Fulfillment By Amazon: How Does Amazon FBA Work?

In 2021, there were over 200 million people who were subscribed to Amazon Prime.

If you want to take advantage of all of these Amazon customers, you might want to look into Fulfillment by Amazon (FBA).

But how does Amazon FBA work? Keep reading, and we’ll fill you in on all you need to know and why it’s great for your business.

What is Amazon FBA?

Amazon offers its fulfillment service to third-party sellers. It’s a great way to automate shipping and order fulfillment. The concept is very simple. You just have to sell the product; Amazon will ship it for you.

However, you have to be enrolled in that program to have Amazon handle it. In addition to shipping, Amazon will also handle all the refunds, returns, picking, packing, and storing them in the warehouse.

You will have to pay Amazon fees for this service, but it could be cheaper than having to do it on your own.

However, this may not be a great option if you’re selling items that are low in value or very large. The fees might not be worth it to ship those items.

If you’re a small business, this can be a great way to help grow and scale your business for an online platform. You’ll be able to focus your attention on other aspects of your business while you count the money Amazon sends you.

How Does It Work

When you sign up as an Amazon FBA business, you’ll have to figure out what selling strategy you want to use when you list your item for sale on Amazon. If one strategy doesn’t work, you can also switch your fulfillment method when you need to.

Once you get your product, you’ll send it to the Amazon warehouse. In order for people to buy your product, you’ll have to run your own product marketing. You’ll have to pay a storage fee, and these fees depend on how much you’re storing and how much space the items take up.

Then, when a customer places an order for your product on Amazon, Amazon will handle the transaction from there. They’ll update your inventory and then pack and ship the product.

If a customer has feedback or needs to do a return, Amazon will handle the refund and customer service as well.

After two weeks of working with an Amazon FBA, Amazon will send you profits that you made from your sales.

If you still aren’t sure how to work with this process, you can also hire an Amazon FBA specialist to help you out!

Benefits

At first, you might be deterred by all the fees you’ll have to pay when signing up for this program.

But for new businesses, this can be a great way to grow, and you’ll enjoy all kinds of other benefits as well!

Focus on Other Aspects

When you have an Amazon FBA handle all of your shipping, packaging, and other tasks, you’re able to focus on growing your business. You’ll be able to grow your online or in-person store.

You also won’t have to pay to store all of your merchandise in your living space or small office. In fact, you could even work remotely without needing a warehouse.

You can now focus on other things like SEO, partnerships, online advertising, keyword research, product development, and more!

Lower Shipping Costs

With lower shipping costs, you’ll also have a lot more money in your budget to grow your business.

When you ship an item on your own, you’ll have to consider the size, weight, designation, fuel purchases, and agreements with carriers. Even if you’re only shipping a small item, these costs can add up.

Since most customers expect free shipping, it’ll be hard to keep up with demands. That’s where Amazon can help. They can offer free shipping to customers for your products.

And all you’ll have to do is pay Amazon’s fees! These fees will be less expensive than managing the shipping on your own, especially if you’re not well versed in shipping logistics.

More Visibility

While you’ll still have to do your own marketing to get your product out there, Amazon can give you a lot of visibility.

The FBA program can help your products show up higher in search results. That’s because, with an FBA, your item comes up with the actual price of the item. Without the FBA program, your product will come up as the cost of your item plus your shipping costs, which may deter some customers.