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Today, starting an online business with Amazon FBA has become very easy. You can start by selling a wholesale product on Amazon, something made by yourself, or even something you no longer need. Everything can be sold on Amazon that fits Amazon selling guidelines.
A seller can start doing business in two ways: via FBM (fulfillment by merchant) or FBA (fulfillment by Amazon). IN FBM, a seller can list the item and start the business. Once he receives the order, he must fulfill it through a third-party shipping company. While in FBA, the seller forwards the inventory to Amazon, and when he gets the order, the Amazon team fulfills it.
Check out FBA vs FBM pros and cons for quick analysis between them.
Let’s start exploring FBA:
What is Amazon FBA?
FBA stands for “fulfillment by Amazon.” It means you sell, and Amazon ships.
Amazon has created a strong network of delivering products to customers in a highly advanced and systematic way. It is beneficial for the merchants and satisfactory for the customers.
Amazon FBA Business Model
- You send your products to Amazon.
- They store them in their warehouses.
- When a customer orders one of your products, Amazon picks, packs, ships, and tracks the order for you.
- They also handle returns and refunds.
New to the Amazon FBA business and need help managing your Amazon seller account? Don’t worry; we are ready to help. Contact us for Amazon account management services information.
Pros of Amazon FBA
- Effortless Logistics & Shipping: If you have ever managed your inventory, you will know that it is a time-consuming process, and you must take care of many things simultaneously. But with Amazon FBA, you will experience effortless and reliable shipping. It will save you time and effort to spend on packaging, labeling, and dealing with 3rd party shipping companies.
- Amazon Prime: When using the Amazon FBA service, your listing automatically qualifies for Amazon Prime. Customers love fast shipping; your product will be delivered faster to customers who order it. A prime badge tag on your listing will increase the conversion rate for more sales.
- Win the buy box: The Buy Box has a “Buy Now” button. For new FBM listings, Amazon does not offer the buy box quickly because of low trust issues. But, with FBA, your listing gets a Buy Box from the first day it is activated. Because Amazon has your product inventory, it ensures the delivery of the product to its customers.
- Multi-Channel fulfillment: With Amazon’s Multi-Channel fulfillment option, you can grow your business without limitations. Amazon offers you its world-class service of picking up your orders, packing them, and delivering them to their destination. No matter from which channel the order is placed. You can get it delivered by Amazon. This makes Amazon FBA the best service provider.
- More Sells: If you win the buy box on FBA seller, plus if you’ve added Amazon as a new channel to your existing eCommerce approach, you will get more noticed by the customers, and your sales will increase automatically. In this way, you can earn a lot of profit.
Cons of Amazon FBA
- FBA Costs More: Amazon charges both storage fees and fulfillment fees. You need to consider how frequently your stock moves and whether it is giving you more profit than the price you are paying. Otherwise, it can be problematic for you.
- Long-Term Storage Fees: Amazon charges you more if your stock is kept in the warehouse for over six months. Amazon ensures the stock moves fast; otherwise, you will be charged high storage fees.
- You May See More Returns: As Amazon offers its customers easy to return policy, the rate of impulsive buying customers & test-buyer customers increases who purchase products on a trial basis. Because of this, the number of returns also increases, making it difficult for the sellers to manage the returned products.
- Shipping Preparations Can be Complicated: For FBA, we need to deliver our inventories to the Amazon warehouse. This process can be complicated and stressful, as Amazon is very strict about packing and labeling. We must pack and label our products separately under Amazon’s ASIN/UPC system.
So, these are some pros and cons of Amazon FBA business model.
Now, Let’s discuss, How to Sell on Amazon?
Selling on Amazon
Amazon offers free 2-day shipping through Amazon Prime. It’s one of the main reasons people shop in the marketplace. Free 2-day shipping is now the standard for all online sellers. If you are a seller on Amazon, you can also take advantage of these benefits to satisfy your customers with the best services by using Amazon FBA. Finding the right supplier is the key to business success, so sellers must find the top Amazon suppliers.
Amazon FBA is an innovative and cost-effective way to ship your items. While you pay a fee for this service, you provide customers with industry-leading logistics to ensure their package arrives on time.
How to Sell on Amazon?
Selling on Amazon is very simple and easy for all kinds of sellers. Amazon provides you with tools and services to reach millions of potential buyers. Take the help of the Amazon keyword research tool and product research tools to Find Trending Products for Amazon FBA.
Follow the steps below to learn how to sell on Amazon:
1. Register Your Sellers Account
First, you need to create an Amazon Seller account. All you need is your tax information (GST Number & PAN, depending on your category) and an active bank account.
After this, your account will be created, and you’ll have access to seller central.
2. Upload Your Listings
Once you have your account, list the items you want to sell. Note: Amazon listing management is the most crucial step. If you don’t know what to sell first, find some things you want to get rid of around your house.
You can add the product’s price to what you feel is the best and also add a product description that should not be too descriptive. Click a picture of the product, and you are good to go.
3. Send Inventory to Amazon Warehouse
After listing your product on Amazon, you need to send your product to the Amazon warehouse. Amazon keeps your product in more than one acre of its fulfillment centers.
The fulfillment centers are like massive warehouses run by robots and hardworking Amazon employees. And if something is damaged in one of Amazon’s warehouses on the off-chance, Amazon will reimburse you the total retail price for the damaged goods.
4. Amazon Will Fulfill It
After the inventory is sent to the warehouse, when a customer places an order on Amazon for your product, Amazon handles the transaction for you. The entire process is automated.
Next, your product is picked from its place on the shelves, packed into a box, and shipped to the customer on your behalf.
After your product arrives at the customer, Amazon follows up with the customer to make sure everything is okay with the order. And, if any need to be made, Amazon automatically takes care of that, too.
5. Receive Payment from Amazon
Once your product is listed on Amazon, you have to sit and wait for your products to sell. The payments of your sales are deposited in your account every 14 days after deducting the cost of Amazon seller fees.
Following these simple steps, you can quickly start your business online on Amazon. All you need to do is get created once and see your business grow. Feel free to contact us for the Amazon FBA research service.
