FBA Sellers Get 50% Fewer Negatives
by Jonathan Tombes, on June 16, 2014
Sellers who participate in the Fulfillment by Amazon (FBA) program incur a range of costs but also realize numerous benefits, including better seller feedback. The primary gain, of course, is having Amazon warehouse as well as pick, pack and ship your orders.
Most sellers also see more sales. According to an Amazon survey cited in Jeff Bezos’s 2014 letter to shareholders, after joining FBA, three of four sellers saw a 20 percent jump in unit sales after joining FBA.
Another benefit is better feedback. This is logically related to more sales. (You don’t grow sales with worse feedback.) But up until recently there has been little non-anecdotal evidence supporting that claim. Now an internal eComEngine study has shed some light on the matter.
Negative Feedback 2x as Likely on MFN Orders
Since introducing FeedbackFive more than seven years ago, eComEngine has helped the Amazon seller community harvest many millions of positive feedbacks. A tiny percentage of those requests has led to negative and neutral feedback.
By dividing that smaller multi-year data set by FBA or non-FBA status and then segmenting the population by rating, we were able to address this test question: Are FBA or merchant-fulfilled network (MFN) orders more likely to receive one, two or three stars?
Broken out, the results show that an MFN order is more than twice as likely to receive a one-star rating and 75 percent more likely to receive a two-star rating. As for neutral feedback, MFN orders are about 60 percent more likely to receive a three-star rating. (See chart.)
Explanation and Takeaways
The reasons why are not hard to find, although a seller’s experience may be deceptive. One seller-turned author, Peter Valley, initially thought that Prime subscribers would drive down his ratings. But over time, his view changed.
“Now that I have been with FBA for over two years,” Valley writes in Feedback Mastery, “I can say that selling with FBA prevents the vast majority of negative feedback, and your feedback score should in fact go up after making the switch, not down.”
The bottom line is that FBA minimizes leading causes of negative feedback. If that were not the case, of course, it is unlikely that Amazon would take responsibility for any negative feedback related to fulfillment or customer service on FBA orders. (And if we factored in the relative ease of negative feedback removal between FBA and MFN orders, we believe our analysis would reveal and even higher advantage for FBA.)
So what’s the takeaway? Not that everyone should adopt FBA. The program has its pros and cons, and each seller should weigh the two, including FBA’s financial impact on particular products. But least as seen in the population we studied in this initial study, better feedback is a definite ‘pro.’
Over a span of years, FBA orders proved admirably resistant to negative and neutral feedback, and should continue to do so going forward. (A future study will examine FBA’s impact on positive feedback.)
[Editor’s note: an earlier version of this article was published in The Online Seller's News, May 2014, vol. 14, issue 9.]