What is Amazon FBA: Lowdown of Advantages

Amazon Truck and Merchant

Last updated on June 5th, 2023

Written by Mohamed Aden

What is Amazon FBA? If you are a new seller or you are just about to sign up for an account with Amazon, do not be surprised if you find yourself torn between two choices: FBA (Fulfilled by Amazon) or FBM (Fulfilled by Merchant).

Quick Summary:

Each program has its benefits. With this comes specific downsides, too. Nonetheless, choosing to sign up for an Amazon FBA wholesale business will open you to receive more advantages.

What Is Amazon FBA Business?

Before the introduction of FBA, sellers took full responsibility for delivering their goods to customers. They handled all the processes from packaging the products down to rendering post-sale customer service. 

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

With FBA, these woes are history. The solution takes charge of all these tasks-- picking, packing, shipping, and providing your customers with valuable service—involved with preparing and delivering orders on behalf of the seller. After shipping your inventory to an Amazon warehouse, its personnel will be entirely responsible for it from that point onward. 

To help you better understand the multiple benefits of this innovative program, go over its step-by-step process below. 

Step 1: Take your inventory to Amazon.

Step 2: The designated Amazon personnel will inventory and sort your goods, and then store them in one of their fulfillment centers. These specially built structures are warehouses that are managed by a combination of professional employees and state-of-the-art robots.

Step 3: Amazon will manage the transactions for all orders you will receive. They operate via an automated system.

Step 4: After finalizing the details of the order, your products will be picked from its storage area, appropriately and securely packed inside a box before finally being shipped to your customer’s location.

Step 5: As soon as the customer has received the order, Amazon customer representatives will follow up to ensure that all processes are carried out smoothly. Also, they will inquire with the customer in case there are issues. In such cases, Amazon will record the data, handle it ASAP. Then, it will follow up again until the matter is completely resolved.

The Cost of Amazon FBA

All the conveniences you can get from FBA have mandatory fees. The practice is shared across all marketplace platforms regardless of what program they offer. With Amazon, your payments will be deducted from your sale. 

In a nutshell, the costs you need to pay for FBA include a monthly fee, product costs, shipping, and third-party tools. Below is a comprehensive breakdown of the prices each aspect covers. 

Amazon FBA Fees

Effective Amazon FBA Strategy: Your Benefits

Entrepreneurs, physical outlets, and e-commerce stores stand to gain the most benefits from signing up for an FBA account. They include: 

  • Freedom from handling fulfillment logistics and customer service
  • Having the opportunity to integrate with other sales channels 
  • Improving your brand’s credibility via the placement of the FBA logo on your items
  • Eligibility for fulfillment via Amazon’s Prime shipping network
  • Increased chances of winning the Buy Box, which boosts your products’ exposure

How to List Products on FBA

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

If you want to change your current listing to FBA:

Step 1: Go to the page of the Manage Inventory.

Step 2: Choose the items you want to change to FBA. To do this, choose Change to Fulfilled by Amazon on the Action on Selected drop-down list that appears for each item.

Step 3: When you get to the page Convert to Fulfilled by Amazon, click Convert. You will be directed to the Amazon Fulfilled Inventory page. Alternatively, you can click on the Convert & Send Inventory if you want to start working on your shipping plan.

If you want to close or delete a listing:

Step 1: Go to the page of the Manage Inventory.

Step 2: Choose Close Listing or Delete Products and Listings on the Action on Selected drop-down list that appears for each item.

Take note that even if your status changes to Inactive upon closing a listing, your inventory of the product in question stays in the fulfillment centers. However, they are no longer sold on the platform.

If you want to relist the products, go to the Multi-Channel Fulfillment page. On the latter page, you may also perform other tasks such as turn in removal orders or fill orders.

When you delete listings, your inventories’ listings retain whatever offers Amazon fulfills. However, they will no longer be sold on Amazon or be available for filling multi-channel fulfillment orders.

Your inventory will stay in the fulfillment centers until you remove them. For removals, you have to turn in a Removal Order.

How to Sell Used Items on Amazon

When it comes to the process of selling on Amazon, sellers are free to employ their strategies. But having such freedom does not imply using black hat techniques. Such devious moves put your account at risk of suspension. Not only will receiving this sanction damage your online reputation, but it can seriously compromise your business standing as well. 

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 Label

Manufacture your product and brand it before selling it on Amazon. With this method, you have complete control over the details of your product. 

  • Wholesale

Purchase branded products in bulk. Then, sell them on Amazon at a higher price. 

  • Arbitrage

Scour 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 put them up for sale on Amazon. 

  • Second-Hand Book Sales

Are you fond of hunting good reads? Get used books from various types of sales (book sales, yard sales, etc.). Similar to Arbitrage and Wholesale, you can sell them on Amazon at a higher value. 

If you can resell used books on Amazon, why not do the same with other pre-loved items? Here are some essential tips to take to heart before you start.  

  • Before you sell any used goods, do a bit of research on 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’ offering 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 with a more affordable price.

On Becoming a Fulfilled Seller via FBA

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, so you can focus on the three most significant aspects of running your business. They are:

  • Choosing the best products you can offer to your target market

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

  • Ensuring that your inventory is well-stocked

When your stock is running low, Amazon personnel will inform you right away. Therefore, you will have time to replenish it.

  • Employing creatively strategic ways to promote your offerings

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

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