Key points
- Fulfilment By Amazon (FBA) is a solution where Amazon will ship your products to customers on your behalf.
- You can easily register for the service online.
- Fees range from $2.40 to over $100 based on the size of the unit.
- Storage fees are charged per cubic foot starting at 70c up to $2.40.
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The world’s largest online store
The opportunities on Amazon for businesses are endless. The site may look like a maze of mass-produced products, but smaller businesses and individuals can also sell on the platform. In fact, this can be a very appealing option for small business owners, as your products will reach the more than 197 million people who visit amazon.com each month.
However, fulfilling orders can be time-consuming and problematic if you don’t have the right processes in place. Amazon have been able to account for this as well – and it’s a welcome feature for independent business owners everywhere. Recently, the Fulfilment By Amazon (FBA) service became available in Australia and it was met with much excitement. But what exactly is it, and what are the benefits to small business owners? Below we will discuss what FBA is, its pros and cons, and what this means for the world of ecommerce.
What are Amazon ‘Fulfilling’?
Orders for your products. Many businesses are deterred from selling their products on Amazon because the process of packing and shipping products seems costly and complex. Enter Amazon, who have launched ‘fulfilment centres’. This is where sellers can stock their products with all the packing and shipping taken care of. All sellers have to worry about is marketing and complying with consumer regulations.
This feature takes out all many of the hurdles business owners face when selling overseas and to large numbers of customers. With the logistics taken care of, business owners can focus on marketing and perfecting their products.
Benefits
Fulfilment By Amazon (FBA) offers numerous benefits for its subscribers. Firstly, it takes a lot of the pain out of being an online seller because all you have to do is send the requisite quantity of products to their warehouse. It also provides more opportunities for you as a seller. For example, when a seller is looking after shipping, they may choose not to ship to certain States or countries because of the costs involved. FBA makes it easier to sell overseas to a market of customers that’s likely been previously untapped by the seller.
If your products are sent using FBA, an emblem will appear next to your product on the site. Customers inherently trust larger shipping providers rather than lesser-known third parties, and even more so if the shipping service is a branch of the website itself. This alone will likely drive your sales up significantly.
In addition to having your FBA status displayed, sellers who subscribe to FBA also automatically become Amazon Prime sellers. Prime itself has many advantages including unlimited selling costs (a monthly subscription fee rather than a higher fee per item you sell), free shipping for the customer and delivery within 2 days of purchase.
Drawbacks
No service is without its drawbacks, and Fulfilment By Amazon is no exception. As would be expected, there are costs involved in using such a service. FBA has higher fees than other seller models and includes a fulfilment and storage fee. The fulfilment fee ranges from $2.40 to over $100 based on the size of the unit. The storage fees are charged per cubic foot starting at 70c up to $2.40. If you’re not making a high volume of sales, these prices may be difficult to reconcile. Amazon also have strict guidelines around shipping your product to their warehouses. They need to be packaged in a particular way with each product labelled. You are also liable to pay the costs for shipping products there.
How to Start
Like other services on Amazon, setting up Fulfilment By Amazon (FBA) is relatively easy. If you’re not yet an Amazon seller, you can sign up for Fulfilment By Amazon on the site in minutes. If you’re already a seller and wish to upgrade, go to the account info page under your settings and select which membership you wish to upgrade to. You’ll then have to arrange which products you wish to send through FBA, package them and send them off to your closest FBA warehouse.
Fulfilment by Amazon provides opportunities that have haven’t previously been available to online sellers. Determining whether FBA is the right program for you will require you to not only do inventory of the stock you wish to sell, but also estimate customer needs and sales expectations.
