Is Amazon Fulfillment Worth it? Pros and Cons

Jerrika Cox

Amazon fulfillment can be a great solution for your seller’s account needs. But the main question is Amazon fulfillment worth it?

There is a lot of time that has to go into inventory management as well as shipping for any business, big or small, and you might be missing out on a process that could make your life much easier as a seller who uses Amazon’s platform.

If you have been wondering what Amazon fulfillment can do for you and thinking that you are not sure that it is worth it, you should read on. There are a lot of benefits to this seller upgrade and you might find that Amazon fulfillment takes care of your every need.

Features Offered on Amazon Fulfillment

This service helps you meet your consumer’s needs and it takes care of so many of the business processes that you have probably been doing in-house at this time. There are pros and cons to this model, but for many businesses, it is the right answer to all of their fulfillment needs. You can be a direct seller or a wholesaler to use this feature.

Amazon fulfillment offers these services for a low monthly fee:

  •         24/7 customer service through Amazon
  •         Access to a dynamic sales network and platform
  •         Fulfillment and shipping costs are included in your monthly seller’s account fees
  •         Returns servicing
  •         Inventory management
  •         Customer service for consumers
  •         Custom shipping options
  •         Damaged item processes and returns
  •         Discounted shipping
  •         Quick delivery services
  •         Lots of storage space
  •         Omnichannel fulfillment

These are valuable benefits for using this service and you are probably aware of just how many hours of your day as a business owner are taken up by working on these needs. If you want to pass off the headaches of inventory and returns and other customer concerns to a third party, Amazon is a great choice for your needs.

Amazon Fulfillment

You will pay far less to use this service with Amazon than you might with other third-party fulfillment services and Amazon will be doing the selling as well as all the other background processes in-house. This can make your turnaround on customer service much more streamlined and efficient overall.

Cons of This Model

There are downsides to this way of fulfilling orders as well and you should also think about these items when you are deciding if you want to use Amazon for your fulfillment service needs.

  •         Returns can increase

People find it to be really easy to return items to Amazon and they might be more willing to return something for a small concern when they buy from Amazon and not a smaller entity. You will not have a lot of added cost when Amazon handles returns, but it can impact your reviews and reputation if people are returning lots of your products.

  •         Cost

You need to be selling a certain amount of goods to make the costs of this service worthwhile. Most companies, they need to be selling at least 40 items a month to make it pencil to use Amazon FBA. You will need to look at your costs if you are hovering around this sales level and see if you can actually use the service and still make money for your business.

  •         Storage fees

It would be nice if Amazon would store your inventory for free, but this is not the case. You will have long-term storage fees for items that are not flying off the shelves and you will need to look into what these are before you assume that you can afford them. Larger items might cost more to store as well, so you should consider this factor before you commit.

  •         Sales Tax

Amazon handles a lot of sales tax processes internally for sellers, but some state taxes can still be hard to deal with through an automated system. Some sellers run into issues with taxes being handled incorrectly for unique items or products that fall into small niche tax brackets.

Is Amazon Fulfillment Worth it

Bottom Line – Is Amazon Fulfillment Worth it?

If you have been trying to make your business take steps to the next level, you should consider Amazon FBA as your stepping stone to reach that goal. There are not many other fulfillment models that are as good as Amazon’s and you will find that using it doesn’t have to be a struggle once you are comfortable with all the ins and outs.

If you are ready to take your business and your financial planning to the next level, we can help you to do that and more. Work with us to reach all of your financial goals and achieve the financial security that you have always dreamed of.

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