The amazon FBA business model is one of the fastest-growing ecommerce models in the world. With amazon’s fulfillment services, you can sell your products on amazon with just a few clicks. You don’t even need to hold any inventory!
If this sounds like something that interests you, then keep reading to find out everything you need to know about amazon FBA: how it works, what product to sell on amazon and more.
What is FBA?
FBA is Amazon’s fulfillment service – fulfillment by Amazon. Amazon has warehouses all over the world in which they store products and fulfill orders for customers on demand.
When you use Amazon FBA, amazon will pick up your product from a warehouse (or multiple warehouses) of your choice and ship it to Amazon where it’ll be stored in amazon’s fulfillment center. amazon FBA is a service that allows you to scale your business without having to worry about warehousing, managing inventory or shipping products yourself!
How does Amazon FBA work?
Before Amazon FBA, you had to fulfill all your orders by yourself. This meant that you needed a warehouse in which Amazon could pick up products from and ship them back out again when an order was made on Amazon. It also meant that whenever someone ordered something from your store or website, the transaction happened two times: once between Amazon and yourself, then Amazon would ship it out to the customer.
With Amazon FBA, all you have to do is send your products to Amazon’s fulfillment center, where they’ll be stored until an order comes in. When that happens, Amazon will pick up the product from their warehouse (or warehouses) and ship it off to your customer with Amazon’s trusted shipping methods.
This way, you don’t need to worry about warehousing, managing inventory or shipping products yourself. Amazon FBA takes care of all that for you so that you can focus on growing your business.
How can FBA be used?
There are several different ways in which Amazon FBA can be used:
- You can send Amazon an individual product (or multiple products at once) for Amazon to store in their fulfillment center.
- You can send Amazon multiple products at the same time and Amazon will put them into a preconfigured box with other items. FBA allows you to easily create new product bundles.
- Amazon FBA makes it possible to sell multi-variation items such as clothing (for example: Amazon FBA allows you to sell a T-shirt in small, medium and large sizes).
While amazon is fulfilling your orders on amazon.com, Amazon also offers the option of adding listings for products which are fulfilled by merchant – meaning that they’re not stored at Amazon’s fulfillment centers. Amazon calls this option Fulfillment by Merchant (FBM).
Merchant-fulfilled products are stored in your own warehouse and Amazon is not involved with the storage, shipping or customer service related to these items.
How much does FBA cost?
There’s a fee for using Amazon FBA. Amazon charges 99 cents per item that Amazon stores and ships for you, as well as a pick-and-pack fee of around 50 cents (depending on the size of your product) to cover Amazon’s costs for picking up your items from their warehouse or warehouses and packing them into boxes.
What are the benefits of Amazon FBA?
Amazon FBA is a good option for Amazon sellers because Amazon offers you the ability to split your daily shipment into multiple boxes, which reduces Amazon’s fees.
There are other advantages of using Amazon FBA:
- You can ship products from any location worldwide.
- Amazon will store and fulfill orders from their warehouses.
- Amazon handles customer service, returns and refunds. This is useful for business owners who don’t want to deal with these issues themselves or hire someone else on a full time basis.
- Amazon has an excellent reputation when it comes to customer service, so FBA is a great option if you want to focus on growing your business and have Amazon will handle all customer service related issues.
- Amazon offers Amazon Prime customers free shipping, which results in more sales for Amazon sellers that use Amazon FBA.
- FBA allows you to quickly add new products without having to worry about complicated issues like inventory management, shipping or customer service.
What are the downsides of Amazon FBA?
The main disadvantage of FBA is the fees you’ll be charged. It will charge an extra referral fee (in addition to your standard selling fees) for Amazon customers to have their order fulfilled by amazon. It will charge you a storage fee for storing your product in amazon’s fulfillment center and also charges per-item fees (for picking, packing and handling). This means that it can be expensive if you’re selling large items or lots of small items.
Another disadvantage is that Amazon won’t handle amazon returns for Merchant-fulfilled products. You’ll be responsible for managing amazon return cases yourself.
Who sells on Amazon FBA?
Many businesses sell on Amazon FBA because it’s profitable. Amazon has a higher market share than any other ecommerce platform and the customers are extremely loyal to Amazon, so selling on Amazon is an excellent option if you want to grow your business fast.
How do you choose a product to sell on FBA?
There are several things you’ll need to consider when selling products on Amazon FBA. First, Amazon will only allow certain types of products.
Here are some questions to ask yourself before choosing a product:
- Is the product legal?
- Is the product in demand? You should be able to answer this question easily by using Amazon and finding out how many people are selling, buying or searching for your product. If there aren’t a lot of Amazon listings available then it is probably not worth selling because Amazon will be able to compete with you easily.
- If Amazon is not the only ecommerce platform selling your product, then it’s unlikely Amazon FBA will offer an advantage over competitors.
- How much are your competitors selling the product for?
- What is amazon’s buy box strategy? (This will affect your ability to win Amazon’s buy box and sell that item).
- Can you source a quality supplier at an affordable price point?
- Is there a high demand for your product?
Successful strategies for selling on Amazon FBA
There is no one strategy that will lead to success because every product is different, but Amazon recommends that you focus on Amazon SEO when using FBA.
You’ll want to include the following elements in your Amazon listing:
- Images of your product using high quality photos with white backgrounds and lots of detail so they are easy for Amazon customers to see. Be sure to use keywords related Amazon the product in image names.
- The Amazon title should be descriptive and use keywords related Amazon your products so Amazon customers can easily find it using search engines like Google, Bing or Yandex.
- Use bullet points to highlight important features of your Amazon listing (make sure that these are also included in the Amazon description).
- Use Amazon reviews to your advantage! Many amazon customers will read the amazon reviews before they buy a product so it’s important that you have positive Amazon reviews. This can be achieved by providing great customer service, shipping quickly and making good quality products.
How to get started with FBA
If you’re interested in selling on Amazon FBA, the first thing you’ll need to do is visit Amazon Seller Central and register for an amazon seller account.
Amazon will ask you to submit your business details, bank information and tax documents before it allows you sell products on Amazon, so it’s important you have this information ready.
Once registered, Amazon will ask for a product inventory list so it can make sure your products meet its standards and criteria. You’ll need to send an itemized list of all the products that you want to sell on Amazon FBA along with other important information.
If Amazon is okay with your product, you will be able to sell it on Amazon. You can ship the products directly from a supplier or use Amazon FBA shipping services to store and fulfill orders for your business.
Kevin David successfully used Amazon FBA
An online entrepreneur who successfully used Amazon FBA to grow his online business is Kevin David. He is the Amazon expert behind AmazonBestSellerSecrets.com who will show you how to launch your Amazon product successfully using Amazon FBA so it beats out competitors, gets Amazon reviews and makes a lot of money.
For more on how Kevin David became a millionaire, check out I Buy I Reviews comprehensive article here.