The online retail market is growing exponentially as the ongoing pandemic caused widespread brick-and-mortar closures and stay-at-home orders, yet consequently opened the door for more people to start their own business and do so entirely online. The supplements market is booming as more people than ever are focusing on their health and wellness, and anyone that wants a piece of the pie can easily do so with minimal effort by selling their products on Amazon.
Growth of E-Commerce Marketplace
How significant is the overall online marketplace right now? The numbers speak for themselves. E-commerce sales in the second quarter of 2020 accounted for 16.1 percent of total sales. The second quarter 2020 e-commerce estimate increased more than 44 percent from the second quarter of 2019 while total retail sales decreased 3.4 percent in the same period, according to the U.S. Census Bureau.
During the height of the COVID-19 pandemic, consumers spent more than $200.72 billion online with U.S. retailers—an increase of more than 44% for the same quarter the year before, according to a report recently released (.pdf) by the U.S. Department of Commerce.
The second quarter of 2020 marked the highest year-over-year growth for any recorded second quarter and the second-highest rate of any quarter or year overall going back to data from 1999.
What is Amazon FBA?
Amazon FBA stands for “Fulfillment By Amazon.” If you enroll in the FBA program, you can automate order fulfillment by taking advantage of Amazon’s advanced shipping and fulfillment services and earn more sales from Amazon’s coveted Prime customers.
About half of all sales on Amazon come from third-party sellers and out of the top 10,000 sellers, 66 percent of them use FBA.
How Amazon FBA works:
You send your products to Amazon.
They store them in their warehouses.
When a customer orders one of your products, Amazon picks, packs, ships and tracks the order for you.
They also handle returns and refunds. Once the customer receives your product, Amazon follows up to make sure they’re satisfied with the shipment. As for any feedback you receive on your product listing, it’s up to you to respond and take action.
You get paid: Every two weeks, Amazon totals up all your sales, deducts your seller fees and deposits your profits directly into your bank account.
Amazon charges both storage fees and fulfillment fees to complete this process. However, those fees include Amazon’s 24/7 customer service, the cost of shipping goods to customers and access to one of the largest and most advanced fulfillment networks in the world.
Why Amazon FBA Matters
Amazon has more than 300 million active customers, with 90 million Prime subscribers in the United States. Brands that are available specifically to Prime buyers are those that utilize FBA.
Research proves that Prime customers spend more money with Amazon. The average customer spends $700 per year on Amazon, while Prime customers spend roughly $1,300 per year. This means that if you use Amazon FBA you are more visible to Prime buyers and you can ultimately make more money.
Why You Should Sell on Amazon FBA
Choosing to sell on Amazon FBA allows entrepreneurs and business owners, small or large, the freedom to concentrate on growing their brand, executing their business strategy, and attend to any other matters that require detailed time and attention.
One of the biggest advantages of Amazon FBA is the “hands-off” approach to selling and shipping—which accounts for a majority of the time spent running a business.
When you start selling on Amazon, you become part of a retail destination that’s home to sellers of all kinds, from Fortune 500 organizations to artisan vendors who make handcrafted goods. They all sell on Amazon for a reason: to reach the hundreds of millions of customers who visit Amazon to shop.
Since third-party sellers joined Amazon in 1999, they’ve grown to account for 58% of Amazon sales. Third-party sales on Amazon are growing at 52% a year—compared to 25% for first-party sales by Amazon.
Benefits of a Contract Manufacturing Partner
1. Cost Savings:
One of the main reasons to consider a contract manufacturing partner is saving money! Some industries are able to cut production costs by more than 30 percent. This type of savings is possible since a contract manufacturer, like Gummi World, already has the facility, equipment, technology, and professionally trained, hand-picked staff to handle your production needs. Since all of this is conducted within the same building while focusing on efficiency and quality you save a lot of money.
2. Scaled Production:
Aside from saving money, this is likely the second biggest reason business owners consider contract manufacturing. Scaling your production is the golden rule of the manufacturing industry. What works well for your business now may not result in the same success on a larger scale. This is not a concern to worry about with contract manufacturing. A supplement manufacturer such as Gummi World takes pride in a production schedule that fits your needs by any means necessary. We are ready at any point in time to modify batch sizes, reduce lead times, all while maintaining good manufacturing practices and efficiency standards.
3. Resource Management:
Another benefit is the ability to focus your resources where they are needed most. Similar to how Amazon FBA frees up a huge chunk of your time by handling order-fulfillment, a contract manufacturing partner handling the production of your product gives you more time to focus on your business. With contract manufacturing, you are able to focus on growing your business, brand, image, and more.
4. Quality Control:
As a business owner, the quality of your products is your primary concern and you likely have your own set of standards that must be met. However, with a quality contract manufacturer, you get an extra set of trained eyes on your manufacturing process. With the Gummi World Diamond Team, this means even more expertise and knowledge that allows for twice the brainpower, oversight, and handling that goes into quality control compared to if you were the only one handling the process. This means your product is not only made more efficiently, it is of higher quality.
Gummi World Contract Manufacturing and Amazon FBA
At Gummi World we focus on executing vitamins and supplements gummies
to perfection. We want to partner with you to develop a unique, brand
specific gummi. With reasonable minimum order quantities and the
reliability of being placed into a production schedule that works for you, we're
a full solution facility helping you from recipe development all the way to
product fulfillment.
Let us focus on fulfilling a tasty and healthy product that is customized to
your specifications while you grow your business and your brand.
Contact Us: Call our Partner Satisfaction Expert at 830-358-9770 today or schedule a time online.
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