Fulfillment by Amazon, also known as FBA, is a program that allows the work involved with selling your items to be taken care of by Amazon. By allowing the fulfillment centers of Amazon to store your products and handle them after a sale, you will be removing much of the responsibility from your business. Additionally, by affiliating your products with the FBA program, you will build trust among your customers and any potential customers. However, there are a few reasons why you may not want to utilize the Fulfillment by Amazon program.
It is difficult to have all of your items shipped to a single fulfillment center that is closest to you. Instead, the Shipment Creation tool will usually have you ship your items to numerous fulfillment centers; increasing your shipping costs. This also can create confusion as you will need to keep track of multiple shipping points, rather than one.
According to Ampersand Accounting, fulfillment centers generate sales tax nexus and therefore need to pay the state's sales tax. Although not every state has this requirement, if your products are stored in multiple fulfillment centers across multiple states, this can create a tricky situation for your business as you will have to pay numerous taxes.
The variety of details and descriptions for a single product can affect the way your product ranks on a page; especially if multiple sellers are using countless ways to describe the same thing. As your page rank goes down, your inventory will begin to sit for longer, collecting storage fees along the way.
The many issues with Fulfillment by Amazon create many additional costs and fees for a business. However, there are many alternatives to FBA; Specialty Fulfillment offers an excellent service that is very competitive to FBA. There is no need for a business to rely solely on FBA with the immense amount of resources that are available today.