Are you an entrepreneur managing a small or medium-sized business and want to improve your international reach? Does your manufacturing or wholesale business involve exporting goods across the world? You must explore Amazon FBA, the massive fulfillment network of Amazon that addresses tasks like storage, shipping, handling the inventory, and the other basic operations on behalf of the seller. In the meanwhile, the seller can focus on the other aspects of the business, but, the Amazon FBA service is paid. The price of shipping is 30% less when aligned with the FBA services as compared to the standard shipping fee charged by other service providers and 70% less shipping cost can be experienced with FBA premium plans.
Whether you are a prominent Amazon FBA seller or a beginner, here’s a detailed analysis to address your custom business needs. We will be discussing the strategies to optimize FBA services and cover the insights related to business success through these services.
What is Amazon FBA?
Amazon FBA (Fulfillment by Amazon) is a dedicated service by Amazon that processes your order. As a part of this service, the products can be stored in the FBA network of Amazon centre to address the order processing task on your behalf. The flexible shipping options can also be offered to the Amazon Prime subscribes for convenient accessibility. Besides, the free shipping option can also be provided to the customers by choosing Amazon FBA services.
From addressing the packing, shipping, order management, and handling returns to the comprehensive order processing is handled through Amazon FBA service. Your business gets benefitted through this fulfillment by Amazon by witnessing the increase in sales records and reducing the excessive costs. In fact, the time saved in order processing can be invested in the business growth goals.
The comprehensive automated services of Amazon FBA currently offer multi-channel fulfillment. This automated supply chain (FBA) allows the seller to manage the order fulfillment through their website or other sales channels as a part of MCF.
How does Amazon FBA function?
You need to follow the step-by-step methodology to ensure the smooth functioning of FBA caters to your business goals –
Identify the right delivery option
As a part of this step, whether delivery of a specific product has to be handled by FBA for order fulfillment or all the products need to be delivered, should be checked. You may also choose multi-channel orders for fulfilling order delivery.
Products should be added to FBA
The products to be sent to FBA should now be added to the seller account. All the products being sent to FBA should be verified after being added to retain accuracy.
Check if everything’s set for order shipping
If you want the shipping of your product to be handled by FBA yet, it remains at the warehouse, then, it should be packaged & labeled properly for secure delivery.
Products need to be shipped to Amazon
After the products get packaged and labeled, these can be sent to the Amazon fulfillment center to address the further Amazon FBA steps of shipping & delivering the product.
Tracking & managing the order
With the help of the FBA dashboard, you can track & manage your products and inventory through its easily accessible options. The regular assessment of inventory and reduction of long-term storage costs becomes convenient with the Amazon FBA dashboard.
Know How to become an Amazon FBA seller
Here are some of the important steps that will help you in becoming an Amazon FBA seller:
- Register for an Amazon seller account and select the plan that suits you the best
- The selling account should be enrolled with FBA
- New listings should now be prepared for the FBA account while existing listings should be converted to FBA
Steps to register for FBA
- The seller’s central account must be navigated
- The gear icon should now be clicked to access the account info option
- Select the manage button from the seller account information page
- Navigate the register with the FBA option and get started by following the steps mentioned on the screen
In order to register for FBA, the seller should meet all the requirements mentioned by Amazon FBA in its terms & conditions section. Additionally, the specifications related to adding inventory in FBA are mentioned by Amazon.
Amazon FBA Calculator
The selection of a suitable fulfillment strategy is essential to get insights into business expenses while knowing its impact on earnings. Particularly as an Amazon FBA seller, the insights indicating the profitability of products and their sale can be tracked & managed through the Amazon FBA calculator. As a result, the projected costs and profits of FBA can be compared with the in-house order fulfillment approach.
Amazon FBA Benefits
- Economical: As compared to the standard shipping options provided by the many US service providers, the FBA shipping costs are 30% lower. Besides, the FBA shipping options are 70% lower for premium services.
- Multichannel fulfillment options: The market reach can be expanded through the multichannel fulfillment options of Amazon FBA. This option enables the seller to streamline business operations, reduce costs, and address shipping regardless of customer’s source of purchase.
- Improved sales: The web presence and sales of the brand increase as FBA offers fast & reliable delivery options. The prospects of repeat sales are also offered through FBA through which the timely delivery of essentials is provided with a subscribe and save option.
- Time-saving solution: From addressing customer inquiries, order processing, and managing returns to undertaking packaging & labeling, the FBA offers a comprehensive and time-saving solution. This enables the sellers to focus on the other aspects of their business.
- Streamlining operations: Amazon FBA provides multiple order fulfillment services to help sellers streamline their operations. For instance, the benefits of Prime delivery through Amazon checkout help sellers manage convenient order fulfillment.
Amazon FBA Disadvantages
All the sellers have unique business requirements, hence, it is essential to know how FBA services may not be suitable for some businesses. Here are some of the important steps to focus on:
- Fee charged for Amazon FBA services: To address the comprehensive order fulfillment aspects like monthly storage, picking, packing, shipping, and long-term order fulfillment, Amazon FBA charges an additional fee. Based on the sales volume, sufficient inventory, and profits earned by the business, the FBA services should be assessed. In short, if the fees of FBA are not cost-effective according to the revenue generation of the seller, then, this will not be a profitable option.
- Knowing the inventory status can be tough: The availability of the product and the pace at which it should sell must be known to keep the supply intact. However, when the products are stored in the fulfillment centers, it might be tough for the sellers to know whether the inventory needs to be increased or what’s available in the stock. Moreover, the ratings of your product will be lowered by Amazon if it goes out of stock. This will affect the visibility of products and decrease sales. Thus, it may be very tedious to know how to meet customers’ requirements when access to inventory is not available through FBA.
- Need to create product requirements: It is essential for a seller to package and label products properly prior to their submission to Amazon for FBA. Amazon requires this step to be fulfilled before sending them to distribution centers. Thus, this can be very challenging for some sellers to attain this order fulfillment for all the products individually.
- Amazon FBA is not available for free trial: If sellers are not sure about the compatibility of Amazon FBA services, then, it might be a loss for them. Hence, choosing FBA services should be a practical decision as it does not have a free trial.
Conclusion
Increasing sales and optimization of business while expanding the customer reach can become easier for businesses through Amazon FBA services. This order fulfillment service has multiple benefits such as trusted customer experience, improving the rank of products, a vast order fulfillment network, and helping sellers manage their business smoothly. However, the advantage and disadvantage should be equally assessed by the business before investing in Amazon FBA services.