What is Amazon FBA?
Fulfillment by Amazon, also known as Amazon FBA, means Amazon which will pick, pack and ship your orders for you. Amazon says, “You sell it. We ship it.”
While signing up for your seller account, you need to opt for Amazon FBA. After that, all you have to do is create your product listings, prepare your products and send them over to Amazon. They will then ship and manage your orders as they come along. Amazon will also handle your returns and refunds for you.
Benefits of Amazon FBA
- Simplified returns: Amazon will manage your inventory, so you do not have to go through separate channels for it. Amazon will take care of both, your returns and refunds.
- Larger audience: You will not be limited by your ability to not be able to ship your product all around the world. With FBA, you will have access to even remote locations.
- Buy-Box: With FBA, you will have more chances of getting the buy-box for your product. It is a known fact that 98% of sales on Amazon happen from Buy-Box.
- Prime Delivery: Opting for FBA will automatically make you eligible for Amazon Prime 2-day delivery, which means more customer loyalty and larger audience support.
Disadvantages of Amazon FBA
- Additional fees: You need to pay additional fees to Amazon for storing and shipping your product. Which is why, if your product is not fast-selling, you will end up paying more than you earn.
- Tax management: Amazon may do you shipping for you, but taxes, you got to handle on your own. With FBA, the process may get a bit more complicated.
- Attention to detail: Labelling can, after a point, become a job that is both tedious and handful. But if not done with detail, then Amazon may have trouble picking the right product from their warehouse.
One thing to keep in mind before opting for FBA is that you should ensure that your products are compact in size and have a fast sell if you want to avoid paying heavy storage fees. The other thing that you need to know is that Amazon charges separately for both shipping and fulfillment fees.