Advantages and Disadvantages of Amazon FBA? #172

Do you advise me to invest in Amazon FBA, and what are the advantages and disadvantages of Amazon FBA?

Consider Amazon FBA a tool for your online business. So technically you won’t be investing on Amazon FBA, but you will be investing in your own business using FBA and selling on Amazon.

The greatest advantage of all that Amazon has is the incredible amount of traffic and insane high conversion rates. The high conversion rates are due to the fact that Amazon is highly trusted, and the fact that everyone who types “Silicone Spatula” in the Amazon search engine, is looking to buy a Silicone Spatula!

The second great benefit is the fact that Amazon will fulfill the products for you and get them delivered to your customer in very short time frames.

As for the negatives of selling on Amazon, the main one is that if you want to play in Amazon’s sandbox you need to follow their rules and meet their standards, or else!

If you don’t follow Amazon’s TOS Terms of Service, they can choose to remove your selling privileges from their platform.

Then there are the fees. Some people believe that the 15% of the gross sale plus a pick and pack fee is a very high price for anyone that is selling products with very tight margins, or products that are not very expensive.

The lower the sale price of your product the bigger percentage the pick and pack fee will be, when compared to that price

(because the pick and pack fee is a fixed value, so a $3 fee on a $30 product is 10%, but the same $3 fee on a $10 product its 30%)

And the last negative is that Amazon pays every 2 weeks, instead of immediate payment. For many people who want to grow as fast as possible doubling from month to month, it is very hard to keep cash flow for every new order

After all, selling on Amazon is still an amazing opportunity, and I recommend it to anyone who wants to jump in.

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