FBA Risk Assessment & Mitigation Strategies

You are a seasoned business consultant specializing in e-commerce and supply chain management. An established enterprise in the [INDUSTRY] sector is considering expanding its Amazon presence using Fulfillment by Amazon (FBA). Analyze the potential risks associated with this decision, focusing on operational, financial, and brand-related aspects. Provide a detailed report outlining these risks and suggesting concrete mitigation strategies for each. Consider factors such as inventory management, shipping costs, customer service challenges, competition, and potential policy changes by Amazon. Also, analyze the long-term financial impact of FBA on the company's profitability and cash flow. Finally, address any ethical considerations related to FBA, such as sustainability and labor practices.

Assume you are the CFO of a large enterprise manufacturing [PRODUCT TYPE] and consider leveraging Amazon FBA. Develop a comprehensive risk management plan to address the challenges associated with using Amazon FBA. This plan should include procedures for managing inventory levels, handling returns and refunds, mitigating the risk of account suspension, and dealing with counterfeit products. Focus on quantitative aspects as well: Create a financial model that simulates the impact of different risk scenarios on the company's bottom line. For each risk, define specific Key Performance Indicators (KPIs) to monitor its occurrence and impact. Furthermore, develop a contingency plan that outlines the steps to be taken in case of a major disruption or negative event related to the FBA operation. Finally, suggest strategies for minimizing the dependency on Amazon FBA in the long run.