Fulfillment by Amazon (FBA), also known as Amazon FBA, is a service offered by the online retail giant to business owners selling on Amazon and looking to streamline their logistics.
Amazon FBA is one of the many services the company provides to third-party sellers and has been available since 2006. Understanding how Amazon FBA works and how to maximize sales through Amazon FBA can help you grow your business and ship more products more efficiently.
How Amazon FBA Works in Six Steps
Amazon FBA is a solution allowing businesses selling on the eCommerce titan’s platform to use Amazon warehouses to store, label, and ship their products. It eliminates the need for smaller Amazon sellers to invest in warehousing facilities and staff independently, letting them focus on growth.
Sellers looking to use Fulfillment by Amazon must complete a few simple steps:
- Enter the product’s details on Amazon Seller Central. If Amazon already knows the item you’re trying to ship, you may have the option to use an existing listing. Otherwise, you’ll need to enter the product’s category, name, brand name, and manufacturer, set a price, and specify its condition.
- Select your fulfillment channel. To ship through Amazon FBA, select “I want Amazon to ship and provide customer service.”
- Wait for the listing to be generated. The process generally takes a few minutes to complete, after which it becomes available on your Manage Inventory menu.
- Edit the listing’s details to add images and enter additional product information critical for shipping carriers, such as product weight and shipping weight.
- Use the Send/Replenish inventory menu to set up your shipments and tell Amazon how your products will be packaged and how many units you’re shipping.
The seller’s responsibilities are to select their products, keep their inventory updated, and create product listings. When selecting Amazon FBA as the fulfillment channel, the company will handle everything else on your behalf:
- Your products are shipped to an Amazon FBA warehouse.
- Amazon staff receives, handles, and stores your products at the specified warehouses.
- When a customer purchases one of your Amazon FBA-stored products, Amazon handles 100% of the transaction process, from the payment stage to automatically updating your inventory.
- Amazon packs and ships your products directly to the customer, ensuring high-quality customer service, including refunds and returns.
- You receive payment from Amazon every two weeks directly to your bank account.
The Benefits of Using Amazon FBA
Shipping products through FBA has helped numerous businesses grow. Some of the most significant advantages and benefits include the following:
Decreased Overhead and Increased Productivity
The primary reason to select Amazon FBA is to eliminate the need to invest in storage facilities and associated staff to handle increasingly large quantities of items. Because Amazon handles packing, labeling, shipping, customer service, returns, and refunds, FBA allows you to focus exclusively on business growth, marketing, and inventory management.
Additionally, Amazon FBA sellers can run their business from anywhere in the world 24/7. As Amazon handles the customer service for you, their team is available to answer customer questions, saving you the need to constantly maintain communication channels and opening hours.
High Storage Space Access
Choosing FBA enables you to benefit from Amazon’s storage facilities, which are equipped to manage large quantities of packages as efficiently as possible.
Sellers taking advantage of FBA have virtually unlimited storage space, making it possible for them to move most, if not all, of their products through FBA without needing to invest in seller-managed warehousing facilities.
Ease of Use and Fast Delivery
Amazon FBA is accessible from the standard Amazon Seller Central interface, making it easy to use. If you can navigate Amazon’s website, you can use Amazon FBA.
With Amazon FBA, you can take advantage of the company’s quick order processing and fast shipping, allowing you to deliver more items to your customers.
All products shipped via FBA are eligible for Prime, meaning customers with an Amazon Prime subscription may benefit from free shipping and faster delivery times. You don’t need to charge extra for shipping costs, as they are automatically included in the service.
You Can Choose How Your Products Are Shipped
Although Amazon’s default option for shipping to FBA warehouses is their Partnered Carrier Program (PCP), the company lets you ship via a non-partnered carrier instead.
Choosing a non-partnered carrier may be the better solution if you’re shipping from specific destinations so you can benefit from more advantageous rates.
For example, if the bulk of your products come from China, you can partner with Asiana USA to ship your items to any FBA warehouse or Amazon fulfillment center worldwide. Asiana USA handles all aspects of packing, labeling, and shipping to the warehouse or center for you, simplifying your logistics.
Non-partnered carriers are also the only option if you need to ship items Amazon considers hazardous materials to FBA, as PCP carriers will not handle them.
The Amazon Seller Central dangerous goods identification guide shows examples of hazardous materials you can ship through FBA, such as lithium batteries and magnetized products.
Costs and Considerations of Using Amazon FBA
While choosing FBA comes with numerous benefits, the service also comes with costs and requirements that business owners must consider carefully.
Using Amazon FBA is an Investment
Because Amazon FBA is a convenience service, sellers will need to pay Amazon FBA fees for all items they ship. Potential fees include short-term and long-term inventory storage, fulfillment, order removal, returns processing, and unplanned services.
The company provides a free profitability calculator to help you balance FBA fulfillment fees and other Amazon charges with sales revenues, allowing you to accurately estimate whether the service is worth using for your products.
Alternatively, you can rely on a third-party partner for warehouse and fulfillment in the countries you ship to the most. Many of these partners offer more competitive storage and management fees than Amazon. For example, Asiana USA offers warehousing and fulfillment services in China, Vietnam, Bangladesh, and the United States.
Sellers Must Focus on Inventory Management
While selling items and shipping through Amazon FBA is a relatively easy task, the seller is fully responsible for updating and managing their inventory continuously. They must also ensure that all items sent to Amazon are appropriately packaged and labeled before reaching the warehouse, per the FBA warehousing guidelines.
More Limited Branding
If you rely on custom branding and packaging, choosing Amazon FBA will place your products inside Amazon-branded boxes and packages, limiting your customers’ exposure to your logos and brand identity.
Maximizing Sales with Amazon FBA
The best way to maximize sales and increase profits while selling through Amazon FBA is to follow these tips and tricks.
- Research your products using online analytics tools and select the most profitable product categories for your items.
- Take advantage of item bundles. They can help you stand out from similar item listings and provide customers with items that complement each other. Additionally, due to how FBA fees work, bundling multiple smaller-priced items together is effectively similar to selling higher-priced items, meaning you’ll pay fewer fees and earn higher profits.
- Always include images with your products and ensure they are of the highest quality possible.
- Ensure your inventory remains well-stocked, especially on your most popular products. You risk losing sales if an item in high demand is regularly out of stock.
- Learn how to optimize your product listing with Amazon SEO techniques to ensure your items rank higher and are seen by more customers.
- Encourage customers to leave reviews on your products. The number and average review score are among the most significant influences on a given product’s overall sales.
Find a Reliable Amazon FBA Shipping Partner
Shipping items from their point of origin to an Amazon FBA warehouse or fulfillment center can represent significant stress for sellers. Finding the right shipping partner ensures your items reach Amazon storage facilities and comply with the company’s rules, packing, and labeling requirements.
If you need to ship items from China to an Amazon FBA warehousing facility, Asiana USA can help. We have the resources and experience to help you source products from China and ship them to any Amazon FBA warehouse in the United States, Canada, or the European Union.
Our staff can handle all duties, customs clearance, and submitting documentation on your behalf, simplifying the process. Contact us today to learn more about our Amazon FBA shipping services.
