Fulfilment by Amazon Guide – Amazon is a global marketing platform where the sellers from all over the world can sell their products and expand their market. Amazon is a huge market place so expanding options for solo entrepreneurs is huge.
And amazon does pretty good marketing tactics and it becomes easier for the solo sellers to expand their business on that. Also, the trust factor of Amazon amongst the users is great. The marketplace offered by Amazon to the sellers is also totally seller friendly. And it gives two fulfilments to the sellers. It is called Fulfilment by Amazon. The two fulfilment by Amazon are:
Fulfilment by Amazon Guide
- Fulfilment by Amazon (FBA) – It is a system in which the seller only sells the product and Amazon takes care of shipping.
- Fulfilment by Merchant (FBM) – It is a system in which the seller takes care of the packaging and shipping of the orders directly to the customers.
Let us understand about FBA in full detail and how it works. It is totally worth it for you to take this if you are a seller or a budding seller on Amazon.
Step 1 – Send the products to the Amazon fulfilment centre
Obviously, you have to first list all your products on Amazon for selling in your account. So, making a seller account and listing all the products in the Amazon account is a must. You will have to label all your products that you would ship yourself or through FBA. Now, if you choose FBA, you would ship the inventory through Amazon. If it is FBM, you would ship yourself.
Step 2 – Amazon will take care of the storage of your products through FBA
If you choose FBA, you ship your inventory to Amazon for shipping. Amazon will keep all your inventory in its warehouse. There it will scan the labels that you have attached, will weigh and measure each package, and will store everything accordingly.
Amazon will give you an online inventory tracking to let you stay on the top of your stock. Now, you can check your inventory in the Amazon warehouse through this and send them the products according to the status of the inventory.
Step 3 – Role of FBA when somebody orders your products through Amazon
Obviously, through FBA, Amazon will take your products from your inventory and keep it in its warehouse. Now, when someone orders, Amazon will itself pack the orders and ship it to the customer on your behalf. Amazon also takes the responsibility of the customer service from here onwards.
Fulfilment by Amazon Guide
These are three steps in which Amazon FBA works.
Cost of Amazon FBA
There are different categories that come into consideration when talking about the costing of Amazon FBA.
- General Fulfilment Fees
The first one is the general fulfilment fees. It depends on two factors. One of them is the size of the product and the total shipping weight of the product. There are different variations under this and Amazon provides the fees slab for this one to its sellers in detail.
2. Storage Fees
By taking FBA, you as a seller are taking the benefit of Amazon warehouse. So, obviously Amazon will charge you for the space it is providing you. It depends on how much space your products take in their warehouse. It is dependent on the volume you occupy in the warehouse and it is charged every month.
3. Removal Order Fees
You can pay Amazon to return some (or all) of your inventory to you. You will be charged on a per item basis for this by Amazon. It depends on the standard and also on the oversized product category.
4. Miscellaneous Fees
- If you send your inventory to Amazon warehouse and have not labelled it properly and something is missing there then they will take care of it to fix it. But, they will charge you for this.
- If someone purchases your product through Amazon and then returns it and if your product is available for free return then Amazon will charge you a return processing fee. The return processing fee will be equal to the original fulfilment fee.
- If your product is there in the Amazon warehouse and it is there for six months or if it hasn’t been purchased, then post six months, Amazon will charge you for this. If you feel there is something that wouldn’t cross the 6 month timeline, you can request Amazon to return that product and in this way you can save this fee from paying.
Benefits of FBA
- More trust of the consumers
- More time to grow your business
- Shipping hassles are take care by the experts now
- Automatic prime eligibility if you take FBA
- The coveted buy box
Cons of FBA
- It is quite expensive with all those additional fees
- Forfeiting control of the products
- Inventory tracking can be hideous