Sunday, February 03, 2008

I'm Sold on FBA - Apparently So is Amazon

In January, I posted about my experience using Amazon FBA and the post got a lot of activity. Since that time, it has become clear to me that Amazon is making FBA (Fulfillment by Amazon) a huge part of their business going forward. All of the messaging I have been hearing or reading is that Amazon FBA is the direction they want to take their 3P business.

According to Amazon, they shipped over 500,000 pieces for their FBA customers in the 4th quarter and during the Q4 earnings call the CFO Thomas Szkutak

"We have a strategy that we are very, very focused on. We’re not changing it. We like our strategy and we are just going to stay heads down. One of the great examples I can give you for trying to drive sales for sellers is the combination of fulfillment by Amazon and Amazon Prime.

I talked about this just a couple of minutes ago but it’s a very good combination for sellers and as sellers continue to sign up for fulfillment by Amazon and as our buyer customers continue to sign up for Amazon Prime, that combination is going to be very good for our buyer customers and it’s going to be very good for our seller customers as well, and we love that. "

Amazon is committed to growing the Prime program and key to that is increasing the selection of product available for Prime customers. Currently, the majority of products available from 3P sellers is shipped by the merchant and is not available for Prime customers to purchase. As sellers increase the product selection available in FBA the benefit to Prime customers grows.

FBA and Prime are linked together in Amazon's plan for the future, so they are going to encourage 3P sellers to use FBA to increase their selection. IMO, if you are currently selling on Amazon or considering it you might want to add FBA to your plans. BTW, Amazon is currently running a promo for Prime (free for a month) you might want to take a look, maybe you will buy some of my product.


Nikkicute said...

What do you mean by "the majority of products available from 3P sellers is shipped by the merchant and is not available for Prime customers to purchase?"

If I join the Prime program certain products won't be available to me? I don't like that sound of that?!!

Randy Smythe said...

NikkiCute, If you join the Prime Program you can still purchase the other products but you would be charged the S&H amount for each of them and what is the point of paying the annual prime fee if you have to pay S&H

Since I wrote this blog post a long time ago many 3P sellers have joined the FBA program so much of their best product is available for Prime members.