Amazon sellers can choose to go with either FBA (Fulfillment by Amazon) or FBM (Fulfilled by Merchant) while selling on Amazon. With Amazon FBA, Amazon will handle everything fulfillment-related.
From picking and packaging your products to storage, shipping, and delivery, returns and exchanges, customer service, etc. The only thing you have to worry about is getting your products to the Amazon warehouse.
With Amazon FBM, the seller or vendor will himself carry out the fulfillment of his orders and this is sometimes preferred by the bigger Amazon sellers.
Amazon FBA solves a lot of problems for sellers as it takes the worry of the whole order fulfillment process off their hands. This gives them more time to devote to other aspects of their FBA business.
In this article, we will cover all the main elements of Amazon FBA so that you have a clearer understanding of what it encompasses.
Amazon FBA process:
- First off, you will need to conduct amazon product research and decide what you want to sell and where you’re going to source it from.
- The next step is to have your sourced inventory sent to an Amazon FBA warehouse or a fulfillment center.
- Once it arrives there, Amazon executives will organize and store your products.
- When a customer places an order for a product, Amazon will take that product, pack it, and ship it to the customer. There will be logistics in place that will deliver your product to your doorstep or wherever the customer has ordered it to.
- If there are any issues like delayed delivery, damaged products, returns, etc, Amazon will handle all of the customer service issues and tasks.
For a more detailed description, you can read this blog on Amazon FBA and use it as a guide to successfully navigate through the whole process.
Amazon FBA fees
Amazon FBA solves a world of problems for sellers but of course, this convenience comes at a price. The storage fees for your inventory vary according to the time of the year and are billed anytime from the 7th of the month to the 15th.
The fees also vary depending on whether your products qualify as dangerous goods, non-dangerous goods, standard size, and oversize. Calculating your fees could be an arduous task but you can do it easily with SellerApp’s free FBA calculator which gives you precise cost estimates.
Its also important to know that FBA storage fees are calculated based on the size, dimensions, and weight of your products. It will also cost you more if your products are sitting idle in storage and not moving out of the warehouse fast.
For products that are sitting in the warehouse longer than 6 months, the storage fees shoot up. If your products remain in the warehouse longer than a year, that too will automatically cost you more.
This is done with a view to getting sellers to do everything they can to sell their products fast with the help of advertising and the right type of marketing.
If sellers are unable to move their products then they can always pay a removal order fee to get your inventory back or get rid of your inventory. Here too you will be charged according to each item. Other fees are associated with handling product returns, FBA labelling, repacking, etc.
What to sell on Amazon FBA?
Selling on Amazon FBA entails conducting a good amount of product research. You can begin by perusing over the best selling products on amazon on the BSR page. These are products that are generating the highest number of sales and are a good starting point.
These products are popular and are in demand but you should look at whether their seasonal products or not. A certain item may be popular during a certain time of the year. For example, holidays cards and festive lights might be BSR products during the holiday season but they don’t have a great margin during the rest of the year.
You’d want to start with something that is more stable or that can generate a good amount of sales throughout the year so that you can sustain your business.
Some categories of top-selling products that you can look at are:
- Clothing, shoes, and jewelry
- Kitchen and dining
- Home and Kitchen
- Garden and outdoor
It helps to choose items that you can sell at a rate of $25-$100. You can’t price your products too high or too low. Therefore, you have to gauge precisely what products you can sell and they give you a good profit margin while also being economical for the customer.
Amazon FBA is a great way to start selling your products online, especially if you’re looking to make the shift from brick and mortar stores to selling online. Pick your products wisely, calculate all related costs correctly, and always stay on top of your inventory.
It is important to stay up to date with all the changes and updates that Amazon brings about throughout the year. As long as you’re diligent with monitoring your business, FBA can help you maximize your profits like never before.
Arishekar N, Sr. Director of Marketing & Growth at SellerApp, is a specialist in digital
marketing, in addition to website keyword optimization for search engines. His areas of expertise include enhancing the organic & paid ranking of web pages on search engines with innovative SEO & SEM strategies and online promotions.