How does the Fulfillment by Amazon work
In Amazon, the sellers are provided with two different methods to sell products. They include making direct sales and indirect sales. If you are a direct seller, you will be able to go ahead and list your items to sell on Amazon. Then you will be able to handle shipping and provide customer support. You will be taking control over the order fulfillment process. In other words, you send the products directly to the customers, manage the returns and take control over packing and customs.
The indirect sellers store the items that they have to sell at the fulfillment centers. These are large scale warehouses, which are owned by Amazon. When a customer places an order, the item will be picked from one of the Amazon employees, packs it and sends to the customer. The benefit associated with indirect selling is that you don’t need to worry about packing, shipping and customer support. You will also be able to stay away from the pain linked with returns.
With the help of Amazon FBA program, you will be able to send out the products that you have to these warehouses. Then you will be able to let Amazon handle order fulfillment and customer support on behalf of you. All you have to do is to keep the peace of mind throughout the process.
Pros of the program
Now you know about Amazon FBA what is it. With that in mind, let’s go ahead and take a look at the pros that come along with this program.
- You will be able to provide a better experience to the customers.
With the assistance of Amazon FBA program, you will be able to provide a better experience to the customers, without spending a lot of effort. For example, the employees at Amazon who handle your orders are aware of the best packing methods. They also take care of the entire fulfillment process on behalf of you. Therefore, you can forget that part of the sales process and focus more on increasing your leads. It is also possible for you to send out the products to the customers within a short period of time by Amazon FBA Prime program. This will increase your chances of getting gleaming reviews.
- Your product will be higher in the list of search results.
Amzon’s search algorithm prefers those retailers who sell their products using Amazon FBA. Therefore, in the search results such products are higher than those that do not use Amazon FBA. And it contributes to the growth of your sales.
- You don’t need to worry about returns.
Returns can be a nightmare for the Amazon sellers. Many sellers end up with losses due to their incapability of managing the returns. With Amazon FBA, you don’t need to worry about the returns as well. You don’t need to run to the post office or experience any distractions. Amazon will take care of everything.
- You will get benefited by the Amazon brand.
The products that you ship out through Amazon FBA will contain packaging along with Amazon label. Therefore, you will be able to send out the products that you offer with one of the most trusted brands in the world. This can also help you to get an impressive experience.
What you should know about Amazon FBA
Now you are aware about all the benefits that you can experience with Amazon FBA program. With that in mind, you can learn how to go ahead and join this program.
There is some work that you will have to do when you join the Amazon FBA program. For example, you will need to select what product that you are going to sell. This can create an impact on the sales volume that you will be able to make at the end of the day.
You should also take appropriate measures to keep inventory in the stock at all times. When you are getting more orders, the stock that you have sent to the warehouses reduce. Therefore, you should keep on sending more and more stock to the warehouses.
Amazon FBA program will not deliver the best possible results when you just list your products and wait. You need to conduct marketing and advertising campaigns for the products that you offer. Then you can raise the profit margins as well.
You should also be aware about the Amazon FBA fees when you are signing up with the program. You can use an Amazon FBA calculator to get more information about it. There are plugins and you can simply download such an Amazon FBA calculator Chrome and figure out the investment. Then you can understand how to get the best possible results out of your investment in the long run.
The Amazon FBA packaging requirements should also be kept in the back of your mind when you sign up with this program. In addition to that, you should learn that people who live only in some selected countries out there in the world will be able to join this program as of now. Amazon FBA Russia is the latest addition to the country list.
How to join the program
If you already sell on Amazon, then any of your lists can be converted in order to access Amazon FBA.
- You need to log in to Seller Central and go to the Manage Inventory section.
- Select all the lists for which you want to set the Fulfillment by Amazon option.
- Select the Actions option and then install Change to Fulfilled by Amazon.
- Send your goods to the Amazon storage centers. Select a carrier, specify the delivery method. You have access to the Partnered Carrier Program, which can save on shipping goods to Amazon.
Then you just have to monitor the availability of goods in stock and timely respond to customer reviews if they have any complaints about the quality of the goods.
If you use Amazon FBA, you must remember about the three main fees you will pay:
- Fulfillment Fee is a fee that Amazon charges for providing its services for the collection, packaging and delivery of your goods. This also includes payment for returns of products from customers.
- Monthly Storage Fee is the price you pay for the fact that your product is stored in warehouses Amazon. This fee depends on the area occupied by the product and on the size of the product: Standard-size product or Oversize product.
- Seller Fee - commission charged for each unit of goods sold. Its size depends on the category of your product and can be up to 45%.
In addition, you should also add account fees to Amazon FBA commissions:
- Professional selling plan - $ 39.99 per month;
- Individual plan - $ 0.99 for each unit sold (with a total number of goods sold per month not more than 40 units).
FBA fees include other fees. You can learn more about them from this article.
Cons of the program
One of the biggest drawbacks associated with Amazon FBA is the fee. Amazon will be charging around $1.48 in order to pack a single item. In addition to that, you will need to spend $0.60 to store an item. These fees are higher for the larger items.
Another important point is the preparation of goods for shipment to the Amazon warehouse. You must strictly follow the rules of packaging and labeling of your goods, which can sometimes become a real problem. And if your goods are packaged and labeled in Amazon, they will charge you extra for packaging, which will increase your costs.
Other disadvantages of Amazon FBA
- Tracking your products is more difficult - if you have hundreds of products, it’s not easy to control their quantity and the time they are stored in Amazon warehouses.
- Pooled inventory - due to saving space in the warehouses of Amazon, your product can be combined with the same, but sold by another seller; therefore, there is the likelihood of such an error when, instead of your product, the customer receives another product, lower quality or counterfeit.
- Long-term storage fees - if your goods are stored in the warehouse for more than 6 months, the commission increases significantly.
- More returns - since Amazon FBA makes customer returns easier than ever, they do it more often and you should be ready for it.
- Difficulties with tax collection - because Amazon can store your inventory in different states, constantly move it, and you must independently monitor these processes and control the collection of taxes in each state.
But with the right business building, some of the drawbacks can be eliminated.
Now you know all the important details on how to start Amazon FBA. You will also be able to go ahead with Amazon FBA from Russia. That’s because you are provided with all the facilities to manage the Amazon FBA shipment without any hassle. Therefore, you are strongly encouraged to go ahead with this amazing opportunity and get the most out of it.