Every online business is in a constant balancing act to find the happy place between the price of the product and the cost to fulfil orders. Products need to be shipped in a timely fashion, but those shipping costs can add up quickly. Customers are equally in a balancing act, between the price of the product and the cost to have it shipped. Fulfilment by Amazon, or FBA, has emerged as a way for online retailers to offload some of the work involved in filling orders and to benefit from Amazon’s special shipping offers. Is FBA the right choice for your business, though?
Growing from Post to Pallet
One of FBA’s benefits for sellers is that, precisely by offloading the work of packing, shipping, and customer service, you can focus on marketing, production, or other strategic tasks that will help your business grow. But it is not necessarily for those who are just starting out. FBA actually requires sellers of “non-small parcels” to send goods by pallet, so you need to already be moving a certain quantity of product. How much? A standard pallet is 1 by 1.2 metres with the load reaching 2.2 metres in height. If you’re at that point, pallet delivery is, fortunately, a cost-effective option, whether you are sending directly to buyers or to an Amazon fulfilment centre.
Creators and resellers of artisanal products such as food or crafts are usually shipping in small quantities, and their customers are more likely to have shopped carefully for something specific. In these cases, it will likely be best to ship by services such as UPS or FedEx because customers are willing to pay the extra amount, and you have peace of mind knowing that you packed and shipped the product yourself.
Thar Be Gold – and Dragons
Most sellers of those small-quantity goods remain on platforms like Etsy and eBay, or they manage their own ordering and payment processing. The advantage here is control, visibility of the whole process, and the ability to offer personal service to buyers. You can brand your boxes, add special inserts like notes or cards, use eco-friendly packing materials, and so on. In the realm of speciality products or just small-quantity trading, FBA represents a loss of control that can ultimately harm your small business.
Fulfilment by Amazon does offer benefits. Aside from those mentioned above, the service costs nothing to join; as a merchant, you pay only for what they ship for you. For high-volume sellers who don’t want to have a lot of employees or keep stock in-house, AFB can be the perfect solution. You can’t beat the convenience.
But seller beware. This all comes at a price that might not be obvious at first. To get back to our discussion of shipping methods and cost, AFB will dictate where you send your goods, and they can change that location at any time. So you might pallet deliver goods to the centre at Slough but later be told you have to ship to Peterborough instead, which can add to your cost depending on the pallet courier you use.