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Amazon FBA vs self-storage for online businesses

Written on: August 26th, 2021

Did you know that Canada’s E-commerce market is expected to surpass 33 billion US dollars by 2024? It is one of the fastest-growing industries with no signs of slowing down. In fact, Covid-19 has contributed to the massive growth of E-commerce businesses. As a self-storage company offering business storage units in Calgary, we have a finger on the pulse of current trends and see the opportunity to help online businesses with their self-fulfillment needs.

One of the largest E-commerce platforms is Amazon FBA (Fulfillment by Amazon), which allows sellers to simplify the process of storing and shipping items right from Amazon warehouses and completed by Amazon employees. A common question we receive is the difference between this method and using self-storage for online businesses. Before we can compare the two, let’s take a look at how Amazon FBA works.

How does Amazon FBA work?

Fulfillment by Amazon allows third-party sellers to go through the process of selling items as if they were done by Amazon themselves. Here’s a simple example of the activities involved with this method:

  1. You or the manufacturer sends your items to an Amazon fulfillment center.
  2. Amazon warehouse employees receive your items, sort, and store your products with a tracking number.
  3. When you receive a customer order, a warehouse employee packs and ships the item.

Some of the benefits of using Amazon FBA are that an Amazon employee packs and ships your orders, handle customer questions, and your inventory is automatically updated. However, many third-party sellers are moving away from Amazon FBA and looking for a business storage unit solution because of the rising costs.

The disadvantages of Amazon FBA

With increasing popularity comes more competition and higher costs to store and ship your products using Amazon’s FBA system. Because shipping and packaging are managed by Amazon, sellers have very little control over personalizing packages for loyal customers and branding – factors that are very important when growing a business. The most significant disadvantage here is the complicated fees, which include:

  • Different monthly storage fees between January to September and October to December.
  • Fulfillment fees for each unit you sell.
  • Additional shipping fees for large and oversized items per pound.
  • Removal order fees
  • Disposal order fees
  • FBA Label Service fees
  • Long-term storage fees for items sitting in storage for more than a year.

Why self-storage for your online business?

Using business storage units in Calgary for your online business allows you to be the decision-maker and manage the way your products are packed and shipped. While Amazon FBA may benefit some third-party sellers, self-fulfillment gives you the freedom to personalize packages for your loyal customers, manage your inventory, and keep costs down. Further, a self-storage company like Alberta Storage Place offers receiving, labeling, and shipping services to help with your E-commerce business operations.

Some of the advantages of self-storage units for E-commerce includes:

  • A more cost-effective process without complicated storage fees.
  • Your packaging can be on-brand and customized.
  • You have control over receiving customer data, such as their preferences, buying habits, and search behavior – Amazon FBA doesn’t allow you to do this.
  • You have access to your business storage unit in case you need to take your products or for quality control and inventory.
  • Frees up home or garage space for home-based E-commerce businesses.
  • Eliminates having couriers and delivery services dropping packages at your front door, exposing these items to porch pirates.
  • Storing your inventory away from your home is a good business practice in the event of disaster recovery should your house suffers a flood or fire.

Unlike Amazon FBA, you also have the option of using your storage unit for other business needs, including file storage. Furthermore, your inventory is separated from other vendor’s products in an individual storage locker rather than a separate shelf in a warehouse. In the ever-evolving E-commerce world, there is always a better way to do things and business storage units may just be the solution you’re looking for!

 

Alberta Storage Place offers a unique variety of unit sizes at competitive storage rates to suit your needs.

Check out Alberta Storage Place’s Monthly storage special deals!

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