Amazon FBA

How to Best Utilize the Power of Amazon FBA

Are you an Amazon seller? If yes, planning to enroll for FBA program? If yes, then this blog is going to explain you the power of Amazon FBA. Today, Amazon FBA has become one of the most common internet revenue-earning methods. Out of the top 10,000 sellers, 66 percent of them use FBA. FBA seller can automate order fulfillment by taking advantage of Amazon’s advanced shipping and fulfillment facilities. So, in this blog post, I am going to briefly discuss about Amazon FBA.

What is Amazon FBA?

Fulfillment by Amazon or simply FBA is an Amazon program where a seller is free from packing, shipping, and delivering responsibilities. In FBA, the seller keeps his inventory at one of Amazon’s fulfillment centers or Amazon’s warehouse located in his area and becomes a prime seller. When a seller gets an order, Amazon picks packs and delivers the products to the buyer. I.e. what encapsulate FBA is: You sell it, Amazon ships it. Also, Amazon manages returns and refunds for you. But, all this comes at a cost and Amazon charges both fees for storage and fees for performance. These charges, however, include Amazon’s stellar 24/7 customer service, the cost of shipping products to buyers, and access to one of the world’s biggest and efficient fulfillment networks.

Why Amazon FBA Matter?

Amazon has over 300 million active customers, with about 90 million U.S. based Prime subscribers. You will be surprised to know that brands specifically available to prime customers are from those sellers who utilize FBA. And as we know that with Amazon, a prime customer spends more money. Records show that an average customer spends $700 annually on Amazon, whereas prime customers spend about $1,300 annually. This means that if a seller uses Amazon FBA, they are more noticeable to the prime customers and thus, can make more money.

How Amazon FBA Function?

Amazon manages all the hard work for you in FBA and makes the working easy:

  1. Send your items to Amazon: Amazon has approximately 100 warehouses across the United States, some of which are more than a million square feet. So, what you need to do is to tell Amazon that which products you are sending to them and then they will let you know to which warehouse you ship your products to.
  2. Amazon will sort your products and store them: Once your products are received by Amazon, they will sort them and add them to their inventory. And your products are securely stored in their warehouse. A seller need not worry about their products if they are under Amazon, as Amazon will pay you if anything gets harmed in their warehouses.
  3. Amazon takes care of your orders: when a customer purchases from you, Amazon will take care of the entire transaction, receive the payment and automatically update your stock.
  4. Your product will ship by Amazon: once the order is placed, one of the warehouse employees of Amazon takes your item from storage, packs it in a box, and send it to the customer.
  5. Amazon will take care of the customer service:  Once the package is received by the customer, Amazon follows up to ensure that the shipment is satisfied. Besides, it will also manage the customer’s returns and inquiries. But it is up to you to react and take action on any feedback you receive on your product listing.
  6. Payment: Amazon sums up all your sales every two weeks, deduct the seller fees, and transfer your earning directly into your bank account.

This is how it works. But to make sure that you are successful, there are few things you need to do.

Responsibilities When Using Amazon FBA: 

  • Choosing the products to be sold: you can sell almost anything you like, but if you want to prevent storage fees then make sure to choose products that are going to sell fast.
  • Keep your inventory in stock: it’s a good practice to frequently verify your inventory levels to ensure that your product remains in stock.
  • Product marketing and advertising: you may not have to do this if you sell highly ranked brand name products. But, if you sell your brand products then you need to make sure that customers can find them. As, Amazon’s catalog contains over 350 million products, so marketing is essential if you want to find yours.