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Pros and cons of selling with Amazon FBA

| Sep 6, 2016 | Buying & Selling Businesses |

Many entrepreneurs in North Carolina are building e-commerce businesses using the Fulfillment by Amazon model. Amazon FBA allows small business owners to ship their products to Amazon warehouses and let Amazon handle the picking, packing and shipping of the products. If customers have a problem or need to return an item, Amazon takes care of the customer support.

There are some obvious benefits to using Amazon FBA such as the elimination of product storage. With the boundless storage capacity in Amazon’s warehouses, business owners who use the FBA service can scale up their inventory numbers and easily grow their businesses. In addition to more space, business owners that use Amazon FBA also have more time. While Amazon handles the customer service and shipping, a business owner can have more time to work on higher-level tasks like marketing and product development.

Amazon FBA was launched in 2006, but it has become extremely popular over the last couple of years. All of the competition from fellow FBA businesses is one of the challenges of owning an FBA business. While all FBA businesses benefit from Amazon’s large customer base, they must compete for prominent placement on the site. Amazon’s complex algorithms determine which products are put in the ‘Buy Box,” and there is no guarantee that a business’ products will not be buried beneath pages and pages of competing products.

Many small business owners use Amazon FBA to reach customers that may not come to their website to purchase products. Amazon FBA can be one part of a larger e-commerce business model and online advertising strategy. A business owner who is thinking about using Amazon FBA for product fulfillment may want to discuss the idea with an attorney. A lawyer may help an entrepreneur who is interested in buying and selling businesses understand the Amazon FBA model.

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