Amazon FBA can be a little confusing, but we’ll help you break it down!
If you’re a seller in the Amazon Marketplace, you know that your biggest concern is shipping and fulfillment. It’s not rocket science — as long as people get their products in a timely manner, they’re happy.
So how do you do that? And how can you do it without spending all of your time monitoring orders? The answer is Fulfillment by Amazon.
Fulfillment by Amazon (FBA) is a fantastic service offered by Amazon to take care of your shipping and fulfillment needs so that you can focus on what matters: sales. You sell stuff on Amazon, Amazon ships it for you. It’s that easy! Here’s how it works:
1. You send your products to an Amazon warehouse or fulfillment center.
2. Customers order from you on Amazon, and the order gets shipped by Amazon.
3. Returns are also handled by Amazon. Easy peasy!
4. You pay fees for this service, which gives you access to one of the world’s best fulfillment networks and 24/7 customer service from Amazon.
Evolution Of Amazon FBA
When Amazon started as an online bookseller, it didn’t take long for the brand to become one of the biggest names in online sales. The e-commerce platform was founded in 1994 and just two years later began offering items other than books. In 2006, the brand started its Fulfillment by Amazon program.
The company wanted to help small businesses by giving them access to their fulfillment capabilities and customer service infrastructure. They shared their business model with others and helped teach third-party sellers how to profit big by doing things the “Amazon Way.”
In 2006, Amazon launched FBA (Fulfillment by Amazon), and they haven’t looked back since. FBA gives third-party sellers access to Amazon’s business model—including its fulfillment capabilities and customer service infrastructure—to help them sell more products and make more money using the e-commerce giant’s platform.
A number of Amazon FBA PPC tools are available to bring your listing to the top of search results efficiently. You can use them to boost your product’s sales as well as your online presence.
Cost Of Amazon FBA
When you sell products through Amazon FBA, you don’t have to worry about picking, packing, and shipping orders. You also don’t have to provide customer service for the products you sell. Because Amazon does that for you, there is a fee involved.
The fee covers the cost of storing your products in Amazon’s fulfillment centers, picking, packing, and shipping orders, and providing customer service for those products sold.
In short, the Amazon FBA program charges storage fees and fulfillment fees. The more inventory you have stored at Amazon’s warehouses, the more it’s going to cost you.
There’s also a cool feature where your costs go up for items that are stored for longer than 180 days. This is a great way for Amazon to encourage people to get their products moving and keep them moving.
In addition, Amazon tracks items that are in storage at an Amazon warehouse but are not listed for sale—these are stranded inventory. Stranded inventory costs you money, but don’t worry: Amazon provides a stranded inventory report so you can see how much you’re paying. These will allow you to see what kind of fees you’re actually paying as a part of this program. Remember, too, that you’ll pay higher storage fees to warehouse your inventory during the holiday season because of peak holiday demand than the rest of the year.
Pros Of FBA
Access to Prime Customers
The number of Amazon Prime customers is growing daily, and you want your products to be in front of the ones who are looking for them. If you leverage the FBA program, you have access to millions of potential customers that would otherwise not be available to you.
Great Customer Service
Customer service can be tricky – especially when you’re just starting out or if you don’t have a large team dedicated exclusively to it already. When you use FBA, Amazon handles all your customer service needs – including returns – so you won’t have to worry about dealing with unhappy customers or answering complicated questions on policies and procedures. It means you have sufficient time to focus on what really matters: growing your business!
With FBA, Amazon manages the return management process for you. All you have to do is simply provide a prepaid shipping label when a customer initiates a return, and Amazon handles everything else.
Nowadays, there’s a lot more competition on Amazon than ever before. Millions of sellers are now selling millions of products, so it’s more complicated than ever for small and medium businesses to get noticed. The good news is that several Amazon FBA PPC tools can help you stay ahead of competitors and run a successful business on the most prominent e-commerce giant.