

Ask HN: Is Fulfillment by Amazon worth it just to target Prime members? - p_k

My company already works with a fulfillment company and we're already a seller on Amazon.<p>I'm considering of using Fulfillment by Amazon just to target Prime members for our Amazon listings. Not surprisingly, Prime members spend more.<p>Was anyone in the same boat?<p>Was there any significant improvements in your profits over selling as a regular seller on Amazon?
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robdoherty2
I used to work for an Amazon merchant doing roughly $2 million /year in
sales-- not big, but big enough that this was not a side business.

In our case, FBA (Fulfillment by Amazon) was useful for a few things, but
increased profit was not one of them.

On the contrary, we used FBA to sell 'hot' items quickly, which in turn led to
boosts of higher customer feedback for our merchant account.

Ultimately though, the increased traffic you might get with your FBA items is
seriously offset by the increased competition you will get from other
merchants and even Amazon itself. And After Amazon takes the cut for doing the
fulfillment, you are left with pennies per sale in profit if you are lucky
enough to get the volume sales.

Another unexpected negative aspect of using FBA is that occasionally Amazon
fulfillment centers claim that there is "something wrong" with your goods or
they are "damaged in shipment" and they refuse to store them or ship them. You
have to eat the cost in these cases.

I think FBA can be useful if you are a merchant with a specific product line
that won't experience direct competition, or if you are a small merchant
trying to build some traction.

On a side note, I think FBA is a brilliant win-win strategy for Amazon: they
get paid for storing stuff whether it sells or not, and they get merchants to
test out product lines at ZERO cost to themselves.

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27182818284
I was shocked, after signing up for Prime's trial, how it instantly affected
my buying. Nowadays, I rarely do items that don't have the Prime logo next to
them. My friends are the same way. There is a big psychological component to
it that sometimes overrides price outright. I can't explain it well. It is
like in addition to knowing shipping will be free and quick, the Prime logo
comforts a little bit. Like you trust the order more than if it is sold by
FlyByNight LLC, regardless of whether or not it really is that company in the
end.

~~~
robdoherty2
I'll add to this by saying that 99/100 purchases I make on Amazon must be
Amazon Prime available-- simply because I've been burned by 3rd party
merchants.

Amazon Prime is certainly best for consumers-- but for merchants it is very
difficult to turn a profit.

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Lasher
Strongly recommend fulfillment by Amazon if you can make the numbers work. As
a long time Prime member the only time I will ever consider non-prime is when
there are no 'Prime' options available, or there is a massive cost differences
which is rare other than on very hard to find product.

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srdev
In my case, items fulfilled by Amazon get my first look and a small price
premium, due to convenience in shipping. Just another data point from the
customer side.

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livestyle
If your a MFG ..go for it...if not be very careful, I am aware of more than
one occassion when the big A will cut out the middle man if they have a hot
seller.

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p_k
We are the original manufacturer of a unique product. Based on the answers
here, I think we'll go ahead with FbA.

Thanks guys!

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whichdan
Just adding my 2c, even before Prime, I would gladly pay a few dollars more
for FbA because I knew the shipping dates would be reliable and it would count
toward the $25 free shipping minimum.

