Beginner’s Guide to Amazon’s FBA Program

Whether you are setting up a new online business through Amazon or want to take your operations to the next level, looking into Fulfillment by Amazon (FBA) can help you reach your goals.

As the name suggests, the Fulfillment by Amazon program allows you to get your online store’s orders fulfilled through Amazon’s own operations. In addition to providing you with benefits such as faster deliveries, improved handling, and better storage, FBA also lets you control the initial set up costs for your business.

This makes FBA an ideal way to scale your business from a starting point. The best part? Enrolling into the FBA program isn’t difficult. This is all the more true if you know exactly what you are doing.

To learn more about FBA, its overall advantages, and its actual execution, here’s a lowdown on how you can benefit from the program.

What is Fulfillment by Amazon Anyway?

If you create or manage a seller account on Amazon, opting for the Fulfillment by Amazon program lets you store, package, and ship your products through Amazon’s warehouses or fulfillment centers.

This means that through FBA, you no longer have to worry about storing your stock in your own space or executing a shipment at every single order. Instead, you can delegate those responsibilities to Amazon’s renowned operations.

But Amazon’s responsibilities do not stop at storage, packaging, and shipping. The eCommerce giant also makes it a point to offer related customer services such as product returns and refunds against its FBA products. This adds yet another level of convenience to your overall activities as a seller.

How Does It All Work?

To start with Fulfillment by Amazon, you need to enroll in the program. After you have set up FBA in your seller account, you can add relevant products to sell on the platform. Any products set up under the FBA program appear with a particular “Fulfilled by Amazon” label when any potential buyer is browsing through Amazon’s product listings.

Once you have added your product listings, you can move forward with shipping your products to the designated Amazon fulfillment center. But here comes the exciting part: You don’t need to go through the painstaking process of wrapping each item individually.

You can instead choose Amazon to prepare your packaging for each future customer by selecting the FBA Prep option. This service comes at an additional fee, but it also provides you with the added promise of ease of use.

After you have prepared your product batch according to Amazon’s guidelines against your preferences, you can ship it to the outlined Amazon fulfillment center.

From there, the eCommerce behemoth takes over the responsibility to store and ship your items against each order. It also handles all return requests. The fees for these solutions are charged according to Amazon’s updated pricing guidelines for the service.

Who Does It Benefit the Most?

Generally speaking, the FBA program is quite helpful for sellers of all scales. Since it takes off the responsibility of back-office operations from your shoulders, you and your team can easily focus on other tasks such as your items’ production and procurement. Against a set fee, it can provide your business with more streamlined operations that are powered by Amazon’s stellar infrastructure.

However, FBA is incredibly relevant to those sellers that run small businesses. It’s because it eliminates the requirement for a large initial investment into storage space, warehouse management, or shipment security. As a result, small business owners can start with a lower start-up budget and scale their operations gradually with the help of FBA and its offered solutions.

This means that if you have a small startup trying to cut back its initial investment, it can heavily benefit from FBA’s fee structure. Since you don’t have to amass a large capital to enroll in the program but still benefit from timely deliveries and handling, it can give you the boost you need to reach your required growth.

Typically, the Program is a Good Match for Sellers of All Types

Whether you operate a large operation or run a small business, the feature of timely deliveries rules supreme. Instead of running after various packaging and shipment models, you can rely upon FBA to deliver each order on time. This helps you much in terms of customer satisfaction and makes sure that you can fulfill the most demanding customers’ demands.

Those products that come under the FBA label also have a chance to appeal more to potential buyers. Since buyers look for the ultimate convenience and comfort in their online shopping experience, knowing that Amazon’s delivery infrastructure handles their products gives them the peace of mind that they need. This especially applies to Prime customers, who expect nothing but the best from the platform and its sellers.

If you plan to use the program for more than your Amazon sales, you can do that too. With FBA’s Multi-Channel Fulfillment, you can sell your products on other platforms such as your own website but still, have your deliveries fulfilled by Amazon. This ensures you can sell your products through more than one avenue, even if your inventory stays in Amazon’s fulfillment centers.

Are There Any Drawbacks of the Service?

As with any other solution, FBA comes with its flaws. In its case, it is the overall fee that you may need to pay over time. Since you are simply renting Amazon’s services and premises for your products’ respective handling and storage, the overtime expense does not contribute towards building any asset for your business.

Your products also remain stored within Amazon’s premises during your FBA enrollment. This means that you need to go through Amazon first if you want immediate access to your inventory.

With that being said, the overall benefits of FBA services outweigh these disadvantages. As mentioned above, this especially holds if you are trying to cut down your initial setup or investment costs.

In any case, looking into Fulfillment by Amazon is an exciting idea for every Amazon seller. Even when you don’t plan to use it in the immediate future, learning more about its details doesn’t disappoint in terms of a helpful reference to grow your business.