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Thoughts on Amazon FBA business
Posted on 8/31/21 at 3:30 pm
Posted on 8/31/21 at 3:30 pm
I’m interested in creating multiple revenue streams to reduce our reliance on my job. I’ve currently got a rental property that generates a little revenue on AirBnB, but I’m thinking about starting an Amazon FBA business. I’d love to hear from anyone who has done it. Pros and cons?
2
Posted on 8/31/21 at 4:13 pm to tom1987
I did it for a season.
Pros- the power of Amazon in your corner. The exposure of your items to potential customers is unmatched.
You keep no inventory. Ship it to the fulfillment centers and forget it.
The fun is in finding things to sell. With FBA no need to spend time making descriptions or taking photos. The listing already exists 99% of time so you just add your offering.
Cons- Amazon's way or the highway. Your inventory is always being picked over for safety issues or incorrect labeling, Etc.
Counterfeits. Multiple times I was falsely turned in as selling counterfeits by other sellers just make my items go away.
Fees always going up so you really have to build in good enough margins. I used an FBA scanner app while sourcing to get an idea of profitability.
Price wars often a race to the bottom in order to secure the coveted "buy box". Don't get caught up in that. Set the price reasonable and leave it for a while.
Might not be a con to some but you don't control the money instantly from your sales. You get paid like a paycheck.
Pros- the power of Amazon in your corner. The exposure of your items to potential customers is unmatched.
You keep no inventory. Ship it to the fulfillment centers and forget it.
The fun is in finding things to sell. With FBA no need to spend time making descriptions or taking photos. The listing already exists 99% of time so you just add your offering.
Cons- Amazon's way or the highway. Your inventory is always being picked over for safety issues or incorrect labeling, Etc.
Counterfeits. Multiple times I was falsely turned in as selling counterfeits by other sellers just make my items go away.
Fees always going up so you really have to build in good enough margins. I used an FBA scanner app while sourcing to get an idea of profitability.
Price wars often a race to the bottom in order to secure the coveted "buy box". Don't get caught up in that. Set the price reasonable and leave it for a while.
Might not be a con to some but you don't control the money instantly from your sales. You get paid like a paycheck.
Posted on 8/31/21 at 6:34 pm to DoctorWorm
Why did you only do it one season?
Posted on 8/31/21 at 8:01 pm to tom1987
Meant a period of time. About a year or so. Was doing ebay at the same time as a side hustle. Phased out fba as I preferred the control ebay allowed. Lots of folks love FBA though.
Posted on 9/1/21 at 1:51 pm to DoctorWorm
I did it for one season as well and echo a lot of what DoctorWorm called out.
Here are my thoughts:
Pros:
- Probably the quickest/easiest way to go from zero to a large business selling physical products
- Once the product is in the Amazon warehouse, they do everything else
- Amazon scale is insane and the amount of sales during peak period is ridiculous
Cons (Lots of them):
- Depending where you source from, product takes a LONG time to arrive from China (assuming you are shipping boat). You need to be thinking 4-6 months ahead.
- Lots of unexpected costs and delays in the logistics of product into the Amazon warehouse (ex: My product got lost by the carrier for 2 weeks)
- Really high Amazon fees if your product is not moving. Even if your product is moving, they take a high % of the revenue
- High rate of customer returns
- Insane competition. As DoctorWorm mentioned, it is a race to the bottom in terms of price
- Amazon algorithm makes getting legitimate reviews a challenge. A lot of reviews are flagged as non-authentic which is frustrating
All in all, I would not go back into it right now. We are currently in the middle of an unprecedented supply chain challenge globally. The cost to move freight from China would be absolutely insane right now and at this point you would be planning for mid-2022 anyways.
Here are my thoughts:
Pros:
- Probably the quickest/easiest way to go from zero to a large business selling physical products
- Once the product is in the Amazon warehouse, they do everything else
- Amazon scale is insane and the amount of sales during peak period is ridiculous
Cons (Lots of them):
- Depending where you source from, product takes a LONG time to arrive from China (assuming you are shipping boat). You need to be thinking 4-6 months ahead.
- Lots of unexpected costs and delays in the logistics of product into the Amazon warehouse (ex: My product got lost by the carrier for 2 weeks)
- Really high Amazon fees if your product is not moving. Even if your product is moving, they take a high % of the revenue
- High rate of customer returns
- Insane competition. As DoctorWorm mentioned, it is a race to the bottom in terms of price
- Amazon algorithm makes getting legitimate reviews a challenge. A lot of reviews are flagged as non-authentic which is frustrating
All in all, I would not go back into it right now. We are currently in the middle of an unprecedented supply chain challenge globally. The cost to move freight from China would be absolutely insane right now and at this point you would be planning for mid-2022 anyways.
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