If you’re going to outsource your fulfillment, Amazon is a pretty safe bet. The e-commerce giant has not only been around the block when it comes to navigating the challenges of fulfillment and last-mile delivery — it pioneered the fast, convenient shipping consumers now expect from every online retailer.
In 2020, nearly half of all American selling partners took advantage of Fulfillment by Amazon (FBA), through which Amazon stores, picks, packs and ships orders for sellers from fulfillment centers around the world, lowering shipping costs by 30%. What’s more, Amazon even claims sellers can achieve a 20-25% increase in sales after adopting FBA.
So how does it work? And how can you join the many other Amazon sellers who take advantage of FBA?
How Fulfillment by Amazon Works
In classic Amazon fashion, the marketplace giant has made onboarding with FBA super simple with four easy steps:
- Create an account. Set up your FBA by creating a seller account (if you don’t already have one) and logging in.
- Choose your products. Create your product listings and specify which ones will be part of FBA inventory.
- Prepare for shipping. Prepare your products for safe transport to an Amazon fulfillment center, making sure to follow the company’s packaging guidelines and shipping and routing requirements.
- Ship to Amazon. Print your Amazon shipment ID labels and ship your products to Amazon fulfillment centers.
That’s it! Once Amazon receives your shipments, the items are available to buy. Need more help? Watch this convenient video from Amazon to help you easily onboard to FBA.
How Much Does Fulfillment by Amazon Cost?
As usual, it depends. Amazon charges different amounts for FBA based on the product type and size. This manifests in six different types of fees, including:
- Inventory storage fees based on your daily average volume of inventory measured in cubic feet
- Long-term storage fees for all items stored in a fulfillment center for more than 365 days
- Fulfillment fees for picking and packing your orders, shipping and handling, customer service and product returns
- Unplanned services fees when inventory arrives at a fulfillment center without proper preparation or labeling
- Removal order fees for returning or disposing of your inventory in a fulfillment center
- Returns processing fees to provide customers with free return shipping
Not sure about the cost? Amazon offers a handy revenue calculator to help you estimate your FBA fees so you’re aware up front.
The Benefits of Fulfillment by Amazon
Don’t be discouraged by FBA fees. Fulfilling through Amazon means a number of worthwhile benefits that other sellers don’t receive, including:
When you fulfill with FBA, your products are automatically eligible for Amazon Prime free two-day shipping — a huge boost for winning the Buy Box. Even non-members receive the benefits of free shipping on eligible orders when you use FBA. Customers feel more confident when FBA listings are displayed with the Prime logo, meaning Amazon handles the packing, delivery, customer service and returns.
Amazon-Led Customer Service and Returns
No need to worry about cumbersome service inquiries or returns. FBA users have access to Amazon’s global customer service network, meaning they can contact support via phone or email, day or night. Plus, Amazon’s online returns center provides help pages and details so customers know exactly where to go. The best part? No additional fees! (Except for returns processing in certain categories.)
Opportunities for Scale
Going global? Amazon offers specialized services so you can expand your business to 100+ countries, with fast delivery in Prime-eligible European countries as well. Plus, Subscribe & Save options encourage repeat customers, while multichannel fulfillment attracts shoppers from all your online properties.
FBA can be very cost effective, as you’re only charged for the storage space you use and the orders Amazon fulfills. Plus, the cost of shipping is included in your fees. FBA also helps keep costs down for your lightest and lowest cost products so you don’t lose money.
ChannelAdvisor Helps You Fulfill Amazon Customer Expectations
Have confidence in your FBA process with ChannelAdvisor Shipping Management helping you:
- Sync inventory, orders and tracking with your ChannelAdvisor account
- Track the status of your products in the FBA supply chain
- Chart and understand trends in the number of products and sales tied to FBA
- Quickly pinpoint inventory issues including excess, stranded and aged inventory
- Forecast necessary inbound quantity and begin the inbound shipment request directly
- Automatically adjust listings to seller-fulfilled when FBA goes out of stock