How Amazon FBA Works

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What Amazon FBA is and how it works

You may have heard of it, however you are still not quite clear what Amazon FBA is and how it works: I'm here to provide you with all the necessary clarifications.

Amazon FBA, where the acronym stands for Fullfillment by Amazon which, translated from English, means more or less for "completed by Amazon", is a service offered by the large online marketplace with the aim of lending a hand to those who sell on the portal as regards the warehouse, inventory, shipping and customer service management.



The Amazon FBA service, therefore, is aimed at those who have a profile from seller active on Amazon: in this regard, I suggest you read my guides on how to sell on Amazon and how to do dropshipping on Amazon, if you need to understand how to open one.

In the city, Amazon FBA is better known as Fulfillment by Amazon and, in essence, it allows sellers who decide to join the program to ship their goods to a Amazon fulfillment logistics center, where it will be stored pending orders. When a purchase is made, Amazon's warehouse workers will take care of packing and shipping the goods to the recipient and then providing him with a method to track the package. In case the buyer decides to make a return or needs assistance, the Amazon fulfillment center will always take care of it.

At the same time, the seller can remain informed about theInventory, that is, on how many of its products are still available for sale at the distribution center.

The Amazon FBA service is a payment, you will have more information on costs in the next chapter, but it is not binding if you want to start selling on Amazon. Alternatively you can choose the solution Amazon FBM.



Amazon FBM, that is Fullfillment by Merchant, means "managed by the same merchant" and is the method by which Amazon gives the freedom to sellers to manage independently all phases of inventory, storage of goods, shipping, return procedures and customer assistance. All this with advantages, from an administrative point of view, but with non-fixed costs, like those of Amazon FBA.

Now that you know what e is how Amazon FBA works, you are ready to know the details of the service.

Amazon FBA Usage Rules and Costs

Given the fact that you were really planning to start selling on Amazon, I bet you are very interested in Amazon FBA usage rules and costsHere, then, is all you need to know on the subject.

If you have not yet opened your Amazon store, you can do so, among other things by taking advantage of promotional initiatives often available to new customers: for example, the FBA new selection program, otherwise called Amazon FBA, allows all users who register for the first time to access discounts and free services for the management of goods by Amazon. Here are, in detail, the points of the offer.

Since the core of the Amazon FBA program is the logistics center, you, as a seller, will have to send your goods to us. In this way it will be immediately ready for the final packaging and sending to the consumer, carried out by Amazon, when the latter makes the purchase of one of your items. The first offer for new subscribers to the Amazon administered logistics system, who operate as sellers in the European marketplace of the system (i.e. in cities, Spain, France, Germany and the United Kingdom), provides for the free shipping up to 90 € of materials at a sorting logistics center, with Amazon affiliated courier.



But it doesn't end there: yours first 50 products us standard dimensions they will be stored monthly by title free, Up to 90 days from receipt of the first item. Furthermore, after the first supply received (inventory), the removal of one of the aforementioned 50 products, will be free for up to 180 days. To make sure that the whole process "runs smoothly" and Amazon can arrange your goods in a safe place as quickly and efficiently as possible, read the rules for receiving and storing your inventory provided by the marketplace itself, by connecting to this link.

Does your merchandise include large products? If you sign up for the Amazon FBA program for the first time, you will be eligible for free storage of the first 30 non-standard products for 90 days, upon receipt by the Amazon fulfillment center of the first unit. Always for 180 days, starting from the storage of the first unit, the removals concerning the same 30 large products already stored will be free.

Sell clothing, shoes, bags and accessories di standard dimensions? By joining the Amazon FBA program you will be able to store i first 100 pieces within a logistics center free for up to 120 days, starting from the receipt of the first pack from Amazon. Under the same conditions, for 180 days, Also removals of these 100 products will be free. But that's not all: you can have the processing available free of the first, if any, 20 returns from customers, who will return to the relevant Amazon fulfillment center within 180 days from the first item stored in the warehouse.



Basically, with the new Fulfillment Amazon program, the entire startup phase of your business as a seller will be free, as regards the management aspects of the goods. In contrast, with the “traditional” FBA program, the expense would amount to 96,92€. Find more info here.

How to sign up for Amazon FBA

Once you have received the necessary information, what you need to know is how to sign up for Amazon FBA: here are the instructions.

To start, from PC, linked to the official page of FBA new selection program, read the directions and scroll to the bottom: you will find two buttons. Choose the button subscribe now, if you already have an Amazon profile that is eligible for sale, otherwise choose the button Register to create your Amazon store, deciding whether to sell throughout Europe, at a cost of € 39 per month: read carefully my guide on how to open a shop on Amazon, to know all the steps to take.

I remind you that, in order to sell on Amazon as a professional, you will need to be in possession of the VAT number, in addition to the other personal data requested. In addition, new sellers and existing sellers with an inventory performance index score will be eligible to participate in the FBA New Selection Program higher than 400, to be maintained (or increased) even after registration, under penalty of exclusion.

Once your Amazon store is active, from the section of your profile named Seller account information, locate the card Your services and click on your voice Manage.

On the page that opens, select the item Fulfillment by Amazon and then click the button Subscribe. On the next screen you will find a summary of your details: check that they are correct, then click on the button Complete registration.

Next, to sell your products using Amazon FBA services, you will need to create an FBA offer: to do this, choose the tab Manage your inventory, select the products you want to sell, then click darts symbol placed next to the item Modification, in correspondence of each selected article. A drop-down menu will open in which you will have to select the item Add offer with other condition.

Having done this, from the section Advanced view, complete the form Share your available inventory, selecting the item Unique offer, entering lo SKU of the product preceded by the term FBA_…, selecting a truthful voice that describes them condizioni and entering the price including shipping. Finally, check the item In the event of a sale, I want Amazon to handle the shipment and provide customer support and click on the button Save and finish.

The last steps you will need to take, to use the Amazon FBA service, concern the labeling of the packages to be sent to the Amazon fulfillment center, from the Manage Inventory and Labeling Service. Well, if your products have a clearly visible EAN code, you can choose the items Refuse the labeling service > Yes I accept. If not, you will need to check the items Accept the labeling service e No, I refuse and print the labels that Amazon will provide you in PDF format. Click on the item Confirm your selections. Finally, in the tab Convert to Fulfilled by Amazon, click on the item Completed.

The game is done: send the products to the Amazon sorting center and, if deemed suitable, they can be enabled for the Amazon Prime service, for registered users and when they are purchased it will take care of everything Amazon, from shipping, to customer assistance up to a possible return.

After registering as a professional seller on Amazon from PC, I remind you that you can manage the same flow just described from the app Amazon Seller, available for devices Android on the Google Play Store (or on an alternative store, if you don't have Google services) or on the App Store for iPhone o iPad.

Pros and Cons of Amazon FBA

To conclude, now that you have a clear understanding of how the service works, I would like to invite you to make some evaluations on pros and cons of Amazon FBA.

Choosing to join the Amazon FBA program comes with undeniable ones advantages. Starting with the fact that you will be able to concentrate as much as possible on the activity and on the selection of products to sell, since Amazon will take care of the rest.

Another not secondary aspect is the possibility of making use of Amazon fast shipping, in particular products managed with Amazon FBA will be able to be shipped according to the formula Amazon Prime, to all those users who have subscribed to the service. This will only increase yours authority as a seller and customers will probably start buying from your shop more and more often.

The latter, moreover, will also be able to enjoy a assistance service active 24 hours a day and a facilitated service for i returns, again thanks to Amazon. Not to mention that, whoever joins the Amazon FBA program will be favored by the algorithm internal to the marketplace, which will make its offers appear before the others, making them easily identifiable by potential customers.

However, there are also some less exciting aspects, which could represent some disadvantages: for example, after the discounts and promotions for new entrants to the Amazon Fulfillment Program have ended, it will be necessary to pay a percentage to the marketplace, calculated based on time in which each product remains stationary at the distribution center and its own dimensions.

You must follow the instructions given by Amazon to send the goods to the logistics center, otherwise the employees will think about standardizing the packages, but with a additional cost. The goods must be sent to the buyers in the boxes with Amazon logo, always remaining somewhat anonymous.

In addition, you will have to take into account any delays in packing and shipping in high season periods (for example around Christmas) or during promotional sales announced by Amazon, in which the amount of work to be managed grows exponentially, due to the increase in orders.

Finally, you will not have the buyer data, such as their email: this will not allow you to carry out marketing operations and write one mailing list. In this regard, read my guides on how to do online marketing and how to do email marketing.

At this point, I hope I have been helpful and made you understand how Amazon FBA works and I hope your business gets a boost, thanks to Amazon's Fulfillment Management Service, universally known for being one of the best out there.

How Amazon FBA Works


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