need to reach us.
Here are some typical problems to consider before you choose FBA over an independent 3PL provider if you sell on Amazon and want to outsource your fulfillment.
Costly FBA services
The cost of FBA is the biggest concern, and businesses must keep margins. Amazon charges sellers various fees, including membership dues, monthly storage fees, shipping costs, gift-wrapping costs, etc. Additionally, Amazon receives a percentage of the total sale price, depending on the type of product sold. This percentage charge varies from as low as 6% for PCs to as high as 45% for Amazon device accessories. Margins are challenging to maintain, given Amazon’s high storage rates. Check out Amazon’s storage price list and compare our prices with other fulfillment providers.
Amazon FBA Inventory Chaos
One of the most frequently reported problems from Amazon third parties is improper inventory handling. While waiting for their merchandise to log into Amazon’s fulfillment warehouse system, several sellers complain about FBA delays lasting days or weeks. They might run out. Lower seller ratings and even canceled orders may follow from this.
Additionally, inventory that is stored on a pallet at a loading dock ties up your capital while doing nothing to generate revenue. And your product can also get lost in the Amazon supply chain. You must file a claim when this happens, and Amazon will usually reimburse you for the loss. You want to reduce that as much as possible in your eCommerce business.
Amazon operates large-scale fulfillment and logistics operations. We have an efficient system for that. However, the purpose of these efficiencies is to improve Amazon’s bottom line, not yours.
The consumer experience when FBA ships goods are focused on Amazon rather than brands. All Amazon FBA orders are shipped in packaging bearing the Amazon logo. There is no choice to ship in branded or plain boxes or to attach a personalized note from you to the customer. Orders will still be delivered to Amazon Boxes. This may cause misunderstandings and prevent you from developing the relationship you want with your customers. You should go beyond Amazon FBA if developing a solid brand is vital to you.
3PL warehouses do more than store inventory and pick, pack, and ship orders. E-PickPack Fulfillment allows you to add inserts and personalized marketing materials to your customer’s orders, find your own branded boxes, and add tissue paper with your company logo. If you have any problems, we will work hard to solve them for you.
FBA’s poor customer service
Many FBA sellers report that they actually spent hours on the phone and sending countless emails to customer service, but their problems have not been resolved. There’s a chance it won’t be resolved for a few weeks. Numerous Reddit groups, forums for Amazon sellers, and countless other websites allege that Amazon FBA customer service is frequently slow, confusing, and completely ineffective.
The majority of the time, Amazon Prime shipping is free for items that are fulfilled by Amazon. While this may help you gain more Prime consumers and increase your sales, you are still responsible for the delivery fees.
Not you, but Amazon decides which things qualify for free shipping. You will be required to pay the delivery expenses for Amazon Prime orders, regardless of your item’s profit margin. For products with thin profit margins or orders with significant delivery costs, Prime might turn a transaction into a loss.
When comparing Amazon FBA fees with E-PickPack fulfillment, you must also determine if you can afford unreimbursed Prime shipping expenses in addition to the service’s fees.
Fulfillment center locations that store inventory must collect and pay state sales tax, according to the largest US accounting firm. Amazon has fulfillment warehouses in at least half of the US states. It’s challenging to track exactly where these fulfillment centres are located, as Amazon does not want to disclose this information. If you have enough income in that state, you must file a state income tax return.
Many online sellers find it difficult to reconcile Amazon’s fees, brand policies, and fulfillment issues with their impact on revenue. Amazon may be a great sales channel, but it’s a poor fulfillment solution. Selling products on Amazon doesn’t have to be frustrating with Fulfillment by Amazon problems.
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