Fulfilled By Amazon (FBA) is indeed, a brilliant idea.
It’s also an unbelievably huge, complicated mess that has reduced grown men to tears.
The concept is simple enough to anyone who understands drop shipping. You purchase bulk items from a third party — usually one located in a country where wages and expenses are insanely low — then mark them up and sell them online without ever touching a package.
Amazon inserts itself in this cycle and the third party goods get shipped to one of their warehouses where they store, package, ship, deal with all sorts of customer issues and then take a fee. Sounds easy. But it’s not.
You’re playing with Amazon. That Amazon which is currently worth more than the GDP of Kuwait. The process of selling on Amazon is so detailed and delicate that most vendors simply give up. In addition to the fees paid and the set-up headaches, it is an unsaid fact that you will need to pour money into an ever-gaping maw since you are (most likely) competing with several hundred or thousand vendors — who bought the same, identical product. Advertising quickly adds up and somewhat shady practices need to be deployed to get your product noticed. If caught, Amazon can (and does) shut you down in a second with no appeal.
The idea of passively watching your bank account swell while on some tropical island quickly becomes a depressing reality.
In her excellent article in the January The Atlantic, Alana Semuels’ How To Lose Tens of Thousands of Dollars on Amazon, she describes how this scenario has allowed a very special type of “consultant” to thrive.
Amazon depends on both of these players as more than 50% of all 500 million of it’s products come from Marketplace vendors. So it’s in their best interest to address this quickly and effectively… which they’re not doing.
I’ve successfully integrated several clients’ sites and products into the Amazon Marketplace. I have also advised many more clients to avoid it. It’s easy to say that you want to sell on Amazon but the reality is that there are several (very unpleasant) factors to consider.Often, it’s better to take the money you would spend on Amazon (and other sales channels) and reinvest it into your existing operations. Operations over which Amazon has no control
cgk.ink can help determine if sales channels are right for your online projects. Let’s chat and see what your options are.