What is Fulfilment by Amazon?

Most of us know by now that Amazon is the largest online retailer. People often go directly to Amazon when considering a purchase before searching anywhere else. And, when they do implement a search, as on Google, Amazon is usually the top-ranking search result. Now try to imagine coming up with a marketing campaign to o compete with that.

The good news is, you don’t have to. Amazon had provided the means to share that traffic with you.

Additionally, many buyers choose product by FBA sellers instead of merchant fulfilled sellers, even when the price is higher because they know it comes with Amazon’s reliability.

So, what exactly is Amazon’s “Fulfillment by Amazon (FBA)?”

With (FBA) your products are stored at Amazon’s fulfillment centers. They do the packing, the shipping, and the customer service. PLUS, products sold can be eligible for Amazon Prime’s Free Two-Day Shipping, free Shipping, and other benefits provided directly by Amazon.

Now you can automatically market your products across North America.

When you register for an Amazon.com seller account, you can enable FBA for products you list to be seen on Amazon.ca and Amazon.com.mx. This allows you to sell on Amazon’s marketplaces in Canada and Mexico, reaching even more customers.

What it will cost you.

You are charged for storage space and the orders they fulfill. The cost of shipping is included in your fees, with no extra charge for Amazon Prime’s FREE Two-Day Shipping and FREE Shipping on eligible orders. Fees for optional services may apply.

When deciding whether or not to expand your sales via FBA, one step that will help you will be to check whether your products is in one of the categories requiring approval.

If it is, submit the product for approval and go from there. If it isn’t, then you’re ready to start.

Upload your product to the FBA platform, finalize your listing and then box up your products and ship them to an Amazon distribution center.

One thing to keep in mind, your inventory may not all go to one place but might need to be separated among more than one of Amazon’s distribution centers. Fortunately, the FBA platform allows you to pause shipments to wait till you have multiple items ready for the same location.

This will save you on shipping costs. You can save even more if you take advantage of Amazon’s partnership with UPS.

Once your items arrive and are scanned in at the distribution center, they’re live on Amazon. If items don’t sell within the pre-set time period, you can either pay storage fees or have them returned to you at your expense.

As with any new venture, there are pros and cons to weight before making a final decision.

Pros:
8 Enormous Customer Base-As one of the largest online retailers, Amazon’s users are looking to shop.

* Credibility and Trust-buyers are comfortable going to Amazon than an individual ecommerce site.

* Excellent Support-Everything from inventory tracking, tax collection, to credit card processing is already set up with Amazon’s platform.

* Referrals-Amazon’s built-in algorithms include your product in their “recommended purchases” section found at the bottom of product pages. This means a buyer on Amazon get exposure to your product as a recommended purchase. And, Amazon affiliates will also link buyers to your items through blog and social media posts.

Cons:

* Fees-These start at a minimum of one dollar and can go as high as 25% of the product’s price.

* You’re a Commodity-On Amazon you’re mostly a commodity. This means there will be other merchants under cutting your prices. Plus, you’re competing directly with Amazon for any products they sell.

* No Control Over Branding-Unlike on your own site there are few options to promote your own brand.
* Lack of Customer Loyalty-Customers are finding your products due to their loyalty to Amazon, not you.

Some Other Things to Consider. Once you ship your products off to Amazon, you’re no longer in control of what happens to your items. You are, however, responsible for them.

Plan for returned or damaged items. Amazon’s 100% satisfaction guarantee extends to your items, giving your customers additional piece of mind. So, when pricing, you should allow for 3-5% of items to come back that can’t be resold.

A note on keeping your own Ecommerce Website. At this point you may be thinking that this could replace your own ecommerce site. Many experts recommend keeping your existing site as well. The primary reason being, when you sell on other platforms, you don’t actually own your shop.

They will reserve the right to manage your product listings, and not always in a way that is in your best interests. This could even include preventing you from selling within a certain category if they can make more of a profit selling the similar items in-house.

Over all, Amazon’s FBA platform is an excellent opportunity to increase sales and distribution without having to increase your own storage and shipping facilities.

For more information or to get started visit Fulfillment by Amazon now.

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