Fulfilment by Amazon or Seller – Which One is Right For Your Business?
Amazon is the perfect platform for those who want to start a business. It has millions of users every single month, meaning your products will be seen by a huge audience. When you first start listing products you’ll be given two selling options. The first is fulfilment by seller (that’s you), and the other is Fulfilment by Amazon. Both look quite similar to the end user, with some key differences. This guide will walk you through the two options, so you can decide which is right for you.
Fulfilment by Seller (You!)
If you’d like complete control over your stock and your service, the fulfilment by seller option is for you. You store your own inventory, write your descriptions, list your items and wait until they’re sold. Once sold, you then package, label and ship the sold item to the buyer’s location.
You can opt for either a basic account, which allows you to sell up to 35 items with a listing fee of 75p per item, or a pro package which charges you £25 a month + vat to list as many items as you wish. The pro package is ideal for a large-scale seller, and currently the first month is free to trial.
The basic package allows users to sell on a small scale, but does not offer the ability to sell in every one of Amazon’s categories. It also doesn’t enable you to upload items through automated tools or APIs; making the listing process more time consuming and costly. Pro plan buyers also have a 1-click purchase option to offer their customers.
Referral fees vary between 7% and 45% depending on the items listed. You can see a full list of Amazon Referral fees here.
Fulfilment by Amazon
Fulfilment by Amazon is a little less hands-on, allowing sellers to focus on other things like job or family commitments. This is all thanks to Amazon taking away some of the work for you.
When you buy your stock to sell on Amazon, you ship it to them, and they store it in their warehouse until someone buys an item. Therefore leaving your floor space free! When it sells, they package and label the item and ship it to your buyer for a fee based on the size of the item, which they charge to you.
With Fulfilment by Amazon, you have to consider the monthly cost implications of storing your stock. Prices are charged per cubic metre and cubic foot on a monthly basis and depends on the month(s) you are storing your stock there. In January-September, you can expect to pay around £10.59 per cubic metre of stock. However, in October-December that rises to £14.12 per cubic metre to cope with the demands of Christmas. It’s also important to note that if you keep stock at Amazon for over a year you are charged a rather hefty £882.50 in addition to your monthly storage costs for long-term storage fees.
The Pros and Cons
While that may sound expensive, you do get other added benefits of selling using Fulfilment by Amazon. All of your listings offer free postage to Amazon Prime users, increasing your chance of a sale. The items are also listed on all five of Amazon’s selling platforms to get as many viewers to it as possible, which makes it a viable option for long-term sellers who are looking to make a tidy sum rather than a few pounds.
So, when you first get started with Amazon, you have two key choices. You go down the fulfilment by seller route and keep all of the stock in your home or warehouse. While also dealing with your own customer service and paying a fee to list on Amazon. Or, you take advantage of the Fulfilment by Amazon route; letting the retail giant store the stock for you and handle the rest. Which one can you afford and which one works for your business? Only you can decide!