Amazon Fulfillment By Amazon (FBA) is a service Amazon offers that provides storage, packaging, and shipping on behalf of Amazon sellers.
Under the FBA program sellers ship their merchandise directly to Amazon fulfillment centers. In these fulfillment centers, merchandise is stored until sold. Once an order is placed, Amazon employees will prepare, package, and ship the products for the seller.
This takes the burden of day-to-day seller fulfillment tasks off sellers’ shoulders and allows them to focus on the more cerebral aspects of their business.
The process for the Amazon FBA program is simple, quick, and convenient.
If you’re new to selling on Amazon, you can get started by creating your Amazon FBA account. If you’re already selling on Amazon, you can simply add FBA to your current seller account.
Once your account is set up, you can start adding products to the Amazon catalog. If you are selling brand-name products, simply add inventory to stock. There is no more need to create product listings.
Get your products ready for transport to Amazon’s fulfillment centers, where they will be stored and distributed when customers order them. You can get the required shipping supplies directly from Amazon, or purchase your own items.
This is a good time to inspect your products and weed out any damaged or low-quality items, so they no longer get sent to customers.
Once your products are ready to be shipped, send them directly to Amazon. Draw up shipping plans and choose partner carriers to deliver and track your packages to the Amazon fulfillment centers.
You don’t have to figure out this part alone – Amazon offers an extensive array of Amazon seller tools that can help you make it through this process.
Once your account is set up and products are in, it’s time to wait for customers to arrive. Customers can find your products via Amazon’s website or app, and place an order.
Amazon will fill those orders as quickly and efficiently as possible. Customers will then receive their tracking information directly from Amazon. All Prime customers get free and prompt shipping on your products. Non-Prime customers can also qualify for free shipping on certain eligible orders, too.
This is the step of the process that you’re paying Amazon FBA to take off your hands. Confirming the customer’s order, picking, packing, shipping, and providing tracking details can be a lot for one seller to handle, especially if orders start to come in thick and fast. Every FBA Amazon seller will be delighted to know that Amazon FBA allows you to outsource this process to a dedicated team, and get it done quickly and efficiently.
Amazon provides customer support for all of the products you sell through them. This is another time-consuming aspect of the business that the Amazon FBA program takes off your hands. Their very own customer service team will respond to and manage all customer inquiries, refunds, and returns for any FBA sellers.
Free Shipping on Eligible Orders: With your FBA account, all of your products are eligible for Prime two-day shipping. This means that your items will reach buyers faster, enhancing the customer experience. This convenience will keep them coming back to your store next time they need to place an order, building customer loyalty.
Customer Service: Amazon takes care of all of the customer service aspects of your FBA business. From returns to customer inquiries, Amazon takes care of all of those tasks so that you can focus on growing your business.
Reach: Finding and reaching new customers can be difficult for any business. With the Amazon FBA, you’ll be added to one of the most extensive and popular online shopping catalogs in the world. This means that you can tap into new markets and maximise sales.
For the privilege of selling on Amazon, you will have to pay a number of fees. These payments will cover the cost of storage and the labor of Amazon employees who fulfill your order and take care of customer service.
Amazon charges fees on products in two ways: commissions and shipping. Amazon’s commissions range from between 8-15% per product. Meanwhile, shipping fees will depend on the weight and size of the item. Still, Amazon’s shipping fees on products are more competitive compared to shipping by yourself. For example, a heavy item like an Xbox would typically cost $50 to ship via courier, but Amazon will likely only charge you between $8 to $12.
If you sell fewer than 40 products per month, you’ll pay roughly $1 per sale. If you sell over 40 products a month, you’ll pay only $39.99 per month. On top of this, you’ll also have to pay other fees such as storage fees, Amazon’s fulfillment fees, return fees, and others. You can view a guide to all the fees involved in the Amazon FBA program here.
Still, when you consider all of the work Amazon takes off your hands, especially as your business scales upward, these fees are a worthwhile investment.
Furthermore, when compared to the cost of a traditional business model (renting a warehouse, acquiring your own brick-and-mortar business space, hiring and paying your own employees to fulfill orders), there’s no question that comparison to selling on Amazon FBA is the more inexpensive option.
While Amazon makes it easy for you to grow your business by taking care of the many low-level retail tasks, Amazon FBA sellers will still have to mastermind the direction of their business. Here are a few tips to get you started:
Amazon is a huge collection of various items. Simply listing your products and hoping for people to stumble across them is not an effective strategy if you want to be a successful seller in Amazon FBA.
You should take advantage of all of the marketing strategies that are available to businesses in order to stand apart from the competition. This includes marketing your store on social media, a blog, your website, and using email marketing to help get the word out about the products you sell.
You may also want to look into affiliate marketing. Here, you reach out to influencers and bloggers who will promote links to your Amazon products on their platforms. They get a commission for each product sold. This helps get your store in front of more eyes than you would typically get from just your own audience.
The most effective way to be successful with the Amazon FBA program is to sell products that people actually want to buy. It’s important to stay up to date with trends via the news, social media, word-of-mouth and other sources so that you know what your target audience is interested in.
While there are waves of fads that you might be able to ride, it’s important to invest in staple, evergreen items that will consistently be in demand. Look at products and industries that are strong and always seem to be performing well.
A good way to determine which niche is right for you is to go through Amazon and find bestsellers. Make sure to stay as mainstream as possible so that you can continue to have the demand necessary for growing your business.
Once you find your niche, the next step is understanding your competition. Check out their products and how they’re pricing merchandise so that you can remain competitive. Review their marketing efforts to find out what’s effective for the niche and what isn’t. You’ll be able to learn quite a lot from doing a little research into your competition and their performance.
Your research should also include reading customer reviews. Find out what issues people are finding with the products your competition is selling and make sure to build upon that by improving your products to meet that need.
It may be beneficial for you to start with just one product on Amazon so that you can ease yourself into the business. This will help you get the hang of the process faster and lessen the amount of stress caused by the program’s learning curve. Once you get a better understanding of the program, move on to selling a whole range of products.
Also, always try to maximise profits during the holiday season by adding more products or collections so that you can take advantage of all of the shopping going on during that time.
Once you’ve found the right niche for you, your next steps involve choosing the right products to sell to your target audience and pricing them reasonably. Here are some things you should consider.
Items that are priced between $10 and $50 will typically sell better than those of higher or lower value.
Consumers see items priced below $10 as low-quality. However, anything higher than $50 can make them think twice about finishing their purchase. Not to mention, items priced below $10 will not give you the best profit margins, which means you’ll have to sell more in order to make money.
The $10-to-$50 range is the perfect middle ground for all customers using Amazon.
The products that sell the best on Amazon FBA are those that are typically seen on the front page. By slashing your prices by one-third, you can increase your chances of getting on that page, increasing visibility, and the likelihood of someone making a purchase.
Items requiring complex shipping arrangements will be more expensive to deliver to your customers. This includes oversize items, and breakables like items with glass parts. These products make delivery a hassle and can end up costing you. When this happens, you won’t earn much of a profit.
Even if you follow the above guidelines, it’s still important to find the right product. Any product can be the right product as long as you know your audience and have the ability to market it correctly. There are, however, Amazon FBA product categories that generally do well. It’s important to consider these options when picking your niche and the items you wish to sell.
Books have always sold well on Amazon. After all, that’s how Amazon got its start. While many people believe that the book industry is dying, that’s simply not true. Continuous sales of books and paper products on Amazon proves that.
Selling books on Amazon means low cost and high returns for sellers. You can typically buy tons of books at once for just a few dollars. These books can immediately be turned around and sold on Amazon with a huge markup. While this isn’t a guaranteed item for some sellers, it can prove profitable if done right.
Baby products also do very well on Amazon. That’s because parents are simply too busy to shop in brick-and-mortar stores. The convenience of selecting items online and getting them delivered straight to their doorstep within days make this niche very popular among tired, harried parents.
Further, Amazon offers high-quality baby products at a fraction of the price as physical stores. To make the most out of this niche, make sure that you sell everything from toys to healthcare kits and diapers.
Sellers are finding that the jewelry and accessory business is doing well on Amazon. Typically, buyers are not searching for high-end items on Amazon; they are looking for cheaper, everyday items that they can pair with outfits daily. Amazon provides them with these solutions without the need to go to a big-name store and pay double the price for the same products.
Even with the cleverest marketing strategies, often the difficult part is finding products that will click with your audience and make you a profit. Here are some tips to help you make that crucial decision.
This is one of the most popular tips experts give any type of seller. If the items you sell do not address a need of your target audience, then no one will buy it. An item that directly addresses a need – paired with the right marketing strategy – will bring you the most profit.
Before stocking an item, read existing product reviews from previous customers There’s a strong chance you’ll be getting similar reviews if you carry those products, so it’s best to be informed about what to expect. Even better, being able to anticipate possible customer problems can help you be more stringent about quality control when you start to carry these items.
When choosing items, profitability should always be your priority. High-end, expensive items may give you a big return, but they probably won’t be flying off your shelves every day. In contrast, cheap items may sell well, but you might need to sell dozens of items to make any real return. In this case, aim for a safe middle ground. Choose items that will give you a significant return but will also be easy to clear off the shelves.
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