Selling on Amazon is a goal for many companies. It can provide a huge amount of profit while adding levels of complexity that can still drive some businesses away. If you are already an Amazon Seller Central Seller or you sell on Amazon B2B, you need to know more about Amazon FBA before you can decide it is right for you.
Let’s dive further into Amazon FBA to learn more about how it works and whether this is the lucrative residual income you have been looking for.
What is Amazon FBA?
Let’s start at the beginning. If you have wanted to become a seller on Amazon, without having to fulfill all the orders and handle customer service, then the service Amazon FBA may be right for you.
FBA is basically Fulfillment By Amazon and is a program where Amazon Sellers can make all of the products they sell Prime Eligible. This happens when the seller sends the inventory to Amazon Fulfillment Centers. When a customer places an order, the order will ship through Amazon, rather than through the seller. This makes it more convenient and can help save time for the business.
How Does Amazon FBA Work?
Amazon FBA is just the fulfillment channel for Amazon Seller Central Sellers. Instead of handling the shipping and customer on your own through Amazon, you will utilize some of the services that they provide. There are some fees, but for companies who are growing and can’t handle all the logistics on their own, Amazon FBA is a great option.
The neat thing is that when you sell with Amazon FBA, it makes life easier for the customer as well. They do not have to go through a lot of steps to make it happen either. FBA will work with the following steps:
- A customer will place an order on Amazon. They will just be on the main Amazon page and make a purchase.
- You will receive a notice of that order.
- Since the product is at the Amazon center, they will pack and ship the order to the customer for you.
All the orders through this method are eligible for 2-day shipping, which will make your customers happy. The seller is charged a fee to store the items and to fulfill them through Amazon. The Amazon FBA calculator will help you estimate how much it will cost to work with Amazon. You can choose to work with your own shipping partner, but Amazon offers a discount to use one of theirs instead.
What are the Fees that Come with Amazon FBA?
There will be a few fees that the seller will need to pay to use Amazon FBA. It is important to have a good estimate of the fees before you decide to start. While Amazon FBA is a good choice for many companies, it is not the right option because it will cost too much. While you can use the Amazon FBA calculator from before, some of the fees that you are likely to pay for using this service include:
- Professional Seller Central Account will be $39.99 a month
- Shipment to Amazon Centers: The cost for this will depend on the weights and the dimensions. Amazon does offer carrier rates that can help save on this.
- Stickering and labeling: This will cost $0.30 per product if you have Amazon label the products for you.
Storage Fees: These costs will be different based on the dates that you use. For January to September, it will cost $0.75 per cubic foot but long-term storage fees are $6.90 per cubic foot.
- FBA Fulfillment Fees: These vary based on the size of the item that you would like to send. For FBA small and light, it is about $1.97 while a special oversize item could cost over $137 each. You need to figure out the size of the item that you are shipping for this.
Depending on the product that you hope to sell, this can quickly add up and get expensive. Knowing more about your product, its weight, and how much time you will need to store it can help you figure out how much it will cost.
The Benefits of Using Amazon FBA
There are a number of benefits to using Amazon FBA rather than relying on your regular account through Amazon for selling. Some of the main benefits include:
- Order fulfillment is handled: Amazon will handle all of the work with order fulfillment for you when you use FBA. This means that you will not have to pick, pack, or ship your orders. You do not even need to store the items before shipping. For many small to medium businesses, this can really help save time and resources.
- Customer service: Not only will Amazon handle the shipping process, but they will also take over customer service. This provides your customers with 24/7 customer service all the time. This is provided without additional costs and can make sure that your customer will always get the help that they need.
- Review of the quantity and quality: Amazon FBA is able to do some work to help you get more reviews that are higher in quality. Your customers will be able to get 2-day shipping when they use Amazon. And customers who have a Prime membership are more engaged on Amazon, meaning they are more likely to leave a review. This can help you earn more in sales.
- Trust: Amazon is a company that your customers trust. This can make it easier for you to sell on them. If your product is there, it is more likely that a potential customer is going to trust you. And they are more likely to make a purchase.
The use of Amazon SEO: Amazon comes with its own algorithm when they rank products on its site. This is done through Amazon SEO. There are different factors that go into optimizing your listing on the website, but the highest rankings are usually going to be from companies that use FBA. This can help you get ranked higher too.
These benefits are going to help you to sell more products to your customers and can grow your business more than ever before. When the costs will work for your budget and what you are selling, you will find that it is going to be a great option to keep you organized and help the business to do well with less work.
How to Get Started with Amazon FBA
Now that you know more about the benefits that go with Amazon FBA and you have a better understanding of how this will go, you can decide whether FBA is the right method for you. Fulfillment with Amazon is going to get rid of some of the headaches that are taking over your business and can help you grow. And signing up for your own FBA account is easier than it may seem.
Some of the steps to follow includes:
- Set up FBA. You will need to first set up your own Amazon selling account. When that is set up, you would log into the account as a Seller. You can’t set up the FBA account until you get the seller account going.
- Create the listings for the product. Once all the products and their information are set up in the Amazon catalog, you can then specify which of those items will be in inventory for FBA.
- Prepare the products: You then need to prepare the products to make sure they are safely and securely transported to the nearest fulfillment center to you. You must follow the packing guidelines that Amazon gives and all the shipping and routing requirements.
- Ship the products: You can create the right shipping plan and then print off ID labels from Amazon. Send the shipments to the chosen fulfillment center.
Once Amazon has been able to receive your products at the fulfillment center, they will be able to add them to the website for a customer to purchase. You will be alerted when someone makes a purchase and when the inventory is getting low so you can send some more in.
Choosing Amazon FBA for Your Business
Amazon FBA is a great option to use for your business. it takes out some of the hassle and work and allows the large network from Amazon to take on some of the work. While there are some costs, it can be worth it for many companies who do not have the right resources to do the work themselves.
At Wifi Wealth, we understand the importance of growing your wealth and gaining the financial freedom that you deserve. That is why we are happy to work with our customers on creating their Amazon FBA business, as well as providing options for other lucrative residual income sources. When you are ready to take control of your finances and earn the income you deserve, contact our team to get started.