Pros and Cons of Amazon FBA in 2022
When it comes to Amazon FBA vs dropshipping comparison, the following pros and cons will allow you to take the right decision, there is enough reason to establish amazon fba as passive income.
Pros of Amazon FBA
You now know the pros of drop shipping. Here are some pros of Amazon FBA that you should know.
1. Enough Time to Focus & Scale Your Business
Amazon takes care of the product packaging as well as the shipping process. It also provides excellent customer care services. Keeping that in focus, there is nothing much left for you to do. Hence, you have enough time to focus on scaling your business effectively.
2. Successive Goodwill
Amazon’s FBA allows you not to tirelessly focus on establishing a brand name for yourself. Thanks to the honoured goodwill of Amazon, you will get all the brand recognition you need. Yes, it comes in quite handy and your online store will be able to scale significantly.
3. Larger Customer Base
Developing a customer base is one of the most difficult tasks that any entrepreneur has to face. Nonetheless, with Amazon’s FBA program, you will be able to enjoy their massive customer base and extract fruitful results.
4. Returns and Replacement Policies
This is one of my favorite aspects of the FBA business model. You don’t have to worry about anything. Whether it be packaging, shipping or returns. Customer services are Amazon FBA’s primary task. It will allow you to maintain loyal customers.
5. Better Profits
The products that you are unable to sell for a good profit margin on your website, you can sell at higher prices on Amazon. Once again, all the credit goes to Amazon and its brand image.
Cons of Amazon FBA
There are some cons associated with Amazon FBA as well. Compare them against the cons of drop shipping to make a more informed decision.
1. No Record of Inventory
Unfortunately, your unsold products will get accumulated. It might become large enough that you won’t be able to maintain a proper record of your stock.
2. High Competition
Undoubtedly Amazon’s FBA program is a pool of healthy competitors. You won’t be able to take sole advantage of FBA. There are many other businesses selling the same products as you. So, it might be difficult to compete with experienced entrepreneurs.
3. No Profits are Guaranteed
You have to be careful while developing the product mix that you wish to sell because it is unlikely that every product will generate profits for you.
4. Shipping Problems
There is no chance on Earth that Amazon’s FBA program will deliver flammable products.
5. Blind Dependency
There is nothing you can do if Amazon decides to change its regulations and remove your store from its platform. All your hard work will go to waste.
6. No Direct Contact with Customers
Amazon will have a hold over the entire record of your clientele and unfortunately, you won’t. What if, down the road, you wish to sell the same products to the same customers? Oops! Sorry, but you can’t do that because you are too dependent on Amazon.
7. Basic Needs You won’t be able to start your online business with FBA unless you have secured a decent amount of capital. Also, you need to pay a fixed amount to Amazon in order to avail of their services.