What Is Amazon Fulfillment

Fulfillment by Amazon (FBA) is a storage and shipping service for Amazon sellers. It replaces the time sellers spend on sorting inventory, receiving customer orders, shipping products, and processing returns. Rather than storing and shipping the products yourself–or renting a warehouse and hiring employees–you can pay Amazon to do it for you.

When To Use FBA

When you’re wondering, “should I use Fulfillment by Amazon?” know this. Using FBA can sound intimidating to the point that many people put it off until they’re “ready to boom.” This simply isn’t necessary. Even if you are just beginning, FBA can give you a significant head start in your Amazon business. When you sign up for FBA, you instantly receive the prime badge, which improves conversions for your product. You can skip the tedious parts of packaging and shipping yourself, and create a fully automated business right off the bat.

So, the answer to “when should I start using FBA?” is right now. Don’t wait. 

One of the best parts of FBA is that it doesn’t only work for selling on Amazon. FBA also fulfills orders for eBay, Shopify, and Etsy. If you’re selling on Amazon already, it’s definitely worth setting up your product on other platforms to increase the number of sales channels.

Taking that step from kitchen table business to full time brand is exciting, but it’s important to do your research. Make sure you understand the rules and regulations FBA has so that you can work well within them. 

If you are serious about selling on Amazon, pairing FBA with a private label brand is a great path to take. Working with a manufacturer to develop a brand and then fulfilling all your purchases with FBA is one of the best ways to build a secure, and almost entirely automated business. Interested in starting a private label brand? Click here for a free consultation, or read to the bottom of this article.

Pros & Cons Of Fulfillment By Amazon

Pros:

1. Effortless Shipping: Instead of handling every item yourself, send all your products from your supplier directly to the Amazon Fulfillment Center. This frees you from all the technicalities of personally shipping and handling your items.
2. Easy Returns & Refunds: The only thing worse than shipping is processing returns and refunds. Fulfillment by Amazon completely takes care of this for you.
3. Cost: The fees charged by FBA are almost always cheaper than other fulfillment and shipping companies. These glorious shipping discounts can greatly improve your margins.
4. The “Amazon” Name: People trust Amazon. In 2020, people in the United States spent 386 billion dollars on Amazon. When your product is being shipped from an Amazon facility, it will be branded with the Amazon box and carry the Amazon reputation.
5. More Time and Space: Not only do you free up that guest bedroom, basement, or storage unit that you’ve been keeping your products in, you free up the mental space you were using to keep track of, package, and ship all those products. 
6. Amazon Benefits: When using FBA, you get lots of benefits including free shipping to Prime Members, increased odds of landing the Buy Box, and higher ranking and better visibility on Amazon. 

Cons:

1. Preparation Requirements: The Amazon Fulfillment Centers are very particular about how you prepare and ship your items to the warehouse. If you do not follow the guidelines exactly, it can result in delays and extra work for you. 
2. Long-Term Storage Fees: Amazon does not like your products taking up space in their facilities for a long period. If your products have just been sitting on the shelves, you will be charged a long-term storage fee. This is a cost you will need to factor into your decision before choosing FBA.
3. No Logo: While you may benefit from the Amazon branding on the packaging, it’s important to note that your brand and logo will not be on the packaging. If brand awareness is important to you, it might be better to find an alternative that lets you ship with your logo and brand on the packaging.
4. Increased Returns: Because FBA provides such an easy returns process, you may see an increase in the number of returned items. This can be combated by only selling high quality products.

Using FBA

Adding FBA to your Amazon seller account is relatively simple. 

1. In your Amazon seller account, go into Seller Central
2. There you will find an option to set up FBA
3. Create your product listings as FBA inventory
4. Carefully follow the guidelines for packaging and labeling
5. Send all of your products to Amazon fulfillment centers

After the products arrive at the Amazon fulfillment center, they will be safely stored in the facility until a customer buys one of your products. From there, Amazon will quickly send the products to your customers and the good reviews will come pouring in.

While FBA takes care of a lot of the logistics, there are still some things you need to be on top of:

• Automating the process will only help you if you have a product that people want. Make sure to do your due diligence in choosing a good product. 
• Amazon will tell you when your inventory is low, but make sure you always keep your stocks replenished to avoid back orders and unhappy customers.
• You are still responsible for marketing your product. Amazon won’t ship your products if no one is buying them, so take care to optimize your listing and advertise effectively.

Using FBA can free up some of your time and mental energy so keeping tabs on these things should be easier to do, making your business more streamlined and ready for growth.

Private Label & FBA

A great way to sell on Amazon is to create a private label brand. When you develop a new product and brand with a manufacturer, you will benefit from higher profit margins, lower operating costs, greater market stability, and increased customer loyalty. When paired with FBA, selling your brand on Amazon can quickly evolve from a side gig to a serious income stream. 

Here at EcomRanx, we specialize in partnering with people like you to develop private label brands and launch them on Amazon. Give us a call at 801-769-6277 for a free consultation.