Fulfillment By Amazon(FBA) is a free service open for both new and existing Amazon sellers. Sellers spend time and money on product warehousing, packing and shipping of the products. These tasks are handled by Amazon when you choose FBA service. This helps you to focus more on building your business.
You don’t have to pay any subscription fee and there is no limit on the number of products. You can start with even a single product.
FBA is useful especially for private brands where they don’t have any direct competition. For them FBA is a powerful platform to make their brand popular and to generate big sales volume. And, with some basic knowledge, anyone can become a seller on Amazon.
How Fulfillment By Amazon Works
- FBA warehouse has to be added as additional place of business in your GST registration. The process may seem complicated but your CA or tax consultant will make it easy for you.
- Now you need to pack and send the products to Amazon warehouse. Just follow the instructions in your seller central about the process of shipping to the warehouse. Amazon’s logistics will pick the products from your location and will store in their warehouse.
- Once an order is received, Amazon will pack and dispatch the product on your behalf.
- Payment will be transferred to your account in the specified time period after deductions of Amazon’s commissions and fulfillment charges.
- Customer service and product returns, if any will be handled by Amazon.
Advantages of Using ‘Fulfillment By Amazon’ Service
- When you use Fulfillment by Amazon, you don’t need to store your products. So, warehouse expenses are saved.
- All your products will get more visibility which means increase in sales volume. When you use FBA, your products get ‘Prime’ badge which make it eligible for one or two days delivery. Customers prefer buying products with a ‘Fulfilled by Amazon’ and ‘Prime’ badges because of trust factor and faster delivery.
- Customer satisfaction is very important. Amazon’s professional packing results in good customer experience.
- Customer returns are a big headache for any seller. Amazon handle product returns and customer service.
- You get more time to focus on building your business.
Important Things To Consider
1. Select products very carefully. This service isn’t suitable for low-cost items as you have to pay fulfillment charges, you won’t be able to make decent profit margin. Also, heavy items would incur higher storage and fulfillment fee. List products that are more profitable and have high chances of selling.
2. Use Fulfillment by Amazon service for few products in the beginning. After order fulfillment and payment settlement, you will know how much profit are you making exactly. After that send other products.
