Fulfilment by Amazon: The Pros and Cons of Using an Amazon Fulfilment Centre

There are endless possibilities when it comes to eCommerce selling, especially when the industry is constantly evolving and changing. However, choosing the best fulfilment option for your business can be tricky, and you may find yourself not knowing which one to pick.

Everyone has heard of fulfilment by Amazon by now, their online marketplace offers consumers the opportunity to buy pretty much anything they can think of, thanks to their diverse range of over 1.5 million sellers.

Nowadays, customers are impatient, they don’t want to wait weeks for their order to arrive, nor do they want to fork out shipping fees- which is why Amazon is so ideal. 

It’s fair to say that fulfilment by Amazon is leading the industry right now, with smaller fulfilment service providers trying to keep up and implement similar features, such as Next Day Shipping.

Much like anything else, there are pros and cons when it comes to Amazon fulfilment services -we want to talk to you about each one so that you can make the right decision for you and your business. 

Without further ado, let’s dive in!

What is Amazon FBA?

FBA – Fulfilment by Amazon. In short, you sell on Amazon’s platform, but let Amazon handle your picking, packing, shipping, returns, and customer management. Everything is essentially handed over to Amazon while you purely focus on selling products and growing your business. 

Now, lets talk about some of the ‘pros’ of Amazon FBA

The pros of Amazon FBA

Amazon Prime

You gain access to all the benefits that come with Amazon’s beloved ‘Prime’ feature. Between December 2021 to May 2022, it was recorded that around 2.5 billion users visited Amazon each month- that’s 2.5 billion potential customers for you to reach. 

FBA sellers are eligible for Prime shipping, Prime deals, bundles, and more. Not only this, but Prime users have a higher chance of seeing your product thanks to Amazon’s special ‘filter’ system, which will allow users to see Prime-only products. 

Streamlined customer support

Another benefit of FBA is the fact Amazon handles all of your customer service inquiries for FBA-fulfilled orders/products. This is beneficial because it means you don’t need to spend time responding to customers and can spend more time growing your business. 

Don’t need to worry about hidden fees

This is both a pro and con of Amazon and will be discussed in more depth later, but despite the fact, Amazon’s fees can sometimes be steep, they are very transparent about all of their fees, and you won’t find yourself feeling deceived as a result of hidden fees. 

Multi-channel fulfilment

Another benefit, and competitive advantage is the fact you have the ability to fulfil orders from other channels while still the inventory stored in the Amazon fulfilment centre.

Essentially, this means that you can sell things on your own personal website, and can use the inventory from Amazon to fulfil those orders. You won’t get the same Prime benefits when doing this, but it is still a useful feature for FBA sellers. 

Faster fulfilment and faster shipping

We have to give all the credit to Amazon when it comes to the newly developed high expectations exhibited by customers. Amazon showed us all that they could provide lightning-fast shipping, and as a result of this, customers have been conditioned to expect exactly that. 

Nowadays, most customers hate waiting for their delivery. In a consumer’s ‘ideal’ world, their order would be at their door before they even pressed ‘confirm’ at checkout.

Well, that’s a bit extreme, but you get the gist. 

Regardless, you can meet customer expectations thanks to Amazon’s ability to fulfil and ship orders at an extremely fast rate, meaning you will have satisfied customers who are likely to return to you in the future, and you may even have a better chance at driving more sales.

With that being said, Amazon also has the ability and resources to keep up with the demand that comes with things like seasonal sale fluctuations- like Christmas. 

Ability to hit global markets

Thanks to their resources and international network, FBA sellers may find it easier to tap into the international market and reach a whole new range of customers, meaning you can grow your business even more.

Now you know some of the benefits, let’s talk about the cons of Amazon Fulfilment…

The cons of Amazon Fulfillment

Higher fees that can fluctuate 

When you’re as successful as Amazon, you have the ability to charge more for your services. You may have already noticed that generally speaking, Amazon is one of the most expensive fulfilment options out there right now. Good, but expensive. Not only this, but their fees usually increase around the holidays as well, so that is definitely something to keep in mind! 

Difficulty with brand building and Inability to customization

Amazon’s plain, brown packaging is notoriously recognisable. This is an ok option for sellers who aren’t too focused on brand image, but if you’re a business that prides itself in its unique, custom packaging, then FBA is probably not going to be a good solution for you.

Amazon offers no custom packaging, special inserts, etc. When a customer buys from Amazon, it is highly likely they will assume they are buying from Amazon themselves rather than you, an individual seller. This can make it harder to ‘stand out from the crowd’, and it may be harder to form a strong business-consumer relationship. 

Amazon may be YOUR direct competitor

Yeah, you read that right. Amazon may end up being your competitor. Now obviously, Amazon isn’t just a fulfilment provider, they sell their own branded products too. They are both a fulfilment provider, an online marketplace, AND an eCommerce business themselves. 

Unfortunately, it has been reported that sometimes Amazon will make their own version of a product sold by one of their FBA sellers, which is then sold as part of their ‘Amazon Basics’ line. Not only this, but if you’re selling a product that is similar to something currently in their own line, then you’re going to be competing directly with them. This is not ideal at all since they already have many competitive advantages. 

You don’t want to be in competition with your fulfilment provider. 

Limited access to Amazon’s team

Amazon has the resources for a lot of things but doesn’t have the resources required to pay attention to every individual seller. Due to their size, they just simply cannot afford to pay attention to everyone individually.

Between fulfilling orders, dealing with customer service, and running their own brand, it becomes a bit unrealistic to expect them to be on hand for all 6.4 million of their FBA sellers at any given moment. However, this can be extremely frustrating for sellers, especially if you’re new to things. 

No customer interaction

This is both a blessing and a curse and can be both a pro and a con. Amazon handles your customer service for you so you aren’t tied down by customer service duties, have more free time, and customers don’t need to wait too long for a response. 

But this means that you don’t get to interact with them and build strong business-costumer relationships. Your customers might not even realise you’re a business and may think it is all just Amazon. If building more personal relationships with your customers is important, you may want to avoid FBA, as this is a non-negotiable for Amazon. 

Should I go with FBA?

As you can see, much like everything else, there are pros and cons of Amazon to be taken into careful consideration before you make a final decision. To work out which is more profitable and smoother for your business, you need a lot of research and a strategic approach.

So, don’t rush your decision! There are also other options available. 

Want to explore your options with TSP? We deal with all areas of order fulfilment, including Amazon fulfilment services! Contact us today for more information.