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Amazon FBA (Fulfilled by Amazon)
The FBA is a service offered by Amazon Inc. to the sellers to simplify their eCommerce business. You will get complete storage, packaging, and order fulfillment services from Amazon. Send your inventory to Amazon, they will manage the rest work.
Table of Contents
How does Amazon FBA work?
Step 1
Send products to Amazon warehouse
Login to seller central Dashboard. Create a new product listing under FBA (fulfillment method). Make a shipment plan and get warehouse details to send inventory. Pack the inventory and send it to the assigned warehouse.
Step 2
Amazon will receive it and notify you
Once they receive it, you will get a notification in the seller central. They will unpack the cartoons and keep the packages in the racks. Any damage to the inventory in the warehouse is a subject to reimbursement from Amazon.
Step 3
Your listing becomes active
Amazon activates your listing after receiving the inventory . Customers can see your listing and order product.
Step 4
Amazon ships it
Your orders are Amazon fulfilled. So, enjoy meal and happy hours with your family. Amazon team will deliver the order to the customer.
Step 5
Customer support from Amazon
Amazon Fulfilled is a hassle free business. They provide 24×7 support to customers of FBA sellers. They will look for returns, package lost etc issues. Chill with your family and contribute to business.
Benefits of Fulfillment by Amazon
Fulfilled by Amazon Label on Listing Page
Customers will see fulfilled by Amazon label on your listing. It builds trust among customers for assured delivery.
Buy Box
Fast and assured shipment
An Amazon FBA business model ensures on-time shipment to the customers. Customers will receive order within the committed delivery time.
If any issue occurred, the Amazon team will look after it. In case, the package lost or late delivery, Amazon will bear the charges. Your investment is safe.
Time is money
Amazon handles shipment, returns cases, and customers queries for FBA sellers. You will get enough time to manage business. Invest your time on product promotion and marketing for more sales.
Full customer support
Amazon provides 24×7 support to customers of FBA sellers. They will assist your customers and solve their queries and complaints.
Also, they will manage returns for you as per FBA returns guidelines. It is free of cost. You do not need to pay a penny.
Multi-channel fulfillment
Doing FBA, you are not limited to sell and fulfill orders received on the Amazon. This process allows you to fulfill external orders from your Amazon Inventory. It is “Multi-channel order fulfillment”.
Fill out a form and make an order fulfillment request in the seller central. They will do shipment to your customer.
Prime Delivery
Amazon ensures fast and free delivery services to the prime members. Listing your product under FBA guarantees prime delivery badge on your listing.
Unlimited storage space
Amazon has thousands of physical warehouses in different countries. You can send unlimited inventory to Amazon for storage.
Disadvantages of FBA
Investment
Amazon fulfilled business needs investment from the first stage. You will need to pay the supplier for inventory and shipping to the warehouse. The investment depends on the product you selected to start Amazon fulfilled business. With FBM (fulfillment by merchant) you can start an Amazon business with no money investment (dropshipping).
Long-term storage fees
Amazon gives space to FBA sellers to keep their inventory. They charge a standard monthly storage fees (per cubic foot) to sellers for up to first 365 days.
A seller needs to pay long-term storage fees to Amazon after one year. It applies to inventory that completed 365+ days in the warehouse.
High return rates
Amazon team handles and manage the FBA returns. Amazon fulfilled sellers experiences high return rates. As Amazon closes 90% return case in customer’s favors.
Do Amazon charge for it?
Fulfillment by Amazon programs associates certain fees modules:
Fulfillment fees
You are using Amazon as a shipping carrier. Amazon will charge you FBA fees based on the package weight/unit.
Fee structure: https://services.amazon.com/fulfillment-by-amazon/pricing.html
Referral fee
You are selling your product on Amazon marketplace. Amazon charge you 15% of the product selling price on every unit sold.
Monthly Storage Fees
Amazon provides you space in its warehouse to keep your inventory. It charges monthly storage fees to sellers per cubic foot. The monthly storage fees depends on the area covered by your inventory in the warehouse.
Seller Plan
Amazon has two seller plans Individual and Professional seller. Individual seller plan is free but has limitation. One can send limited inventory to Amazon warehouse and cannot promote and advertise products on Amazon.
To enjoy advertising benefits and unlimited storage warehouse, you need to be a professional seller. It costs $39.99/month.
Is Fulfillment by Amazon worth in 2022?
Yes, Fulfillment by Amazon is a worth doing business in 2022. It has open opportunities for both established and new sellers. A person with good knowledge of eCommerce industry can make good profit.
A study featured at Repricer express quotes, “66% of top 10000 Amazon sellers do FBA”. The facts and figures supports Selling Amazon fulfilled merchandise. But, before you start, I will suggest you to have your eye on Amazon pros and cons. It will help you both opportunities and risks associated to Amazon business.