5 Reasons Amazon FBA Is Worth It In 2022
In 2021, U.S. eCommerce sales surged by 14.2% from the previous year, reaching $870.8 billion. Of those total sales, 41% of all transactions took place on Amazon. To put that market share dominance into perspective, the next closest competitor, Walmart, accounted for just 6% of all eCommerce sales.
Within the digital eCommerce marketplace, Amazon reigns supreme. And for sellers, it’s the place to be. Not just because of its massive user base but also because of the benefits afforded by Amazon’s end-to-end Fulfillment by Amazon (FBA) services.
Given 85% of Amazon’s biggest sellers use it, is Amazon FBA worth it for emerging eCommerce brands?
In a word, yes. Today, we’ll give you five reasons why FBA is worth every penny.
1) The Majority of Consumers Rely on Amazon for ECommerce
As noted, Amazon nearly controls half of the eCommerce marketplace. It’s become so pervasive that it has changed consumer search and shopping behavior.
It’s become the go-to hub.
Instead of using Google to conduct product research, as of 2021, 71% of consumers will turn directly to Amazon to search for prices, reviews, or make a purchase outright.
That’s because consumers have become conditioned by the convenience and centrality Amazon provides. They know that doing product research and finding competitive price points is easy on Amazon. And it’s made even more so when the third-party sellers have great reviews, competitive pricing, and reliable fulfillment service.
Since Amazon is projected to keep expanding its market share, it only makes sense for businesses to consider creating an Amazon business and using FBA as a way to increase their brand visibility and future growth.
2) Built-in Seller Fulfilled Prime Tools and Features Help with Faster Delivery
Still wondering if getting started as an Amazon FBA business is worth it for you?
Now that we know the Amazon marketplace currently reigns at the top of eCommerce, it’s also important to point out how an FBA business for sale model helps brands grow and scale. As an Amazon FBA business, not only will your Amazon fulfillment needs be taken care of, but your customers are able to receive the benefits that only an Amazon store can offer, such as same-day and two-day shipping with an Amazon Prime membership.
The Amazon platform recently updated its requirements for eligibility for their Seller Fulfilled Prime (SFP) program, which went into effect on February 1, 2021. The program is designed to help sellers meet customer demand efficiently and with greater satisfaction while maintaining the credibility of the site and attracting even more consumers to use Amazon as their first-stop eCommerce shop. Some of these tools include:
- Shipping Region Automaton. This feature sets up delivery locations for one-day and two-day delivery based on your Amazon warehouse locations and preferred shipping services.
- Delivery Speed Report. Analytics are a valuable part of the FBA seller network. This report allows you to evaluate which SKUs are holding up delivery speeds and which tools need to be applied to ensure faster delivery.
- Automatic Product Classification. Amazon automatically lists your products as standard or oversize based on their weight and dimensions.
These are a few of the many features available through the Amazon FBA seller dashboard to maximize your delivery times and see where there may be delays to the flow. This helps to prevent customer dissatisfaction and alerts you to how certain products may be affecting your overall delivery model and business.
Instant gratification is part of what customers pay for - getting their Amazon purchases as quickly as possible.
It comes down to convenience. By building trust through Amazon's extensive customer reviews and eliminating fees like shipping, selling products becomes increasingly seamless for you and boosts customer satisfaction at the same time.
We wouldn’t be surprised if, in the very near future, a two-day delivery window will seem slow compared to the one-day and same-day shipping options that are quickly becoming the standard.
3) Shipping and Delivery All in One Place
Maintaining a successful online business requires several moving parts, which are often handled on multiple platforms. However, Amazon FBA allows you to relinquish responsibility for shipping, delivery, and even part of your marketing. Everything you need for your store can be handled through your account. This allows you to focus efforts on product creation and/or sourcing, inventory supply, and building your brand through cross-channel promotion.
Want to know some insider tips for an Amazon FBA seller?In general, an FBA business setup works best if you have smaller products that sell quickly, especially if you are a new seller. For many shoppers, it requires a build-up of trust through customer reviews and brand recognition before they’ll become loyal to your store or invest in a bigger-ticket item.
To get started, register an account and list what products you’re selling. Amazon Seller Central will help you prepare your products before you ship them to the nearest Amazon warehouse.
This requires attention to detail, as each product requires a unique code, description, and other requirements laid out by Amazon in order to track your products accurately.
Once Amazon receives your items, your products are stored until purchase, at which time Amazon also takes care of packaging and shipping your products, in addition to handling customer service requests regarding product and delivery satisfaction.
4) Zero Outside Marketing Required
Most startups will have to invest a significant percentage of their budget into marketing. But with FBA, there’s no outside marketing needed.
How do you use the FBA marketing tools?
From your Amazon seller account, you can set up marketing and Amazon seller tools to start promoting your products. This includes
- Sponsored products
- Sponsored brands
- Sponsored displays
Each of these offerings has built-in templates and dynamic widgets to help you build customized advertising to get your product in front of more people and reach a targeted audience.
Through Amazon advertising, you set your own budget for the maximum amount you want to spend per day on your ads, which gives you control over your monthly costs and allows you to review your return on investment easily.
5) Clear Path for Scalability
Once you have the basics in place for running an Amazon FBA business, the next step is fostering growth.
For that, Amazon FBA is 100% worth it, as long as you utilize all of the tools and techniques at your disposal on a consistent, strategic basis. In addition to sponsored posts, Amazon FBA also enables you to:
- Promote deals and coupons to help grow your business
- Optimize the current products you have based on analytics
- Create strategies regarding brand promotion and sales during certain high seasons.
But like with any business, the work you put into it can make all the difference in how quickly and efficiently you grow.
Additionally, once you put tools to work through your FBA dashboard, you will have time to expand your presence through other channels in order to reach both current and potential Amazon customers. By no longer having to focus on fulfillment, Amazon FBA allows sellers more bandwidth to focus on other important parts of the business.
For example, when you focus on brand alignment and product familiarity, you will gain more popularity across the Amazon platform and create more repeat customers.
The Staying Power of Amazon FBA
Even before the eCommerce surge caused by the pandemic, the number of people who relied upon online shopping was steadily increasing. And now, shopping online for everyday products has become second nature thanks to the speed, convenience, and savings Amazon provides. Especially for an Amazon prime member or Amazon business prime member.
While there’s still room left for in-store shopping experiences, the majority of people shop online in some capacity, even if they occasionally step foot inside a brick-and-mortar business.
Entering the market with products already in high demand puts you at the forefront of potential success. By building your brand and inventory and staying consistent with optimization and product feedback, you’ll make launching or continuing your place among Amazon FBA sellers worthwhile into 2022 and beyond.
And going forward, there will be plenty of opportunities to gain further competitive advantage as Amazon continues to roll out new FBA features and functionalities.
Once you’ve established the inner workings of creating a profitable business selling through Amazon FBA, you can duplicate the process and apply it to other ventures and product lines.
But, if you already have an Amazon FBA business, it could also be time to consider selling your Amazon FBA business.
Forum Brands was created to reward e-commerce entrepreneurs that have established a profitable business and wish to sell for immediate cash-out. This money can then go toward future business ideas, investments, and build upon the success you’ve already achieved online.
Whether you’re just getting started in the world of Amazon FBA or you’re an experienced business owner that wants to expand your options, eCommerce is here to stay and will only continue to grow with time. How you decide to use it to your advantage is up to you.
U.S. Census Bureau. Quarterly Retail E-Commerce Sales.
Statista. Market share of leading retail e-commerce companies in the United States as of October 2021. https://www.statista.com/statistics/274255/market-share-of-the-leading-retailers-in-us-e-commerce/
Market Insights. Top Amazon trends and predictions for 2022. https://www.insiderintelligence.com/insights/amazon-ecommerce-trends/
Feedvisor. The 2021 Amazon Consumer Behavior Report. https://s3.amazonaws.com/media.mediapost.com/uploads/2021_Consumer_Behavior_Report.pdf