Fulfillment by Amazon and Etsy.com: A Closer Look at Making Money on FBA and Etsy
What is Amazon’s Fulfillment by Amazon?
You sell it, they ship it. With Fulfillment by Amazon (FBA), you store your products in Amazon’s fulfillment centers, and they do the packing and the shipping, as well as the customer service for these products. Additionally, products sold can be eligible for Amazon Prime Free Two-Day Shipping, Free Shipping, and other benefits provided directly by Amazon.
When you register for an Amazon.com seller account, you can also enable FBA or Fulfillment by Amazon for products you list to be seen on Amazon.ca and Amazon.com.mx, allowing you to sell on Amazon’s marketplaces in Canada and Mexico. This way you can reach even more customers across North America who have learned to trust Amazon’s reliability and customer service. Listings are displayed with the Prime logo, so customers know that Amazon handles packing, delivery, customer service and returns.
You can even fulfill orders from other channels, with Multi-Channel Fulfillment, you can fulfill orders from other sales channels using your inventory stored in Amazon’s fulfillment centers. And, you can manage your inventory through an online user interface.
As far as costs go, you are charged for storage space and the orders they fulfill. The cost of shipping is included in your fees, with no extra charge for Amazon Prime FREE Two-Day Shipping and FREE Shipping on eligible orders. Fees for optional services may apply.
Once you have products to sell you’ll need to check whether your preferred product is within one of the categories requiring approval. Then, upload them to Amazon, box them up and ship them to an Amazon distribution center.
One thing to keep in mind, your inventory may not all go to one place but might need to be separated among more than one of Amazon’s distribution centers. Fortunately, the FBA platform allows you to pause shipments to wait till you have multiple items ready for the same location. This will save you on shipping costs. You can save even more if you take advantage of Amazon’s partnership with UPS.
Once the items arrive and are scanned in at the distribution center, they’re live on Amazon. If items don’t sell within the pre-set time period, you can either pay storage fees or have them returned to you at your expense.
Once you ship your box off to Amazon, you’re no longer in control of what happens to your items, but you are responsible for them. Plan for returned or damaged items. Amazon’s 100% satisfaction guarantee extends to your items, giving your customers additional peace of mind. So, when considering pricing it’s suggested that you allow for 3-5% of items to come back that won’t be able to be resold.
What is Etsy?
Etsy’s rightful claim to fame comes from its limiting products to only handmade or vintage items. Even with this “restriction”, it can show more than 16 million buyers and 1.9 million businesses worldwide, making it a good opportunity for sellers to gain global exposure and make a profit.
And, not only is Etsy a great setting for artists and craftspeople to make money doing what they love, it also provides an environment where creative-minded people can interact and collaborate. Etsy is definitely getting bigger every day.
After your shop name has been approved, you can get started listing your items for sale. After uploading photos of your products, you will then be able to edit thumbnails and give your listing a title and description. Selection of the appropriate categories and subcategories help determine what section of your shop to place a product. Etsy allows each shop a limit of 10 custom sections.
Fulfillment by Amazon Pros
- Enormous Customer Base. As one of the largest online retailers, Amazon’s users are looking to shop.
- Credibility and Trust. Customers are often more comfortable purchasing from Amazon than from an individual’s e-commerce site they aren’t familiar with.
- Excellent Support. Everything from inventory tracking to tax collection to credit card processing is already set up with Amazon’s platform. Additionally, since you ship your product in bulk to Amazon’s warehouses, Fulfillment by Amazon handles the shipping, returns and customer service issues. Saving you long hours spent at the Post Office or investing in postage machines at home. This also means that shipping internationally is just as easy as shipping domestically.
- Referrals. Amazon’s built-in algorithms include your product in their “recommended purchases” section found at the bottom of product pages. This means someone could visit Amazon to shop for a product that you don’t sell but still get exposure to your product as a recommended purchase. And, Amazon affiliates will also link buyers to your items through blogs and social media posts.
- Enormous Customer Base. Etsy can boast over 40 million active members who are looking expressly for handcrafted or vintage items
- Easy to Set Up. A seller can quickly set up a store, payment options and generate shipping labels.
- Powerful and Supportive Community. The numerous forums and teams available create a sense of family that supports one another.
Fulfillment by Amazon Cons
- Amazon Fees. Fees start at a minimum of one dollar and can go as high as 25% of the product’s price depending on the calculated listing and fulfillment fees.
- You’re a Commodity. On Amazon, you’re mostly a commodity. This can expose you to other merchants undercutting your prices, plus you’re competing directly with Amazon for any products they sell themselves.
- No Control Over Branding. Unlike on your own site, there are very few options to promote your own brand. Consequently, buyers rarely see who the actual seller is when shopping through Amazon and you are less able to save buyers’ email address to build your client base through newsletters or promotional emails.
- Product Restrictions. Etsy only allows the sale of handmade or vintage products from original artwork and pottery, handmade candles, and jewelry, or vintage clothing no longer available on the open market.
- Fees. There are listing fees and final sale fees on Etsy and via PayPal processing which can add up quickly with multiple listings.
- Little Control Over Branding. Etsy’s platform also limits the amount of personalization a customer can go through a listing, as opposed to having your own e-commerce site. Seller pages all look the same.
- Lots of Competition. Etsy’s marketplace is comprised of specific categories, creating a lot of competition in those categories.
The marketplace for both Amazon.com and Etsy.com are an online shoppers dreams. Once you have the products to sell, then you can start selling. Depending on how much inventory you start out, your numbers will vary. To be successful with Amazon or Etsy, just like any other business, product selection is the key.