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Fulfillment By Amazon Taking Off In San Fernando Valley, Worldwide

Lior Haykeen |
March 25, 2014 | 2:31 p.m. PDT

Staff Reporter

Employees package products to be shipped to an Amazon fulfillment center at a warehouse in Northridge, Calif.
Employees package products to be shipped to an Amazon fulfillment center at a warehouse in Northridge, Calif.
Fulfillment by Amazon sellers have been filling up many home garages and warehouses in the San Fernando Valley in the last three years. 

Fulfillment by Amazon, or FBA, is a service that allows sellers to store their inventory in Amazon’s fulfillment centers. Amazon takes care of pick up, packing and shipping the inventory directly to its buyers. The inventory is also offered with Amazon Prime privileges such free two-day shipping.

The number of FBA sellers worldwide has grown more than 65 percent year-over-year, according to Amazon.com. There are more than 2 million FBA sellers in more than 89 countries, and in more than 480,000 cities around the world. 

Amazon.com refused to provide the number of FBA sellers in the San Fernando Valley, but sellers from the area say the industry is taking off rapidly.

“FBA is essentially the mom and pop store for the internet,” said 25-year-old FBA seller Orr Benzvy. 

Benzvy, an Encino resident, opened his FBA account following his father, Doron Benzvy, who has been a and Amazon seller for about six years and a full-time seller for more than three years.

“FBA lets me run my business on a small scale, and lets me grow,” Orr Benzvy said. “I can work out of my garage if I want to and still have a decent income. It’s your own entrepreneurial bug.”

While Orr Benzvy appreciates the independence and flexibility the FBA service offers, his father values FBA’s room for sellers’ businesses growth.

“It decreases my work load because Amazon takes care of so many things,” Agoura Hills resident Doron Benzvy said. “So I can focus on looking for more inventory, and expanding to selling different types of products.”

Now, with so many FBA sellers from all around the world, there are more products of each type available to the public than there has ever been, he said.

“But I wouldn’t necessarily say stores like Radio Shack and Staples are running out of business because of the FBA trend,” Doron Benzvy said. “I think it’s Amazon in general. Amazon has developed a loyal and trustworthy relationship with its costumers, and people are sometimes even willing to pay more to get their good service.

Doron Benzvy is not the only one who sees online sales as on obstacle for existing stores.

“It is safe to say that online sellers in general, and Amazon in particular, have made it very rough on brick-and-mortar retailers like Best Buy,” said Gabriel Kahn, a co-director of media, economics and entrepreneurship at the University of Southern California.

So why not simply open a store of your own? Some may ask. Why split the profits with someone?

Experts conclude that Amazon is simply more beneficial to many sellers. Opening an actual store requires a much larger investment, while FBA sellers can open a virtual store with an investment of a couple thousand dollars.

“Amazon sellers can leverage arguably the best logistics backend in the world through FBA,” said Mark Faggiano, founder and chief executive officer of TaxJar, a website that aims to make sales tax simple for online sellers.



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