Amazon Statistics
Amazon is a vast platform where buyers can purchase both the company’s products and those of other sellers. If we talk about the past year as a whole, Amazon’s global revenue for this period amounted to almost $410 billion, which is nearly 22% more than in 2021. Net income exceeded $33 billion, which means it grew by more than 54%. According to experts, Amazon’s net profit in the first quarter of 2022 could reach up to $117 billion, potentially ensuring annual growth of up to 8%.
The statistics of visitors to both the site and the mobile application also show a steady increase. So, in June 2021, 2.5 billion buyers were recorded. In the US, for example, Amazon is the most visited site. eBay is in second place with about 885 million visitors. It is followed by Walmart and Home Depot, not with such a visible lag.
As you can see from these facts, Amazon’s popularity and revenue are growing year by year. It means further financial success not only for the company itself but also for its partners. Suppose you are still in doubt about whether to trust your business to such a large intermediary. In that case, you should look at the statistics of direct sales and individual sites of companies in comparison with such giants as Amazon. Even before the pandemic, marketplaces generated more than a quarter of all e-commerce sales, while individual sellers accounted for just 6%. Of course, the demand for a centralized service has grown significantly with the pandemic.
FBA Program Features
Even though Amazon produces a fairly large range of products, it is interested in attracting other sellers. It is what various programs are used for, in particular, Fulfillment by Amazon (FBA). As part of this agreement, you can sell your products on the company’s website. It has its undeniable advantages for small businesses, but at the same time, it is not without its drawbacks.
In addition to participating in the program itself, you can also optimize your business with third-party Amazon seller tools that are available at a bargain price on Riselane.com. With their help, you can work more efficiently with clients, monitor statistics and metrics, and SEO. Such programs and apps are must-have solutions for improving your company’s performance and maximizing profits.
Let’s look at the FBA system in more detail. If you choose to participate in this program, Amazon will take care of many of the labor-intensive tasks:
- order processing;
- packaging of goods and delivery to buyers;
- working with returns.
At the same time, the entire service will be carried out at a high level, as if the company is selling its own products. That is, even if you have a startup, you can take advantage of the benefits that e-commerce giants have, but which you cannot afford yet, such as flexible and developed logistics. However, the FBA program is also suitable for large companies since they do not have to handle a huge number of orders.
How FBA Works
Amazon offers several scenarios for sellers depending on the region, so the detailed process may vary slightly. However, usually from the point of view of a manufacturer, it looks like this:
- You create an FBA account and provide product listings that will be included in the main Amazon catalog.
- You prepare the goods for shipment to the marketplace warehouse (be sure to read the guidelines and requirements) and transfer them to the company.
- After that, Amazon distributes the received goods to different warehouses to ensure fast delivery.
- Customers order your products on the marketplace website or app. The company takes care of all issues related to packaging and delivery.
- Amazon transfers the profits from your sales to your account.
As you can see, your main task is to study the requirements for goods and redirect them to the company’s warehouse. The solution of all other complex issues falls on the marketplace. Of course, Amazon charges a certain fee for providing such a service. The amount of interest largely depends on the volume of sales of your products and the business specifics.
Pros and Cons of FBA
You can see the clear advantages of participating in the FBA program from everything written above. However, it is still worth summarizing this information for ease of understanding. So, joining this system has the following advantages:
- you do not need to think about delivering goods to customers and picking them up in case of a return;
- since your products are stored in Amazon warehouses, you do not need to rent your own premises;
- also, you don’t have to have your own website;
- you do not need any special knowledge or skills to participate in FBA;
- your products will become available internationally;
- all products passing through Amazon warehouses receive the brand labeling, which has a positive effect on customer engagement;
- your goods will become available to buyers within the “Prime” program; that is, you will be able to attract loyal members;
- all this significantly saves your resources.
Perhaps the main disadvantages of participating in FBA are the rather high level of competition on this marketplace and the need to pay various fees (e.g., for monthly storage, fulfillment, and long-term storage). In some cases, if your sales and inventory volumes are pretty high, the percentage can be up to several thousand dollars.
Opt For FBA in 2022
Summarizing everything written above, it is worth saying that participating in Amazon’s FBA is still a worthwhile step towards distributing your products internationally. You can save yourself the headache of shipping and handling returns and focus your attention and resources on more important tasks. Of course, like any business solution, FBA has both pros and cons. Consider all the factors carefully to see if it’s right for you. Please share your experience with the program. What benefits have you experienced?
