If this is the first time you have found Amazon FBA, PLEASE DON’T WORRY.
In this guide, we want to make sure you understand how it works.
Become a seller with Amazon’s Fulfillment-by-Amazon (FBA) program, Jike will immediately provide you with the most comprehensive and step-by-step guide to help you selling on Amazon FBA.
What is Amazon FBA?
Fulfillment by Amazon is a service offered by Amazon, which acts as a means for third-party sellers to automate their order fulfilment and shipping services. It's a very simple concept: sellers sell, Amazon ships.
Anyone who signs up for Amazon FBA can take advantage of FBA business and let Amazon handle all shipping, including returns and refunds, as well as all sorts of issues such as warehousing, picking and packing of products in Amazon's warehouses.
Sellers send their products to Amazon, which stores everything and then processes all orders as they come in. As long as you process the sale and make sure Amazon keeps your products in stock, the rest is done for you. You will need to pay Amazon fees for this. You will receive the following services:
- 24/7 Amazon customer service
- All fulfilment and shipping costs included (picking, packing and shipping)
- Access to one of the most brisk fulfilment networks in the world
The fact that Amazon is the giant in online retail and fulfilment is acknowledged by all. COVID-19 and the resulting pandemic will only increase the use of the Amazon platform, which has over 300 million active customer accounts worldwide.
Keep in mind that FBA may not be suitable for low value items, large sized items or other situations. While it offers a lot, it is not a guaranteed solution for every seller. How can you decide? That's why we're here.
Let's take a quick look at the history and evolution of the platform, then we'll delve into its features, pros and cons and more.
Advantages and disadvantages of FBA business
When deciding whether FBA business is the right solution for you, you will need a list of pros and cons. After all, it's the way to make all the best decisions and it's a great way to give you an idea of what's best for your situation. After a thorough review of the platform and its products, here are the best pros and cons we have to offer for your consideration.
Advantages of FBA business
While this is not a complete list (it would take more time and space), here are some of the most important things about FBA business for us.
- Easy shipping and logistics: Amazon does all the work for you. You just keep track of your listings, make sure they are stocked on the products and have fulfillment taken care of from start to finish. For a small fee, you can lighten the load.
- Discounted shipping: Because you're working with global fulfillment giant Amazon, you'll also spend less on shipping through the FBA platform. So even if you pay fees, when you factor in shipping savings, they can be lower than you think and still be cheaper than managing your own shipping and in-house fulfillment.
- Returns management: In addition to sales, FBA also handles returns and refunds, as they are considered part of the fulfillment process. This gives you one more thing to do on your plate.
- Customer service management: Amazon offers its own customer service for FBA sellers. You can also use their FBA platform for your own customer service needs, routing all your services through one platform for easy management.
- Fast delivery: Products in FBA automatically earn the Prime badge and qualify for Prime free shipping (to customers) and delivery times. In addition, you don't have to pay or charge extra for this, as it is included in the service.
- More storage space: How much stock can you actually store if you don't have FBA? Do you have a warehouse or do you have a rental option? Do you have the capacity to move and manage inventory at this scale? This is where Amazon's logistics program really wins. You essentially have access to unlimited storage space - for a fee - because Amazon has warehouses all over the country where you can store many items.
- Omnichannel Fulfillment: Not only does FBA allow you to sell your products to your target customers through the Amazon platform, but you also have access to a new multichannel fulfillment solution. the MCF service (or Amazon Multi-Channel Fulfillment) allows you to sell your products on a variety of platforms and channels (such as BigCommerce and eBay) while still allowing Amazon to fulfill them.
Disadvantages of FBA business
Because no two people are the same, it's important to understand the potential reasons why FBA business may not be the right solution for your needs. Here are some factors to consider.
- Cost: For those trying to get started, money is everything. fba is indeed a very convenient service, but it costs money. Some people may not need to spend that money yet. Also, due to the way the fees are calculated, this service is not suitable for low-priced items, so you need to be selective about the products you sign up for. Fortunately, Amazon has a handy FBA calculator that can help you see if this is a profitable move.
- More returns: In many cases, some sellers are seeing an increase in the number or frequency of returns. This is partly due to Amazon's open returns policy. While this may affect profits, Amazon takes care of it, so it's not the end of the world. While Amazon used to send returns back to them and you had to arrange for them to be forwarded to you, Amazon is making changes to allow returns to be returned directly to your facility.
- ng-term storage fees: Amazon doesn't like to stay on the stock. Therefore, you will pay more for something that sits longer. Long-term storage fees are not the end of the world, but you must include them in your ongoing budget to ensure that FBA business still makes financial sense for your business goals. They also don't like storing products that aren't actively selling and will charge for it, as well as adjusting your metrics negatively.
- duct preparation requirements: Amazon has its own list of requirements for products entering the warehouse to be fulfilled via FBA. You must ensure that all products are prepared accordingly before sending them to Amazon, including how they are packaged, ensuring they are labeled correctly and shipped in accordance with FBA inventory warehousing guidelines.
- es tax: Sales tax is administered at the state level. If your business does business in one state and stores its items in another, you may not be sure which tax rate to use. Fortunately, there are tools to help automate various tax situations and rules to help you determine what to charge, and Amazon can manage most of it for you.
- business fee payments: There are no delays in what you owe Amazon. You cannot use the next sale to pay for the previous one. Amazon will deduct all fees owed to them before paying you. If you don't have enough of a balance to pay for a charge? You will need to provide a credit card to cover the balance.
Tips, tricks and strategies for maximizing FBA sales
This platform is nothing new. For you, it means gathering a wealth of valuable insights to help you maximize FBA business sales right from the start. There's no need to own a brand name or have a brand-new product. If you want to use this service to increase profits and streamline growth, keep the following tips and strategies in mind.
- the online analytics tool.
Use online analytics tools to conduct product research on the most profitable products and popular items on Amazon - and determine which are the best-selling product categories. There's a reason why bestsellers are at the top - take notes.
- ose your products wisely.
Consider sales rankings, but also the return you get. Top-ranked products are competitive, but they will sell quickly and keep stock flowing. Lower-ranked products may lead to inventory stagnation and long-term expenses. However, with less competition, they may also give you the opportunity to become a leading seller. You must weigh up the options yourself.
- dle items whenever possible.
One of the most difficult parts of Amazon is competing with dozens of virtually identical listings that may have only a few reviews or a few dollars difference in price, but are otherwise unrecognizable. Stand out by creating bundle listings that grab people's attention and offer more value for money.
- ld your brand.
You can't just sell a bunch of stuff and hope for the best. You must take the time to create your brand and place it in a position where it will create success and appeal to your target audience. This isn't just about being in the buying box. It's about making sure you're selling quality products and that you're sourcing them from a reputable manufacturer or distributor. You need to ensure that you get good reviews of your products to ensure that your metrics qualify for the buy box and maximize your chances of making a sale.
- wer your users' questions.
Overall, one of the biggest factors in choosing a seller on Amazon is how responsive and engaged they are when provoked. If users have questions, answer them promptly and politely so that everyone knows you are there when they need you.
If you want to know the exact FBA process, please contact us, either by sending us an email or by contacting our online customer service and we will help you for free!