Your Essential Guide to Amazon FBA
If you're wondering what exactly Amazon FBA is, how it works, and what sellers need to know about it, this is the perfect guide for you!
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Do you own an eCommerce website?
Maintaining your eCommerce website can be taxing. It takes both time and money to manage and optimize. For starting businesses, it’s easier to start selling on Amazon instead.
So, you might wonder: how can Amazon FBA help?
This guide will answer everything you need to know. You’ll understand how this service works and how to make the most out of it. Read on and maximize your selling potential on this platform:
What is Amazon FBA?
Fulfillment by Amazon (FBA) is a solution enabling you to work with this eCommerce giant. Through this service, you can use their warehouses to store and ship your products. It’s only available if you’re an Amazon seller.
The mechanics behind this is simple yet powerful. It helps your online business grow faster without big initial investments. After all, you need not worry about spending on staff and storage facilities.
With the Amazon Fulfilment service, customers think they’re buying from Amazon itself. The company streamlines this service through the process. Customers see the same options for delivery, return and refund policy, and service level.
As one of the 2.4 million active sellers on Amazon, this solution will increase your income a lot. At the same time, you’ll skip most of the time-consuming tasks. However, it isn’t a miracle strategy since it takes some effort before you start.
How Does Amazon FBA Work?
The primary requirement is to have a regular Amazon selling account. After that, you can follow a set of instructions to put your products in the section dedicated to FBA. It often takes a few clicks, but the business growth is cost-effective because of Amazon’s direct aid.
What Amazon Does for You
After sending your products to Amazon’s warehouses, the company stores your product. Worry not, they will tell you the address of the nearest one in your area.
Customers will buy your products while Amazon completes the transaction. This covers everything from payment to inventory updates.
The company will pack and ship your product to the people who ordered. If anything untoward happens, Amazon will deal with customer service. This includes processing refunds and returns.
Amazon will deposit your sales profits to your bank account once every two weeks. Take note; the company will charge fees for this service. However, the costs are acceptable since you save a lot from postage.
You’ll use Amazon’s capabilities when making sales. It’s convenient, and you need not worry about buying packaging materials. Regardless, you still have responsibilities we’ll talk about in the next section.
What You Need to Do
Your primary responsibility is to do your research and get the products you’ll sell. You must replenish your inventory whenever necessary. The good news is that Amazon will notify you when you have low stock levels.
Amazon won’t make your product listings. It’s still up to you to make them and handle the marketing. You need to know how to write effective listings and titles to let customers find them.
Benefits of Amazon FBA
With Amazon earning $234.6 billion in eCommerce sales, using FBA gives you many advantages. Again, remember that you must be consistent with quality if you want to succeed. Here are some benefits of working with Amazon:
1. Amazon’s Reputation
Regardless of your location in the world, most people trust Amazon. Whenever they order products from this company, they’re guaranteed to receive them. They can also return these products if they find anything wrong with them.
This positive reputation can change how likely customers buy from you. If your primary goal is to maximize your sales, borrowing Amazon’s reputability can help a lot.
2. Give a Faster Service
Amazon has a unique ordering system online. It enables them to process and dispatch products sold within their platform. This lets the company can ship your products faster than other methods available to you.
3. Higher Rankings on Amazon
Signing up on the FBA program means better visibility for your products. When people search, your products appear higher than non-FBA sellers. Also, products from these sellers list the total price for their items.
It means the products’ price will include the shipping costs too. As an FBA seller, your item listings will only have their intrinsic price. It’s what makes them appear first on the results page.
4. Secure the Buy Box Better
The Amazon Buy Box feature is the big “Add to Basket” button. You’ll find it on all Amazon product listings. If Amazon and your online store sell similar products, the former will have the Buy Box.
However, if you use Amazon FBA, you can compete. It’s because the platform likes seeing FBA on your shipping methods. Before long, you’ll get the Buy Box on the majority of your product listings.
5. Offer Free Delivery
Customers with Amazon Prime subscription have the free delivery option on your products. It gives you an edge over sellers not using the FBA program. After all, Prime customers are likely to buy lots of items when it’s peak shopping season.
Remember, no one hates free shipping. With this option, your products will have a higher chance of selling. You might end up restocking your items to fulfill the demand during the holidays.
6. Reduced Overhead Costs
As stated above, you need not concern yourself with storage, management, and staffing. It means you can focus better on selling your products and fattening your bottom line. It will allow you to expand your product offerings sooner.
7. Increased Productivity
FBA’s most significant benefit is the increase in productivity. Working with Amazon frees more precious time for you. You can use this to build your brand and improve your entrepreneurial skills.
8. Run Your Business Anywhere
As an FBA seller, your location is irrelevant. It’s because you can still have consistent purchases no matter where you are. After all, Amazon will handle your orders every day.
In most cases, you need not deal with customer inquiries a lot. Amazon handles it to ensure professionalism. For example, Amazon’s customer service will handle customer concerns instead of you.
Without dealing with order complications, you save more time. You won’t suffer from the stress and frustration of looking for the right solution. The best part is that you need not talk to the customers directly anymore.
9. Ease of Use
Do you find yourself spending lots of time packing your products? Are you spending hours to ship your products or deal with customer returns? If so, you need to opt into the FBA program.
Amazon’s help ensures that you don't need to touch your products or dispatch an order again. Time is your most valuable resource, and FBA will give this to you in spades. You can focus more on increasing your brand awareness to bring in more customers.
Disadvantages of Amazon FBA
Amazon’s excellent reputation is the biggest draw to use their FBA service. However, it’s not a perfect choice for some sellers. In this section, you’ll learn some of the potential drawbacks of working with Amazon.
1. FBA Costs Money
Amazon will charge both storage and fulfillment fees when you opt for their service. If your stock isn’t selling as fast, the former can add up. To ensure your storage fees are at a minimum, ensure your products sell fast.
Consider whether your products are profitable after factoring in the FBA fees. Otherwise, the convenience will not matter. Check Amazon’s support page to know the costs associated with FBA.
2. FBA Guidelines
After registering for FBA, know the guidelines on preparing and shipping your items. For Amazon to accept your products in their warehouse, you must adhere to them. These guidelines are strict and the mistakes are costly.
If you don’t label your inventory well, the warehouse will reject it. It will cause you both frustration and delays. The worst part is the extra work.
It isn’t much of a problem if you’re good at following instructions. It’s much easier than doing the entire fulfillment process on your own.
3. Product Packaging Doesn’t Carry Your Logo
When customers get their order, the packaging will have Amazon’s branding instead. It means you’ll have a harder time building your online reputation. It’s because your brand won’t be part of the packaging.
If you have no brand awareness concerns, this won’t be an issue. Think about how this drawback weighs against the other advantages offered by Amazon FBA.
Looking to get private labels to enhance brand awareness? We at Guangzhou Agent offer package customization for private labels. We have everything from custom logos, molds, and designs.
4. Increased Product Returns
Amazon has an easy return process. It’s great for maintaining a reputation, but it can chip away your income. You can mitigate this risk by ensuring that your products are high-quality.
Most customers won’t feel the need to return high-quality products. However, it’s inevitable because some customers buy things out of impulse. Some will experience buyer remorse and return your product.
The worst part is when Amazon deems your returned product unsellable. When this happens, you lose that income potential forever. It’s the biggest disadvantage, but often not enough to put you off.
How to Increase Your Amazon Sales
Whether you opt for Amazon FBA or not, this Amazon seller advice list applies. Do your best to maintain these good practices to expand your business further.
1. Optimize Product Details
Amazon sells over 12 million products. However, they offer various product attributes when searching for them. It helps them narrow down their item choices and makes searching easier.
As a seller, your objective is to appear at the top of those searches. The platform bases your rank on your product information and details.
This helps them determine whether you fulfill the customers’ criteria. Do this by ensuring that your product information is accurate and descriptive.
It means optimizing the title, description, and identifiers. Give as much information as you can, like the size, color, and other attributes. It will help a lot to ensure customers will get the right product.
2. Competitive Pricing
People buy products on Amazon because of their low prices. As a seller, you must know the prices you must compete against. It will lead you to list your products using a more competitive price.
If your items aren’t unique, research the prices of similar items on the market. Lowering your prices will help boost your product at the top of the results. Amazon has a low price feature that offers consistent functionality.
3. Take Professional Product Images
Customers must have a clear image of your product to increase their likelihood of buying. It’s your responsibility as a seller to take good photos of your products. Products taken with your phone won’t cut it anymore.
Invest some money and time to get a professional photographer. The quality of these photos will make customers trust you more. It will showcase your product at its best, attracting more people.
4. Be Consistent with Your Performance
Your Amazon business won’t flourish on its own. Track your performance if you want to sell more items. It allows you to know the things you can improve for your business.
Pay close attention to your sales, seller rating, and return rates. All these are important for determining your room to improve.
5. Follow Amazon’s Guidelines
It’s an obvious tip, but it’s easy to deviate from them if you aren’t careful. Never cut corners because you won’t get away from the penalties or suspension for long. Keep yourself updated with the rules to avoid making mistakes.
Grow Your Business Today!
These are some things you must know about Amazon FBA. Take full advantage of its features while mitigating the possible drawbacks. Follow the abovementioned tips to continue improving your sales.
Do you need more products to sell on your Amazon store? Drop us a line!