6 days ago Last updated June 24th, 2020 28 Reads share

7 Disadvantages of Amazon FBA

Image Credit: DepositPhotos

You may have heard from a friend or read somewhere how people are getting rich through Amazon FBA. It is true, but it all depends on your approach towards this business. It is as difficult as opening a store on the streets. In this article, I have discussed some of the hard truths you will rarely hear concerning this line of business.

Facts You Have to Deal With Before Getting Into Amazon FBA

Out there, there is a lot of hype on how fulfillment by Amazon is making people rich every day. This hype has led to very many people joining the venture, thinking they will make their first million dollars in one month. So many people have hurriedly invested some little money here and have ended up with significant losses and quitting. You need to spend a reasonable amount if you want to start making any profit.

This hype has led to there being a lot of competition from even inexperienced people who have no idea what they are doing. You find most newbies all trying to sell the same product, and this makes it quite tricky.

Amazon FBA fees for fulfillment and storage is quite high. It means that you either end up with very little profit or no profit at all. Small scale entrepreneurs are likely to suffer huge losses after their first month.

Amazon has strict rules on the packaging of products before sending them to their warehouses. It is a tedious task which Amazon offers to do for you but at an extra cost. If you cannot pack your products as required, you either end up paying Amazon even more or having your products rejected at the warehouses.

In eCommerce, there are likely to be returned goods by customers. Amazon does not incur the cost of shipping goods back and refunding customers. It is challenging to make a profit when you frequently suffer such losses.

Operating an Amazon FBA business requires you to keep track of products, in other words, known as inventory. It involves staying updated on the products you currently have in stock, what you need to order before it runs out, and what is not selling. It requires a lot of your time and regularly visiting the online store. If a product is not selling, you have to request Amazon to ship it back to you, which is going to cost you.

Another main problem that many people face is deciding what to sell. It is difficult considering the competition of selling the products that are on-demand on Amazon. IT requires you to do a lot of research and how to market. It is also very demoralizing when you find someone selling a similar product to yours but at a much lower price.

Conclusion

The above hard facts will always be there in Amazon FBA. You cannot get rid of them or run away if you choose this venture. The best solution is to come up with a plan that will help you manage them along the way.

Amazon logo in mall -DepositPhotos

Adam Eleiko

Adam Eleiko

Read Full Bio