FBA Series: What’s the Big Deal About FBA?

Lately there’s been a lot of buzz about FBA, or Fulfillment by Amazon. Sellers may be wondering if they?ve missed something: Isn’t FBA just a fulfillment method? Why the prolonged discussion? In other words, why is FBA such a big deal?

FBA is a big deal in terms of what it can do for your online business, and it offers far more potential for growth compared to FBM. For many, it can be the major deciding factor in the scale of profit they’ll be making in their online career.

Perhaps the ones with the most to gain are small business owners, who likely don’t have efficient fulfillment systems in place and don?t want to risk the potential negative effects that a poor customer experience could instigate. In such cases, the difference between FBA and FBM represents the difference between small-time selling and a major business operation.

SMBs aside, there’s plenty more to be gained from FBA that sellers of all sizes can benefit from:

FBA inventory’s eligibility for Amazon Prime

Its hugely influential role on Buy Box ownership

The added safeguard for other significant Buy Box factors like Fulfillment Latency and Seller Rating

The fact that FBA represents a seller?s brand in a more positive light. There is a very strong correlation between using FBA and higher sales performance.

At the same time, don’t forget:

While there are a good amount of professional Amazon sellers who use FBA for 100% of their inventory, this isn’t to say that every third-party seller should do this. It really depends on the individual seller’s resources and the nature of his business.

Sellers should see FBA not as a blanket resource but as another weapon in their arsenal, to be deployed only for the listings it makes sense for. A common misconception is that sellers should either be 100% FBM or 100% FBA, yet most professional Amazon sellers are an FBA/FBM hybrid.

Not every product a seller offers will be a good candidate for FBA for a variety of reasons, mainly size, sales performance, and margin. Knowing which listings it makes sense for is called FBA inventory selection, and this will be covered in a later installment in our FBA blog series.

Want to learn more?