Whether you are a beginner or an expert seller on the Amazon marketplace, there are always some tips and tricks to beware of and make use of them at the appropriate timing.
Amazon FBA is also one of such advanced services offered by Amazon to make doing business much more convenient for the sellers. Thus, in this guide, we are going to explain Amazon FBA in the simplest terms possible for an Amazon seller who has just started their journey. As a recognized Amazon agency, we are here for you every step of the way.
What Is Amazon FBA?
Amazon FBA (Fulfillment by Amazon) enables you to send your inventory to the fulfillment centers of Amazon. There you can ask for your products’ storage until the customer finally placed an order to buy them. After that, from packaging to delivering, everything will be the responsibility of Amazon. The employees who work for Amazon are the ones supposed to perform this job.
Yes, it’s not free of cost. You have to pay the charges but on the other hand, it also saves you from different hassles. All these pros and cons will be shared hereafter.
How Does Amazon FBA Work?
To make the most out of something, one must consider all aspects. If you have been doing business with the Amazon app for quite many years, you must know about this FBA – Fulfillment Services or may also be familiar with how it works. Being a beginner, you probably don’t know much of it. So, here is a step-by-step introduction of the process that how Amazon FBA works.
Step 1 – Send Your Products To Amazon Fulfillment Center
The very first thing is when you add any product to the Amazon catalog, remember to specify FBA inventory if you want to use this service.
Now, prepare your items to be shipped to the Amazon Fulfillment Center via safe transportation.
Note: Follow the packing and shipping guidelines by Amazon to send your inventory to an Amazon warehouse.
They provide you tracking details to track your items that are shipped to their fulfillment center for storage purposes.
You have to pay for your stored inventory as long as it stays there. The storage fee depends on the size of your product.
Step 2 – Wait For The Customer’s Purchase
Now, the inventory has reached their fulfillment center and is ready to purchase by a customer. When a customer buys it, whether, from Amazon or another e-commerce platform, it will be delivered to their given address.
Step 3 Let Amazon Deal With Shipping and Customer Service
Once the order is confirmed, Amazon is liable to provide delivery of the item. They will pick, pack, and ship your product following the delivery method chosen by the customer. They are also responsible to manage transactions, shipments, returns, and refunds.
Briefly, every kind of customer service and care will be done by Amazon. And they will send the profit from your sales after every 2 weeks.
Pros And Cons Of Amazon FBA
Before we head towards Amazon FBA Strategy, we urge the need to discuss its major advantages and disadvantages. As you know multiple factors can affect your sales therefore, you should view the following points to understand. Lastly, we will reach out a conclusion to decide whether it’s suitable for your Amazon business or not.
1. Scalability and Logistics Support
Amazon FBA makes shipping effortless for you. Sit back and relax while Amazon FBA will pack and ship your products to buyers. Fast shipping among other benefits without putting your efforts into doing that saves you sufficient time. You can focus more on scaling your business.
Also, no requirement for the minimum number of products to be stored at Amazon Fulfillment Centers.
2. Discounted or Free Shipping
When you opt for Amazon FBA, your inventory automatically qualifies for Amazon Prime. The products entitled with Amazon Prime Delivery are delivered free to the customers. We all know Free Shipping always attracts the customers and also gives them the confidence to buy your product. And above all, you don’t need to pay an additional amount to Amazon for this free and fast shipping as it is already included in the service.
3. Increase Your Profit Margins
Considering the above factors as you see, you don’t have to offer your customers free or express shipping which will likely reduce your profit. Moreover, you are sending your inventory to Amazon Fulfillment Centers from where the items will be directly shipped to the customer’s provided address. So, being an online seller, you can also save a significant amount from the rent of a warehouse. inbound marketing
Yes, you have to pay a fee for Amazon FBA but still, it’s cheaper than what you would have spent in managing the fulfillment and shipping personally.
4. Customer Service Management
As we mentioned earlier, it is Amazon who is liable and answerable to the customers for order delivery and other queries related to shipment so, the FBA seller doesn’t have to deal with it. From transaction, and shipping to returns, they look after everything and give their best. You don’t have to bear with the headache of delay or delivery at the wrong address. Instead, you can enhance your products’ features, quality, and business strategy.
1. Long-term Storage Fee
If your sales aren’t going well ending up with your inventory occupying space a little longer on the shelves of Amazon fulfillment centers, you must get alert. As it’s not a free service so, one with a small budget or large-sized items to sell should review their decision.
2. Strict Guidelines
When you are about to send your inventory forfulfillment, make sure you have followed all Amazon shipping guidelines and packaging requirements, otherwise, they will send your items back.
Labeling and packing each product correctly becomes more difficult if you are sending many of them at a time.
3. No or Limited Branding Opportunity
Parcel send by Amazon contains the logo of Amazon and hence, the buyer will never know about your brand. So, if you are planning to create your brand it may not help you to be an FBA seller.
Certainly, Amazon FBA is a great service and opportunity to seek benefits for online sellers. Despite all these, advantages one must also keep in mind other factors such as the turnover, profitability and saving ratio, and the size of your inventory. For more such blogs and our in-depth guide of Amazon FBA for intermediate sellers, visit our website.