How Does Amazon FBA Work?

What is FBA?

Fulfillment by Amazon, or FBA, is a feature for Amazon sellers that allows sellers to relax and let Amazon do the work. FBA provides access to Amazon’s warehouses around the world, and Amazon staff are in charge of packing, shipping, and dealing with returns for your orders.  Even customer care is covered by the corporation. But how does FBA work for sellers, and what are some things you need to know?

Basic Process

Sellers on Amazon can choose if they want to fulfill orders themselves, or if they want to participate in FBA. Sellers can switch between methods whenever they need to. For those considering switching to FBA, the basic process once you’re signed up is pretty straightforward. 

1. Sellers ship their products to an Amazon warehouse (Amazon provides the address and contact information).
2. Amazon stores your products until an order is placed. Note: There is a storage fee associated with this, and it varies based on size and weight of your product.
3. When an order is placed, Amazon updates your inventory, and then packs and ships the product.
4. Any customer questions, follow ups, returns and refunds are taken care of by Amazon.
5. Amazon sends you your sales profit twice a month.

Inventory Fees

While Amazon FBA can be great for sellers who want to scale up their operations, or those who just want to focus on product production. However, there are factors to consider before signing up, such as inventory fees. 

Amazon charges a monthly fee for any inventory stored in one of its warehouses. The amount of this fee is based on the size of the product, the time of year it is being stored, and in some cases, the type of product. In addition, Amazon charges a long-term storage fee if your product has been at their facility for more than a year.

Why FBA?

There are many advantages to using Amazon FBA. The primary benefit for most sellers is that Amazon takes care of shipping and storage, as well as customer service, allowing you to easily scale up your business and/or focus on other aspects. There are also disadvantages to consider, such as stacking storage fees and potential trouble tracking your inventory. For more information on the pros and cons of FBA, read this blog post! 

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