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Selling on Amazon FBA/FBM in 2025: Is it still worth it ? 10 things to consider #Amazon #ecommerce

Introduction

The world of e-commerce is rapidly changing, and Amazon has been a dominant force in this industry for years. As multi-channel sellers who have navigated the complexities of Amazon, eBay, and our own online store for the past five years, we want to share our insights and experience. In this article, we'll delve into the realities of selling on Amazon in 2025, examining whether it still holds its reputation as the “golden goose” for sellers.

1. Price Setting: The Balancing Act

Determining the right price for your product on Amazon is crucial. You must consider platform fees, the cost of returns, and competition within the buy box. To assist with this, we’ve created a spreadsheet template (available via link in the description) indicating where to input your data regarding purchase price, VAT, shipping costs, Amazon referral fees, FBA fees, returns percentage, and your desired profit margin.

2. The Return Policy Dilemma

Returns are a significant concern when selling on Amazon. With Amazon's customer-friendly return policy, sellers often face high return rates. Studies indicate that return percentages can fluctuate between 5%-40% depending on the product category. High return rates not only affect revenue but also lead to additional costs associated with logistics and inventory management.

3. Cash Flow and Payment Delays

Although making sales is exciting, sellers need to manage cash flow carefully. Amazon pays sellers biweekly, which means you'll have to wait to receive your funds. Moreover, you'll only receive a portion of the revenue, as Amazon takes a significant cut, further complicating cash flow management.

4. Innovation and Increasing Fees

Amazon continuously evolves, introducing new features and fee structures that can challenge sellers. The introduction of promotional rebates, compliance regulations, and a dynamic fee structure means that sellers need to stay updated with changes that can affect profit margins.

5. Risks of Account Suspension

Account suspension is a genuine risk for many Amazon sellers. Violating policies, even unintentionally, can result in account locks, with Amazon holding funds in limbo. It’s essential to monitor your account health regularly to avoid unpleasant surprises.

6. The Buy Box Challenge

Winning the Buy Box can be challenging, especially for smaller sellers. Amazon often prioritizes larger sellers or its products, making it harder for newcomers to gain visibility. Understanding how to optimize listings and pricing strategies can enhance your chances.

7. Alternatives to Amazon

Many sellers are exploring alternatives to Amazon that offer more freedom and control. eBay, Etsy, and Walmart Marketplace can be user-friendly but come with limitations compared to launching your own online store using platforms like Shopify or WooCommerce. Creating a self-hosted online store enables complete control over design, functionality, and cash flow.

8. FBA vs. FBM: Which is Better?

When choosing between Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM), consider your business strategy and logistics capabilities. FBA provides convenience but comes with associated fees, while FBM gives you more control over shipping but requires more effort on your part.

9. Customer Communication and Emails

Sellers receive numerous messages from Amazon that require action. Managing these messages can become a full-time job, indicating that selling on Amazon is far from passive income. Proper communication and timely compliance with Amazon’s requests are necessary to maintain account health.

10. The Future of Selling on Amazon

As we head towards 2025, sellers must adapt to evolving market conditions, increased competition, and changing consumer behaviors. Embracing multi-channel selling while being equipped with the right tools is vital for success in this dynamic environment.

Keywords

  • Amazon
  • eCommerce
  • FBA (Fulfillment by Amazon)
  • FBM (Fulfillment by Merchant)
  • Buy Box
  • Cash Flow
  • Pricing Strategy
  • Returns
  • Account Suspension
  • Alternatives

FAQ

1. Is selling on Amazon still profitable in 2025?
Yes, selling on Amazon can still be profitable, but it requires careful planning around pricing, fees, and managing returns.

2. What should I consider before starting to sell on Amazon?
Consider factors such as pricing strategies, return rates, Amazon fees, cash flow management, and how to effectively win the Buy Box.

3. What are the risks of selling on Amazon?
Risks include account suspension, high return rates, and competing against larger sellers for visibility and sales.

4. Are there alternatives to Amazon for selling products?
Yes, alternatives include eBay, Etsy, Walmart Marketplace, and creating a self-hosted online store using platforms like Shopify or WooCommerce.

5. How can I improve my chances of winning the Buy Box?
To win the Buy Box, focus on competitive pricing, excellent seller performance metrics, and optimizing your product listings.

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