This article will cover:
- What is Amazon FBA?
- How Amazon FBA Works?
- What are the advantages of FBA?
- What are the disadvantages of FBA?
- How does FBA charge for sellers?
Table of Contents
What is Amazon FBA?
FBA stands for Fulfillment by Amazon. Sellers ship the products to Amazon, Amazon will help you store your products in Amazon’s fulfillment centers, in addition, they pick, pack, ship, and provide customer service for these products.
How Amazon FBA Works?
With FBA, Amazon will pick, pack, and ship your orders.
Firstly, you have to send the product to FBA
Of course, if you want to FBA process your orders, the first step you have to do is send your products to them. Amazon has about 100 warehouses across the U.S.
Secondly, Amazon stores your products.
Once Amazon receives your products, they will sort your products and store products for you. However, sometimes they make mistakes, in this way, they will reimburse you.
Thirdly, Ship your products to customers.
Once customers buy your products, Amazon will update the inventory for you. Also, they will pack products into a box and ship it to the customer.
Lastly, provide the customer service.
After your customer receives the product, Amazon will follow up customer’s experience with the shipment. And they provide service for returns or questions from customers.
What are the advantages of FBA?
Advantage 1: Enjoy free delivery service
With FBA, your products will be eligible for Amazon Prime free next-day or next-day delivery services. Besides, orders that meet the requirements can enjoy free delivery services, which will shorten delivery time and improve customer experience.
Advantage 2: Shipping Standardization
Amazon process All FBA orders in exactly the same way Amazon handles its own merchandise.
Advantage 3: 7×24 professional customer service
Amazon uses the local language to provide 7×24 professional customer service for FBA products and handles the return of FBA orders. Even if you are on vacation, the products can maintain normal sales. Amazon takes care of all of the heavy liftings.
Advantage 4: Multi-Channel Fulfillment:
Amazon can ship and handle inventory that is being sold on multiple channels, and not just through the Amazon marketplace.
Advantage 5: increase exposure and win the “buy button”
After using FBA, Amazon’s fast delivery service and 7×24 professional customer service will help your products obtain higher customer satisfaction and product evaluation, thereby helping to increase the chances of your products to win the “buy button”.
FBA products marked with Prime. When buyers search for products, they are often more accustomed to filtering products with Prime. In addition, higher customer satisfaction and product evaluation will lead to higher search rankings, which will help increase exposure.
What are the disadvantages of FBA?
Costly Fees: Amazon help you to restore and ship products, Absolutely they charge for you. Amazon charges both fulfillment fees and storage fees including long-term storage fees. You’d better take care of your inventory.
Product Handling Issues by Amazon: Sometimes inventory can get lost or damaged in the fulfillment process. Although Amazon will reimburse you, it is still difficult for the seller to manage. If there are many products, you are not clear about how much Amazon should reimburse you. In this way, some powerful tools can help you.
More Returns: Customers are more likely to make returns with an easy returns process, it is not a good thing.
How does FBA charge for you?
Amazon charges several kinds of fees to FBA members.
1. FBA fulfillment fees
FBA order fulfillment fees is charged per piece, depending on the weight and size of the product.
2. Storage fees
FBA storage fees are divided into monthly storage fees and long-term storage fees
Monthly inventory storage fee
Monthly inventory storage fees typically are charged between the 7th and 15th day of the month following the month for which the fee applies. For example, to see your inventory storage fee for January, refer to the February Payments report for transactions from February 7-15.
Long-term inventory storage fee
A long-term storage fee applies to units that have been stored in an Amazon fulfillment center for more than 365 days.
The long-term storage fee is in addition to the monthly inventory storage fee. If you submit a removal order for items before the next inventory cleanup date, those items won’t be subject to long-term storage fees.
3. FBA removal fees
Removal fees are charged per item removed. Typically, removal orders are fulfilled in 14 business days. However, removal order processing may take 30 business days or more during the holiday season and peak removal periods.
4. Returns processing fee
Amazon will charge a return processing fee for returned products in categories where Amazon provides buyers with free returns. These categories include: apparel, watches, jewelry, luggage, shoes, handbags, and sunglasses
It should be noted that if an order contains multiple products, the return processing fee incurred by the buyer when returning the product may be higher than the total delivery fee, because Amazon charges fees based on shipping only one product at a time.
5. Unplanned services
Unplanned service fees refer to the costs incurred by the seller for certain errors in the products shipped to Amazon, such as labeling. The unplanned pretreatment service fee is also charged on a piece-by-piece basis.
Get a powerful tool to manage your FBA fee!
Conclusion
FBA help all sellers no matter how small to process their inventory and ship their products to customers, they do the hard work for sellers. It is a wonderful choice for business. However, you’d better double-check things before you send your products to FBA, just like whether the goods shipped to the Amazon fulfillment center comply with the FBA product restriction policy
Related:
2020 complete guide to moving excess inventory