What is Fulfillment By Amazon (FBA)?

by Alfredo on July 1, 2012

What is Fulfillment by Amazon (FBA)?

Fulfillment by Amazon (sometimes referred to as Amazon FBA or Amazon’s Fulfillment-By-Amazon (FBA)) allows you, the independent seller, to utilize the services, benefits, personnel, warehousing and even the brand association of Amazon to sell your own items.Fulfillment By AMazon

Think of it as stocking your items in their warehouse, utilizing their customer service as your own, having a company-full of pickers and packers at your disposal, and an IT person producing Seller Reports for you.   Work continues as you focus on finding better or more profitable product, or even continues as you vacation.

Your Amazon “employees“ work 24 hours a day, work on weekends and keep your sales and cash flow moving smoothly.   Your products will ship quickly and seamlessly, utilizing Amazon’s high quality packing standards.

Your customers can also reap the benefits of being an Amazon customer.  I’ll talk about some specific benefits to the buyer further on.

Sure, there are fees involved; however, the majority of sellers who once had brick and mortar facilities agree that these fees compare quite favorably with trying to fulfill orders on your own, using your own resources.

The Fulfillment by Amazon program has been received positively by the majority of sellers.  As a matter of fact, a recent survey of sellers conducted by Amazon.com stated that a majority (87%) of their respondents reported an increase in their unit sales – 61% stated an increase of 20% or more.

Increased sales and the time saved by having Amazon’s FBA program handle the details of your business for you accounted for 75.5% of the reasons that sellers joined FBA.

For new independent sellers, having the facilities and employees to begin your venture at a breakneck pace is more often a hope than a reality.  Usually, these sellers attempt to deal, mostly by trial and error, not only with the packing and postage of their products, but the warehousing, returns, customer service, inventory management, bookkeeping and sales tracking reports.   The ebb and flow of a normal sales business can toss these new sellers into a frenzy during the busy seasons, which usually results in poor service and very unhappy customers.

With Amazon FBA, you can begin your venture small and level up at a comfortable pace, to virtually limitless levels.  Or, you can break out of the starting gate at a run, knowing you have the support and services provided by Amazon to back you up.

Imagine having these tasks delegated to trusted employees, leaving you with the time to make better business decisions.

Now, let’s look at some of the specific benefits for your buyer, which end up benefiting you through higher sales volume.

 

Fulfillment By Amazon

Customer Ordering Conveniences

Your customers can use Amazon’s high-tech shopping cart features – such as making changes to orders prior to shipment, and tracking their orders and shipments.

 

Shipping Values

When internet sales were just beginning, consumers began looking online for values and product choices.  With shipping costs still at reasonable level, the decision to purchase online became a popular one.  Order at your convenience from a new wealth of product choices, and have your new item quickly show up at your door.

However, as shipping costs kept rising, an important factor in the buyer’s decision became the free or low cost shipping incentive.   Small sellers who strived to offer these incentives gave up too large a portion of their profit to compete successfully.  But, with Amazon’s Fulfillment-By-Amazon (FBA),

your buyers can take advantage of Amazon’s shipping values.

Amazon Prime members have unlimited fast shipping, such as FREE two-day shipping to street addresses in the U.S. The Amazon Prime membership is surging. You will reap the rewards because buyers are more likely to purchase from a seller that is part of Amazon FBA.

FREE Super Saver Shipping is another program that Amazon offers to buyers who spend over $25 on eligible products and ship within the USA. As an FBA seller, your products are eligible, allowing the buyer to save money and thus, making them more likely to add your product to their shopping cart. Even if your product is priced higher than non-FBA shippers!

 

Amazon Customer Special Services

Gift wrapping

24 x 7 Customer Service

Up to the minute countdown for One Day Shipping

 

Brand Association

Don’t underestimate the value of brand association to Amazon through the FBA program.  Amazon ranks among the top consumer brands for customer satisfaction and strict quality control, and now your buyers can feel the comfort of knowing their products come from Amazon, too.

 

This is Fulfillment by Amazon.

 

Leave a Comment

Previous post:

Next post: