Fulfillment by Amazon (FBA) is a program that allows sellers to ship their products in bulk to various Amazon fulfillment centers. When a customer then places an order on Amazon for one of these products, the product is shipped from the fulfillment center by Amazon employees.
For the seller, this means once you've sent your inventory to Amazon, you no longer have to worry about tasks such as inventory management and order fulfillment and can instead focus solely on marketing your product and growing your sales.
We've touched on the time-saving benefits of FBA and how the program allows you to take concerns such as handling orders and storing inventory off of your plate. However, there are a couple of other benefits of Amazon FBA that are worth considering as well. For one, FBA products are automatically eligible for Amazon Prime free two-day shipping—an important offer among many Amazon customers.
Lastly, selling FBA offers a number of exclusive services to its members, such as multi-channel fulfillment that allows you to sell from your own ecommerce site while still relying on Amazon for order fulfillment and FBA Export that allows you to sell products via FBA in over 100 different countries.
While FBA offers a number of key benefits, it also comes with several fees if you want to take full advantage of the program. When you store products at one of Amazon's fulfillment centers, you'll be charged a monthly fee that is determined based on how much square footage of storage space your products take up. These FBA fees increase substantially for products that don't sell within six months. If you have a product that still hasn't sold at the twelve month mark, then you can expect these FBA fees to increase significantly once again. In addition to these storage fees, Amazon also charges fulfillment fees per product shipped out and fees per returned product.
The expenses associated with letting Amazon handle fulfillment of your products are certainly important to take into account. To learn more about how to avoid FBA fees, check out our recent post that outlines steps sellers can take to reduce their Amazon FBA fees.
If you like the idea of not having to fulfill orders yourself but aren't sure how to go about minimizing the fees associated with selling via FBA, selling your products to a third-party seller who is experienced at maximizing the benefits of FBA is a great alternative to consider. At SupplyKick, we purchase a 30-day supply of your products and then handle all aspects of selling those products on Amazon, from listing and marketing them to fulfilling orders.
To learn more about the significant benefits of working with a third-party seller, feel free to contact us today.
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