Fulfillment by Amazon Program

Did you know you can build an e-commerce website and have Amazon store your inventory and fulfill your shipments? A friend and I were talking about a new product he is developing, and when we started talking about distribution, he mentioned that one option he is considering is the Amazon Fulfillment Program.

With this program, customers can store their inventory at one of Amazon’s fulfillment centers. You can then either sell your products directly on Amazon.com where customers can purchase them along with other Amazon products, or you can sell them directly on your own website and simply use Amazon for inventory fulfillment. Instead of paying for storage space or filling your home/business with inventory, Amazon will do it for you, likely for a smaller cost than you could do it on your own.

Living in an apartment in New York City, I can’t exactly store much inventory of any kind. Likewise, it would be a costly pain in the neck to deal with shipping and other inventory control if I used a storage facility. This seems like a great concept for small business owners.

As I’ve discussed with BumperProtectors.com (now developed using an Epik site), ultimately it would be great to be able to sell bumper protectors. Since I have no experience with inventory and have no space for it either, Amazon fulfillment would be something interesting to explore if I ever want to earn real money.

Comments (11)

Jason

September 9th, 2010 at 2:42 pm

I noticed another using this option with a .us domain. They seem to be making money. I own the .com and the .net.

Have you received good results with BumperProtectors.com? Would you consider moving over to the Amazon platform to keep more of the revenue?

Mark

September 9th, 2010 at 3:38 pm

Something you should be aware of is that, at leaset when I looked into it for a business I am developing, they send your products in an Amazon branded box. Probalby not a big deal, but not ideal either.

Michael

September 9th, 2010 at 3:49 pm

The main problem with Amazon is their extremely low payouts. I tried them on many sites and in different niches and adsense outperforms it even in very targeted e-commerce niches.
The best way is to find a separate dropshipping company to work with.

Elliot

September 9th, 2010 at 3:58 pm

@ Michael

With this program, the domain/store owner only pays for shipping/fulfillment costs rather than getting commissions.

Bonkers

September 9th, 2010 at 5:01 pm

Amazon has had this service for many years.

Elliot

September 9th, 2010 at 8:01 pm

@ Mark

That’s good to know.

DPS

September 9th, 2010 at 10:06 pm

Looks like a good concept for small biz owners. I am thinking of using EPIK for some of my product portals – domain names. Is it possible for you to share the revenue numbers for BumperProtectors.com here publicly?

Elliot

September 9th, 2010 at 10:08 pm

@ DPS

You can see the stats at http://www.bumperprotectors.com/stats

All Epik sites have /stats enabled.

brian k

September 9th, 2010 at 11:11 pm

Stay away from Amazon.com.
If you have any success with them they will become a competitor to you.
I have seen it happen. You build a good steady biz and then amazon starts to sell against you.

Laptop Repair Guy

September 10th, 2010 at 8:07 pm

Amazon fulfillment you still have to:
1) buy the products from a vendor
2) receive at your location
3) package them up the way Amazon requires for incoming shipments
4) send them to Amazon warehouse
5) process the orders from your website
6) send the fulfillment order to amazon
7) watch weekly reports from amazon like a hawk — basically audit the numbers and report problems — you might have 6 of item xxx one week with them and the next week the report shows 4, even with no sales
follow up on the problems you report to make sure they fix them or credit you
9) deal with the ensuring sale tax complications of having no control of what states amazon might decide to warehouse your product

Amazon does have advantages. They have decent freight rates is the main one (but of course they keep most of the savings for themselves and charge you closer to retail freight rates).

Second advantage is if you have a high volume selling item where you can send them hundreds at a time, they will distribute them to warehouses across the country and your customers will get them faster. Also, amazon will save money on shipping, but they keep those savings (so if you have high volume item, other options can be better making this an advantage only for special cases).

paul

September 12th, 2010 at 10:29 am