Did you know that as a seller on Amazon you can utilize certain tools like the FBA? With the FBA, you will store your inventory in Amazon inventory fulfillment centers which are all over the world. Whenever a customer places an order, amazon goes ahead and manages it by packaging and shipping it to the relevant customer.
The use of Amazon FBA tools will allow you to transfer inventory from any Amazon fulfillment center to any FBA facility. They will prepare the orders with the labels of FBA and the box, acting as your hub for central logistics so that in the process, you are able to settle on other things that require your time.
How fulfillment amazon works
The FBA is different from the merchant fulfilled network where the shipment and order fulfillment process is handled by Amazon sellers. When an order is placed, FBA picks it and ensures that it is shipped to the customer on behalf of the seller. The customer gets the tracking number from Amazon, which is followed by receiving their order within two business days due to the Prime shipping that comes to the FBA.
With the FBA, you are assured of your products being shipped to an Amazon warehouse for storage purposes as a center that is Amazon fulfillment center. You have the duty to ensure that the shipments are sent to Amazon fulfillment centers through a freight forwarding company or a shipping pallet from your supplier.
For your products to be stored in an Amazon fulfillment center, you will need to pay an inventory storage cost. The fee will depend on the season your items will be kept at the warehouse. When the season is busy, the cost is higher as compared to low seasons.
Apart from the inventory fee for the storage, you will have to pay a fee to Amazon for picking, packing, shipping, and providing services to your customers. Should there be inquiries on your product by the customer, all communications will be handled by Amazon. This includes returns, refunds, and inquiries.
Who can use Fulfillment by Amazon
If you are a seller on Amazon and yet you don’t have room to store your products, customer service, or inventory management, you might find that using FBA might just be good for you. But for sure, there are businesses that do good by using FBA as compared to others. These businesses include eCommerce stores and brick-and-mortar stores.
Selling by use of FBA might be good for:
- Brick and mortar stores: A brick-and-mortar business that makes good profit margins and sells unique products might find success faster on FBA as compared to brand new business.
- Ecommerce stores: Sellers with eCommerce stores might attract more buyers when they sell their products through Amazon.
- Entrepreneur: It definitely will take more time for you to be able to fine-tune your product profits and offering spreads. The Amazon selling rules change every now and then and you might need enough time to change your procedures and processes as per the changes. As an entrepreneur, you will need to commit for the long haul.
With the use of fulfillment by amazon, it will enable you to make money as you learn the best practices for going through a fast-changing marketplace in the eCommerce world. There is a need for you to be keen on the profit margins to determine if utilizing FBA is the best way to go or not for certain products. Besides that, you also need to learn about how to get ungated on amazon so that you can independently sell all kinds of goods.
The cost of Fulfillment by Amazon
Costs of FBA include monthly fees, product costs, shipping, and third-party tools. As a seller, you will be required to have monthly fulfillments, and fees for storage when utilizing the FBA. There is a need for you to do your own research before settling for FBA in regard to your product’s profits as the cost might just be expensive for you to manage. Costs will include the following:
- Monthly fees
- Fulfillment fees
- Stock removal fees
- Labeling fees
- FBA preparation service fees and FBA unplanned preparation service fees
- Returns processing
- Storage fees
- Long term storage fees
The above fees might be more expensive as compared to fulfilling the order through MFN as you are in most instances, paying for convenience. When you use FBA, your customers will be able to get their orders within two days of ordering through Amazon Prime shipping. Buyers will also have an idea of what to expect when it comes to customer service as they will deal directly with Amazon and not you.
Other costs apart from the above which you might incur are third-party tools and product costs. The Amazon FBA tools help in ensuring that your experience with FBA is superb and thus, making the selling easier and stress-free.