Amazon has created one of the most advanced fulfillment networks in the world, and if you are selling physical products, your business can benefit from using their expertise.
In simple terms, with FBA, you sell your product and Amazon ships it. With FBA, you store your products in Amazon's fulfillment centers, and Amazon packs, ships, and provides customer service for these products.
Here are some of the benefits of using FBA:
1. Your products are eligible for Amazon Prime Free Two-Day Shipping, FREE Shipping, and other benefits.
2. Your customers get Amazon's trusted customer service and return policy.
3. FDA services let your business grow quickly, as you can focus on your business, not details.
4. You can fulfill orders from your other sales channels using your inventory stored at an Amazon fulfillment center.
5. It's cost effective and simple. You pay as you go, as you are charged for storage space plus a fulfillment fee for the orders shipped.
FBA has been great for many individuals and businesses. It is amazing how much of your time frees up when you don’t have to warehouse, pick, ship, and handle Customer Service for your business. Think about being able to actually spend the majority of your time growing your business instead of renegotiating shipping contracts with shippers.
Here are some of the costs of using FBA:
1. You are responsible for the shipping cost to send them your products. However, you are charged at Amazon’s UPS rate, not yours, which adds extra cost to selling your product.
2. Amazon still charges the normal seller fees (15% for media, etc.) when your item sells.
3. Amazon will also charge you a fee to store your item, another fee to pick your item, and a weight-based fee when your order ships. Essentially, there is a fee for every time an Amazon employee performs a FBA function.
4. There is also a Long Term Storage Fee (recently implemented) for items stored in the FBA warehouse for over a year.
You may be wondering how all the fees above will allow you to make a profit with FBA. Some users of FBA state that using FBA is a win - win situation and that selling items on Amazon costs LESS than if they were doing it all on their own, plus the sales volume is higher.
And again, it frees you up to concentrate on growing your business instead of attending to daily details for each sale and shipment.
If you need some guidance on what to sell on FBA, go here:
Amazon FBA: Amazon FBA 7 Amazing Items to Sell on Amazon FBA That Made Me $60,000 within One Year!
Amazon has announced FBA fee increases to take effect in 2015. You may want to analyze these fee increases to see how they would impact your FBA project.
Go to U.S. Fulfillment by Amazon Fee Changes 2015 to read the upcoming changes.
Amazon also provides an FBA Revenue Calculator that allows you to analyze if FBA is worth it for your business. This will help you make a decision before you sign up under the FBA Service.
You will find more information for selling on FBA Services here:
Amazon Seller Secrets Exposed: Inventory Sources & Profit Tips Other Sellers Don't Want You to Know
If you want to sell your products through the broad reach of Amazon, then it may benefit you to take a look at FBA Services.
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