What Is Amazon FBA? 5 Frequently Asked Questions, Answered

amazon FBA worker monitoring packages in a warehouse

Last updated on July 13th, 2023

Written by Mohamed Aden

What is Fulfillment by Amazon (FBA)? If you are a new FBA seller or just about to sign up for an Amazon seller account, do not be surprised if you find yourself torn between FBA or Fulfillment by Merchant (FBM). Each program has its benefits and specific downsides. Yet, Amazon FBA is still the better choice.

In this blog, we delve into the world of Amazon FBA and explore how the intricate workings of Amazon fulfillment centers pave the way for business growth, scalability, and customer reach. As we navigate through the key advantages of the FBA program, you'll discover the role of  Amazon fulfillment center's state-of-the-art system in this transformative business model.

What Is Amazon FBA?

Before the FBA program, Amazon sellers took full responsibility for delivering their goods to customers. Sellers handled all the processes, from packaging the products, picking a shipping partner, to rendering customer service. 

All the tasks combined required hard work and took quite a while to fulfill. They kept the sellers wholly preoccupied. Hence, they were left with barely enough time to attend to other equally important matters concerning their business. 

With Amazon FBA, these woes are history. The solution takes charge of all these tasks—picking, packing, shipping, and providing your customers with valuable service. Amazon does everything on behalf of the seller. After shipping your inventory to Amazon's fulfillment centers, its personnel will be entirely responsible for your products from that point onward. 

An infographic explaining the five steps of how Amazon FBA works: (1) inbound shipment, (2) arrival at the Fulfillment Center, (3) order management, (4) fulfillment, and (5) customer service

What Is the Cost of Having an Amazon FBA Business?

Amazon FBA costs money, but in exchange for this cost, Amazon stores your products in their vast fulfillment centers, handles the packaging and shipping process, and provides customer service. With a lot of tasks taken care of and the free time, you can now focus on other essential business responsibilities.

Broadly, the cost of using Amazon FBA can be divided into two main categories: storage and fulfillment fees.

Storage fees are charged for storing your products in Amazon's fulfillment centers. The cost depends on the amount of space your products take up. These inventory storage fees can vary depending on the time of year, with costs increasing during the peak holiday season (October-December).

Fulfillment fees cover the cost of picking, packing, shipping your products, handling customer service, and product returns. The size and weight of the product determine these fees.

A table of applicable Amazon FBA seller fees in 2023

Before jumping into being Amazon FBA sellers, it's a good idea to calculate potential Amazon FBA fees using Amazon's FBA calculator in your Amazon Seller Central account. This can help you understand whether these FBA services will be cost-effective for your specific business model and product range.

What Are the Benefits of Using Amazon FBA?

There are many benefits you can enjoy when you embrace the Fulfillment by Amazon (FBA) program. Check out the list below to get you excited on the advantages you'll reap now that you are officially a BFA seller.

Access to Prime Customers

By using FBA, your products automatically become eligible for Amazon Prime, thus granting you access to millions of dedicated Prime customers who enjoy perks like fast and free shipping.

Trust and Credibility

Amazon has built significant trust with its customer base. By selling through the fulfillment service, you can leverage Amazon's strong reputation, enhancing the credibility of your business.

Efficient Logistics and Inventory Management

Dealing with inventory storage, packaging, shipping, returns, and customer service can be challenging. With Amazon's FBA program, you can free up your time and resources to focus on other areas like product selection and marketing as the mentioned tasks are all covered.

Potential for Increased Sales

Fulfillment by Amazon products often appear higher in search results and can be more appealing to customers due to Prime eligibility and Amazon's reliable customer service. This increased visibility can lead to an uptick in sales.

Global Market Reach

Amazon's extensive global network allows you to tap into international markets more quickly, extending your sales potential beyond local boundaries.

How Can Sellers List Products For or Delete From Fulfillment by Amazon?

Listing products on FBA is easy-peasy. There are processes involved depending on whether you want to change your product listings from another fulfillment method to FBA, list products for multi-channels, close a listing, or delete it.

Steps to Put Your Current Listing Under FBA

Step 1: Go to the Manage Inventory page.

A screenshot of the Amazon Seller Central menu, showing the Inventory and Manage Inventory dropdown options, in red box

Step 2: Choose the item(s) you want to change to FBA. Using the drop-down list, change the action on the selected item(s) to Change to Fulfilled by Amazon.

A screenshot of the Manage Inventory Page, showing the action drop-down options, Change to Fulfillment by Amazon in red box

Step 3: On the List as FBA page, confirm the product details.Then, click List as FBA. Otherwise, if you have inventory and a shipping plan ready, click List as FBA and Send to Amazon.

A screenshot of the List as FBA page, showing the action drop-down options, the List as FBA and List as FBA and Send to Amazon buttons in a red box

Steps to Delete Your Current Listing

Step 1: Go to the Manage Inventory page.

Step 2: Choose the FBA item(s) you want to close. Using the drop-down list, change the action on the selected item(s) to Delete product and listing.

A screenshot of the Manage Inventory Page, showing the action drop-down options, Delete product and listing in red box

Step 3: A confirmation message will pop up. Click OK.

Take note that the change may take up to 15 minutes to take effect. Your status will become Inactive upon, and the product will no longer be sold on the platform. However, your inventory stays in the fulfillment center. To remove them, you have to turn in a Removal Order.

What Are the Different Products to Sell on FBA?

Are you looking for ways to enhance your existing strategy further? Then, consider these popularly used techniques for choosing the best products you can sell on the platform.

Private LabelManufacture your product and brand it before selling it on Amazon. With this method, you have complete control over the details of your product.
WholesalePurchase branded products in bulk. Then, sell them on Amazon at a higher price. 
ArbitrageScour physical retail outlets or even other marketplace platforms for any product you want to sell. After purchasing them, you can set a higher price for them when you sell them on Amazon. 
Secondhand BooksAre you fond of hunting for good reads? Get used books from various types of sales (book sales, yard sales, etc.). Like Arbitrage and Wholesale, you can sell them at a higher value on Amazon.
Pre-loved ItemsAside from books, you can also sell pre-loved items on the platform.

Before you sell any used goods, research other similar products for sale, especially those that are also second-hand. Find out how much they cost. Take the time to review your competitors' offers to see if the quality is good or at par with your item. With this, you should also check and compare other pertinent details like shipping costs. 

Keep your price competitive. It is not about offering your product at a lower cost. It is about allowing your potential customers to carefully consider their benefits by providing a similar product of more or less the same quality but at a more affordable price.

What Are the Responsibilities of an Amazon FBA Seller?

Overall, by doing your part and cooperating well with Amazon, you can look forward to reaping considerable Amazon FBA income in the not-so-distant future. Amazon takes charge of most of the processes of selling your products. This advantage buys you more time to focus on the three most significant aspects of running your business.

Choosing the Best Products to Offer to Your Target Market

It requires intensive research to select the right goods to give your customers great value for their hard-earned money. There is no one way of picking the best selections. But if you want something your intended buyers will appreciate, know their needs.

Ensuring Your Inventory Is Well-Stocked

Amazon personnel will inform you immediately when your stock is running low. Therefore, you will have time to replenish it.

Employing Creative and Strategic Ways to Promote Your Offers

Positioning your products to increase visibility and brand awareness requires using suitable advertising methods. For this purpose, you can take advantage of Amazon advertising and Amazon Brand Protection. Like FBA, Amazon's product promotion solutions are streamlined to make the process easier and more efficient.

Partner With Seller Interactive

Fulfillment by Amazon service offers many benefits, such as efficient logistics and inventory management, access to prime customers, increased sales opportunities, and global market reach.

By being an Amazon FBA seller, one can focus on product selection, inventory management, and creative promotion strategies, allowing them to grow their business effectively.

If you need assistance getting started with FBA or managing your Amazon store, don't hesitate to contact us here at Seller Interactive. We have full account management services and more you can use to make your operations smooth, and your business succeed. Book a call today to discuss the details with you!

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