Other online sellers have been ranting about FBA, and you have asked yourself many times, ‘What is Fulfillment by Amazon?’ If you want to get the answer to your question, keep reading this article as we go into the nitty-gritty of Fulfillment by Amazon (FBA) and how sellers can maximize the opportunities it offers.
A few years back, Amazon made its intentions clear to help sellers on its platform upscale their sales through valuable services such as Merch by Amazon, Amazon Prime, and Fulfillment by Amazon. Their aim is pretty straightforward: ‘We want sellers to make as much profit as we are making.’ The platform is more than just a marketplace for business owners; it is their home.
In this guide, we will be answering the question, ‘What is Fulfillment by Amazon?’ in detail, and how you can make the best out of it to increase your profit margin.
What is Fulfillment by Amazon?
Fulfillment by Amazon is one of the services of Amazon that offers the picking, storage, packaging, and shipping of products for sellers. In other words, FBA is a method of selling on Amazon in which sellers send their products to Amazon to help them (sellers) package, store, and send to customers directly.
It is a simple, straightforward process that only requests the sellers to sell the products while leaving the fulfillment task to Amazon. You sell, Amazon ships within a few days to customers, everybody wins!
Fulfillment by Amazon has changed the way entrepreneurs conduct business. The usual method involves buying from producers or wholesalers, monitoring the packaging, shipping to sellers’ stores, advertising and selling, then sending to customers. This process is a tedious way of selling. It leaves sellers exhausted and sometimes, making them spend more money than their budget.
With Amazon, you are in luck as your only job is to sell and leave the rest for them to handle.
What are the Services Offered by Amazon?
- Picking products
- Products storage
- Shipping Inventories to customers
- Packaging
- Free sponsored ads, promotional clicks, free storage, free removals, and returns for new members
- Management of customers service
Why Should You Join Amazon FBA?
Amazon makes e-commerce a walk in the park for many startups as well as experienced business owners. Presently, over 90% of sellers are using FBA service to upscale their sales, and it has been working out for them. Aside from that, a new report states that Amazon’s third-party sellers now sell more products than Amazon itself, with more than 50% of Amazon sales coming from them (third-party sellers).
These results are just peaks into what FBA offers. When you register for FBA, there is no limit to the benefits your business stands to gain in the long run.
What are the Benefits of Joining Fulfillment by Amazon?
If you are still not convinced of the answer to the question, ‘What is Fulfillment by Amazon?’, here are the other benefits you will be enjoying when you start using FBA services:
1. Amazon’s Name on Your Products
Who does not like to be associated with a prominent and good name in the e-commerce business? Amazon’s name on your products assure customers of guaranteed quality. Anyone who has sold using face-to-face marketing can tell you how nerve-wracking it is to convince prospects of a product’s quality. You don’t have to do this when you join FBA since many customers trust Amazon’s products than other e-commerce websites. A 2019 report states that 89% of buyers believe in Amazon’s products than other online sellers.
Amazon’s name on your products will influence many customers to buy from you because it has long been using competitive price, fast delivery, quality products, and good customer service as the competitive edge above others.
2. Reduced Shipping Fees
Amazon shipping fee is one of the cheapest you will see around. The e-commerce store already built a strong relationship with many shipping companies, making sellers pay less than if the inventories were being shipped from an individual or other companies. All you need to do is keep track of your listings and ensure you have adequate stocks for Amazon to send to your customers.
3. Returns and Refunds
Even though you are the seller, the responsibility of returns and refunds is not on you. Many entrepreneurs fear returns and refunds because it means the customer was not satisfied with the product and may not patronize them in the future. Nonetheless, you do not have to face this when you use FBA services. They handle these aspects because it is part of the FBA package.
The company’s Online Returns Center provides consumers with help pages and information about contacting them if they have concerns about the products.
4. Excellent Customers Service
Amazon takes pride in its almost flawless customer service, but with FBA, you get more. As an FBA member, you can take advantage of their customer service platform to sort your customers’ needs and requests. Customers can contact Amazon customer support through phone or email, any time at no extra cost.
This feature ensures that you conduct all your business transactions and services through one channel, which allows for better organization and management of your business. Also, you can go about your day-to-day activities without worrying about customers’ complaints and requests.
5. Fast Delivery
FBA products are automatically eligible for Amazon Prime and free shipping to customers and shipping times. That means you can offer your customers free shipping on their products for a certain amount of money without paying Amazon or charging your customers’ extra fee. Again, this is part of the FBA program.
6. Large Storage Space
Many sellers own large warehouses for their products, while others can rent them. All these options are great, but do you know that there is no limit to the number of inventories you can store with Amazon? Besides, the task of moving, monitoring, and managing your products can be time-consuming.
This part is where Amazon can help. You will have access to unlimited storage of your products when you join FBA. That is because the company has several warehouses scattered in different countries. For instance, the average size of an Amazon fulfillment center is around 8000 square feet.
7. Multichannel Fulfillment
Aside from offering fulfillment services to products on Amazon, FBA also caters to products sold on other e-commerce channels. In other words, the multichannel fulfillment program allows you to sell your products on different online stores and still have Amazon ship them to customers.
Amazon Fulfilment and Storage Fees
Amazon charges different fees for its FBA members. They include:
● Standard Seller Fees: Amazon gets between 15% – 18% on every product a seller sells. The specific price varies and depends on the product. The stipulated charge is 15%, but some other hidden costs such as returns and unexpected services fees (e.g., when your products get to Amazon without proper preparation) may apply. All these prices accumulated to a high overall price.
● Fulfillment Fees: These fees are based on the unit and size (weight) of the products. The fees cover the picking, packing, shipping, handling customer service, and product returns or removal.
● Inventory Storage Fees: This is the cost charged for all products in an Amazon Fulfillment center. Depending on the period and the daily average volume of products, Amazon charges sellers a monthly storage fee per cubic foot of inventory. The size of the product also matters. For instance, a standard-size item weighs 20 lb or less, and it must not exceed 18 inches on its longest side, 14 inches on its median side, and 8 inches on its shortest side. Any product over this is considered oversize.
● Long-term Storage Fees: These fees only apply to inventories that some sellers have stored with Amazon for more than a year, plus other monthly storage fees.
● International Shipping: International shipping is Amazon’s Global Export program that allows sellers to ship their products worldwide.
How to Open Fulfilment by Amazon
Now that you have the answer to ‘What is fulfillment by Amazon?’, it is time to join the business owners’ league making substantial sales by using FBA services. If you are ready to open your FBA account and you have your products ready, follow the step-by-step guide outlined below:
● Head over to Amazon and click on the orange ‘sign Up’ button at the upper right corner to create an Amazon seller account. Your seller account can be an individual or professional. Read our previous post on how to create an Amazon seller account.
● Input your phone number or email address and a password of your choice.
● Once you create your account, set up your FBA by creating a listing for your products. Product listing indicates the details and description of the products, such as title, brand name, UPC, price, images, and conditions.
● Once you indicate that you want Amazon to fulfill your products, the next instruction will be to send your inventory.
● Provide more information on your products, such as weight and size.
● Ensure you package them and remember to label them.
● Once you have filled all the steps on the page, you will have a chance to check and accept the shipment. Then you can tell Amazon how you want them to deliver your inventories.
● Print out the shipping labels, and send your inventories to any fulfillment center close to you.
● Ensure you follow Amazon’s packing guidelines, shipping, and routing requirements.
Conclusion
In essence, we have answered the pertinent question of many people, ‘What is Fulfillment by Amazon,’ the benefits involved, and the step-by-step process of being an FBA member. The e-commerce world keeps evolving every day, and it is vital to keep up with this pace to boost your revenue and enlarge your customer base. FBA is a program that offers your business many opportunities to stand at the top. Grab the opportunity now because you never can tell what the next invention will be.