Are you considering becoming an Amazon seller? Or maybe you already are, but want more information on how the process works and what role Amazon has in managing how you sell your merchandise. An essential part of making online retailing work for you is thoroughly understanding the platform you are selling through. Amazon has proved itself a great platform that can provide you a steady additional income.
You should expect that learning how to use Amazon for your advantage will take some time. There is always going to be a learning curve when it comes to online retailing! But don’t let that discourage you.
One of the first things you will have to decide is whether to go down the Fulfilment by Merchant (FBM) or Fulfilment by Amazon (FBA) route. Unless you profit from or own a prep center, FBA is almost always the best option. It cuts out the middleman, shipment delays, and potential disorganization.
But it also comes with Amazon FBA fees and some other management decisions that will be out of your hands once your products are in an Amazon warehouse.
How are FBA Fees Structured?
Essentially, to use Amazon warehouses and fulfillment, you will need to pay for the services offered. That means that everything from storage to subscription fees will be applied to your products. Some of these are flat fees while others are based on percentages or weight. That’s why it’s important to have a thorough knowledge of FBA fees and how and when they apply.
For example, storage fees will be determined not only by the size of the item but also by the time of year to match with seller demands and the rising need for storage. There is also an individual seller fee of $1 per item, but if you become a professional seller (someone who expects to sell more than 40 items every month), you will be charged a subscription fee instead of a fee per item.
To find a full breakdown of selling on Amazon fees, check out the helpful charts provided by Amazon or read my helpful guide here. Remember that not every fee will apply 100% of the time, so it’s important to keep track of how fees change and how your products will be affected by them.
How Does Amazon Management Work?
Below you will find a quick breakdown of what Amazon FBA entails and what you should expect when you choose to have Amazon manage your merchandise.
First, are the things you have control over:
- Business Name, Contact, and Shipping Information: of course you have control over what your business is called as well as your business’s contact information that allows Amazon to get in touch with you for order notifications, updates, and news. You will also control where the products ship from and important things like whether you are willing to ship internationally or offer special shipping options.
- Seller Page: you will also be able to write your “About Seller” section, which can help customers connect with your business.
- Business Policies: some business policies, such as return and refund policies will be left to the seller to determine. However, Amazon does enforce certain parameters like a minimum 30-day return policy.
And what does Amazon do? Pretty much everything else is handled for you!
- Storage and Management: there are over 75 Amazon fulfillment centers worldwide and this is where your products will be stored. Amazon will ensure these are organized and safely-stored in exchange for a storage fee.
- Shipment: Amazon FBA will also handle the selection, packaging, and shipment of your orders. Don’t underestimate how much time and effort this will end up saving you!
- Payment Management: Following shipment, payment will be taken from the customer and, after the appropriate fees are deducted, the payment will be sent straight to your bank account. This happens every two weeks.
- Customer Interaction: customers will deal directly with Amazon which means they will handle customer service issues on your behalf.
Overall, FBA is the most convenient and cost-effective option available. It will save you time and effort and many of the fees are a lot lower than what private prep centers charge.
What are the Benefits?
There is a lot more to FBA than just fees. Check out these 4 great advantages to choosing Fulfilment by Amazon:
- Prime Eligibility: when your products are managed by Amazon, it means you are instantly eligible for Prime. The effect? Customers will often opt for your products over sellers who are not eligible for Prime. Your marketplace will have better traffic and higher sales.
- Super Saver Shipping: all products managed by FBA are eligible for Super Saver Shipping on orders over $25. That means that customers who don’t have prime or are casual browsers of Amazon are more likely to choose you to purchase from.
- Better Product Rankings: When you are eligible for both Prime and Super Saver Shipping, your products will be placed higher up on the page for increased visibility. This will boost your sales as more customers will come across your marketplace.
- Single Inventory Pool: if you use multiple eCommerce platforms, a single inventory pool will be a huge advantage. No matter where your order originates from, Amazon FBA can fulfill an order from another platform or third-party site. The result is a streamlined and simplified process that requires minimal interaction on your part.
Once you get to grips with how FBA works and the role Amazon has in managing your products, you will quickly realize how easy the whole process is. You will save money and time by choosing Fulfilment by Amazon.