This is What Amazon FBA Means For Online and Retail Arbitrage

When you are an Amazon seller and Amazon fills and ships your orders, that is called Fulfillment by Amazon (FBA). Since Amazon offers alternative fulfillment options, such as Fulfillment by Merchant (FBM), the shorthand typically used is Amazon FBA, to refer to the Amazon program where you send items to an Amazon warehouse, and they ship items when sold.

Amazon says, “Amazon customers buy roughly 7,400 products per minute from U.S. sellers. Build, grow, and scale your brand with our innovative toolkit: a proven customer experience, rich data insights, cutting-edge advertising & marketing solutions, and world-class logistics with Fulfillment by Amazon (FBA). There is no ceiling—how big do you want to go?”

You can sell via Amazon FBA if you are pursuing arbitrage by buying items at local stores (retail arbitrage) or finding items online (online arbitrage). Either way, you send items in to be sold and shipped from an Amazon warehouse with Amazon FBA. Another advantage of Amazon FBA is Amazon takes care of the customer service side. This frees you up.

Amazon FBA Advantages

  • 24/7 Amazon customer service
  • You don’t have to pack or ship items
  • Fees include fulfillment
  • Your items are already at the warehouse for fast shipping
  • The cost of storing small and lightweight items is low
  • Amazon is warehousing your products, so you don’t have to
  • Discounted shipping rates when items are sent in or out

Amazon FBA Disadvantages

  • It can take extra time for you to get your items active for sale on Amazon
  • Warehouse processing can add a week or two after they’ve been received
  • You don’t have your inventory at hand
  • It adds cost
  • Long-term storage fees if items sit
  • Particular product prep requirements

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