Amazon FBA vs E-commerce Store: What Is Your Better Option?

StrategyDriven Managing Your Business Article |E-commerce|Amazon FBA vs E-commerce Store: What Is Your Better Option?Selling online is a fantastic business opportunity. All you really need is an idea and an internet connection and you can start a business. The problem is that there are multiple ways to make this work. With so many choices and options, many people get confused and end up doing nothing.

To make sure that you make the right decision you just have to understand how certain things work. Your two main choices when starting out are to sell your product on Amazon through their Fulfilled By Amazon program or to open your own e-commerce store. In this article, we will go over both scenarios so you can decide for yourself the best route to take.

Your own e-commerce store

In theory, the best way to do business online is to have as much control as possible. If you have your own e-commerce store, you have far more control over the process, and even profits, than if you were to start with FBA.

The reason is that you are using your own website to sell your products. Amazon changes the rules, fees, and even algorithms so often that it makes things difficult for the sellers who have no control. You own your site and can do what you want with it.

In this scenario, you are responsible for fulfillment, but you are able to choose from many fulfillment companies and pick the one that works best for you. If you are early in the process, then you can also just pack and ship everything yourself from your garage until it becomes too much work.

The fees will range quite a bit to do this from the software needed to host your store, to the fulfillment fees. However, there are fees either way and you can keep more of the profits when you have your own store. You also have more responsibilities such as dealing with customer service and returns. You also have to be the one to drive enough traffic to your site to make enough revenue.

Doing FBA

Many people start their online business by selling on Amazon. One of the biggest advantages is that there are millions of people already shopping there every day. This means that you don’t have to drive traffic to your product page. As long as you use the best practices with regards to how you craft your listing then you will get plenty of free traffic to your page.

The other major factor is how hands-off it is. You don’t have to do any shipping, returns, or customer service. Amazon handles all of that. The biggest problem with doing FBA is that you pay a lot of fees. It is not unheard of to pay up to 50% of your revenue in fees to Amazon depending on the product. With how competitive the pricing is there, you have very slim profit margins. Then, there is the fact that Amazon changes their algorithm all the time meaning your product could become invisible in the rankings and sales will plummet.