What is Amazon FBA?- All About Amazon FBA

Amazon 

With the rapid rise in the use of technology, the world has become habitual of employing technology in various aspects of day-to-day life. Activities such as online banking, online shopping, online streaming services have become more common than ever. Over the past years, one name that has become synonymous with online shopping is Amazon. Amazon has developed itself into the largest e-commerce company in the world. Along with e-commerce services, Amazon also provides services such as – digital streaming, artificial intelligence, and cloud computing. In terms of market capitalization, Amazon is the most valuable retailer in America. Here, let’s know What is Amazon FBA?

The e-commerce giant is also the second-largest private employer in the United States, having employed 810,000 people all over America. Amazon through its innovative and modern technology has always strived to gives its customers the best and smooth experience. Amazon not only aims to provide the best experience to its customers, but it ensures that people selling their products through the Amazon platform are genuinely served with the best experience. Amazon helps its sellers to grow their business and reach more people. Amazon has employed a program known as the Amazon FBA to ensure that sellers get the best and hassle-free experience while selling their products through Amazon. 

This article provides information about the Amazon FBA program. 

Amazon FBA

Fulfillment by Amazon or simply known as FBA Is a service offered by Amazon which enables the sellers to send their products to the fulfillment centers of Amazon and once the products reach the centers, it is Amazon’s responsibility to store and pack these products and ship the orders to the customers. Amazon also assumes responsibility if the customers want to return the product or exchange it. So Amazon provides complete customer service for the associated seller’s products. Upon the sale of the products, sellers are paid money after deducting Amazon’s fees. Sellers can register with Amazon for fulfillment service and boost up their sales and grow their business by leaps and bounds. The fulfillment program can also propel the sellers to gain a comprehensive edge over their competitors. 

Working Mechanism of Fulfillment service 

In simple terms, this service is all about the process through which Amazon facilitates storage of inventory, packaging of goods, shipping the packed goods, and dealing with returns or exchanges if any. More and more sellers are opting for e-commerce fulfillment services due to the array of benefits provided by this service. The fulfillment service helps the sellers to save a considerable amount of time and also reach new customers. 

The following steps signify the working of fulfillment service –

•  Receiving Inventory – The first step of fulfillment involves sending the products to Amazon’s fulfillment center.  The inventory sent by the seller is received at the Amazon fulfillment center. 

• Inventory storage –  The received inventory is stored at a suitable place along with necessary precautions. 

• Processing orders – Whenever a customer places an order for a product, and completes the online transaction or chooses another form of payment such as cash on delivery, the order processing starts. The product chosen by the customer is identified and the order is packaged and prepared for shipment. 

• Shipping – The products selected by the customers are shipped by Amazon to the postal address provided by the customers at the time of placing the orders.

• Customer shipping notifications – After shipping the products, Amazon provides the customers with a notification that their product has been shipped and the notification includes the expected date on which the parcel will arrive at the customer’s address. Customers are also provided with a tracking number through which they can track the location of shipment accurately. 

• Processing returns – Every order shipped may not necessarily imply that the customer will accept the product and be satisfied with the same. In certain cases, customers may not be satisfied with the product owing to several factors. Customers may initiate the return of the product in case they feel they need to return the product to get another or exchange the product due to some problem with the product. Amazon on the behalf of the seller receives the return request and after analysis of the product, the product to be returned to exchanged is collected from the customer’s address. In case the product is to be exchanged, Amazon delivers the new product to the customer’s address after completing exchange formalities. 

Benefits of Amazon FBA 

Sellers through fulfillment by Amazon can reap a multitude of benefits from Amazon’s this service. These benefits enable the sellers to sell their products without the hassle to think about delivering the products to the customer’s doorstep or picking up the products in case of return or exchange. So the time saved through this service can be utilized by the sellers to focus more on improving their products and introducing innovations in existing products. The various benefits that fulfillment by Amazon provides to its sellers are enlisted below – 

•  Better customer service – 

Providing appropriate customer service to the customers can be a challenging task for the sellers. Moreover, apart from being a challenging task, customer service needs to be performed on time, otherwise, it may lose its relevance and customers may be left dissatisfied. But selling through fulfillment by Amazon provides the sellers with an optimum benefit of letting Amazon do this challenging task on the behalf of the seller. Amazon’s customer service specialists are experts in giving the best and most satisfying experience to the customers. Customers can ask questions or submit their grievances to Amazon customer support as they are available 24/7 through means of email, phone, and message. So sellers registered with fulfillment by Amazon need not worry about customer experience. 

• Managing returns and refunds – A small-scale seller may not be in a position to efficiently manage the process of product returns and giving refunds for the same. However, the use of fulfillment by Amazon can turn things around. With the fulfillment program offered by Amazon, sellers are discharged of their responsibility related to managing returns and refunds. The entire responsibility is assumed by Amazon and it facilitates seamless returns of products and refunds are initiated and processed promptly. So it reduces the burden of sellers to a great extent and they are left with ample time to focus on improving the quality of their products. 

• Reach new customers –  It may be a daunting task for sellers to reach new customers in far-off regions. Thus the growth of the business may be slow and sellers may not be able to generate adequate profits. But selling through fulfillment by Amazon helps the sellers to sell their products to new customers at a low cost. Sellers can use this service to promote their products to new customers and attract new customers. Products can even be shipped to international customers through Amazon’s fulfillment program, which otherwise may not be possible in case an individual seller sells the product without a fulfillment program.

• Promoting New products – It is an important task for any seller to introduce new products in the market from time to time. Without new products, sellers may not be able to survive in the competitive market for a long time. Individual sellers may find it pretty difficult to promote their new products to a large number of customers. However, sellers who sell through Amazon have a lucrative opportunity to advertise their products on the largest online marketplace in the world. So it helps the new products of sellers to be seen by a large number of customers. This will help the seller to gain customers for the newly introduced product because Amazon being a trusted online platform will result in easy acceptance of the new product.

• Time-saving- By selling products through Amazon’s fulfillment program, sellers can save their time which otherwise would have been not possible. The time saved from customer service, delivering products, handling returns, refunds, and exchanges can be used by the seller to make further improvements in the products and improve the overall quality of the product, so that product can gain more acceptance from the customers and a higher level of profits can be achieved. 

Registration Process for Amazon FBA

Sellers must register themselves for Amazon’s fulfillment program before they can start selling through Amazon. The following points highlight the procedure which an individual needs to follow to be registered for the fulfillment by Amazon program- 

• First of all, an aspiring seller needs to visit the website of Amazon and in the browsing column locate the sell products on the Amazon section. This will take the individual to the registration page for fulfillment by Amazon. 
• Before initiating the registration, an individual should make a preference about which selling plan to be availed. Amazon offers two plans for sellers. These are the individual plan and professional plan. These plans are discussed as follows- 

1. Individual Plan – In this plan the seller has to pay Amazon $0.99 per product sold through Amazon’s fulfillment program.

2. Professional Plan – On the other hand the professional plan cost on a per month basis and the cost incurred by the seller for one month is $39.99. This is a fixed monthly amount and does not change depending on the number of products sold in a month. 

Individuals can compare both the plans and make the decision depending on the number of products to be sold in a month. Sellers are also given the option to cancel or change the plan at any time.

• After the seller is sure about which plan to choose, the seller can start making their account to sell the goods. This can be done through the individual’s Amazon customer account or a new seller account can be made by registering with a business email. To signup for a seller account, individual needs to possess the following documents –

1. Chargeable credit card
2. Government ID proof
3. Tax information of the individual
4. Phone number
5. A functional bank account in which Amazon will deposit the sales proceeds.

• After furnishing the required details and documents, the individual can create the seller account. Sellers can manage their accounts and monitor the sales by visiting Amazon’s seller central website or by downloading the Amazon seller application on their mobile device. The seller can track and monitor various aspects related to their account.

• After making the seller account, the seller can start to list their products in the Amazon product categories. The product listing shall be created in seller central.

• Amazon suggests the sellers with several ways by which they can increase the visibility of their products on Amazon. Some of these ways are – 

1. Setting competitive prices will result more in more customers being interested in buying the product.
2. Getting customers to review the product can genuinely increase the visibility of the product, as more customers are attracted to the products with positive ratings.
3. Advertising the product offers can result in better visibility.

Advise by Amazon

Amazon guides its sellers to become successful sellers on the Amazon platform. The Amazon seller guide enlists various strategies to help the sellers in becoming successful through fulfillment by Amazon. Some of these strategies are mentioned below – 

• Sellers are advised to provide accurate details about the products, to avoid any confusion or misinterpretation by the customers. 

• Sellers should fix the price of the products reasonably. Pricing too high will make the customers uninterested in buying the products. Customers are generally looking for the best deals and after comparing various similar products and reviews, they will generally buy the product at a reasonable price. 

• Checking customer feedback will help the sellers to rectify any mistake about the product and will also let the seller know about what can be done to improve the overall quality of the product on offer.

•  The sellers should read the various terms and conditions of the fulfillment policy.

Policies and requirements for Amazon FBA

Any individual who wishes to be registered with the fulfillment program of Amazon needs to be well aware of the program’s policies and requirements. These policies and requirements govern the functioning of Amazon’s fulfillment program. Amazon enlists the various points of policies and requirements for the sellers. The various policies and requirements related to Amazon’s fulfillment program are mentioned below –

• Product restrictions – Every seller before listing their product on Amazon must know what type of products can be listed on the Amazon marketplace. Several products require specific permissions before becoming eligible to be listed on the Amazon marketplace and numerous products are of such nature that they cannot be sold through Amazon. 

Some of the products that cannot be sold through Amazon FBA are – Alcoholic drinks, products containing unauthorized marketing material, and defective products. The non-compliance by the seller of these restrictions may lead to Amazon refusing the products to be stored in the fulfillment center, deactivation of seller’s Amazon account and fines may also be imposed on such sellers.

• Inventory requirements – Amazon has clearly defined the requirements which sellers need to fulfill regarding inventory. The sellers must adhere to these requirements before sending their goods to the Amazon fulfillment centers. Some of these requirements are mentioned below – 

1. The title of the seller’s product shall be no longer than 200 words, and the title should contain information signifying the identity of the actual product.
2. Products must be packed as per the instructions provided by Amazon.
3. Amazon also provides instructions to the sellers regarding the accurate content information to be provided on each box.
4. Sellers must provide a barcode on every product that is sent to Amazon’s fulfillment center. 

• Buyer feedback policy – Even if the orders are delivered by Amazon, the customers can provide feedback for the actual seller of the product. Amazon lets the seller know about the satisfaction level of customers regarding the seller. In case the seller receives negative feedback from the customer that is intended for Amazon’s delivery service, the seller can request Amazon to remove such feedback, and upon detailed review, such feedback may be removed. But in case the negative feedback is related to the product offered by the seller and is intended for the seller, such feedback will not be modified or deleted. 

• Customer return policy – Through the fulfillment program, Amazon assumes the entire customer service for the seller’s product. The customer return policy of Amazon decides whether the product is eligible for being returned or not. Amazon’s return policy usually facilitates the return of the product within 30 days of the purchase. However, in exceptional cases, this time limit may be increased. 

 A returned product may not be eligible for resale due to the following reasons –

1. The product condition may vary from the previously listed item.
2. The item is damaged or is defective.
3. The product may pose a risk of some health hazard to the delivery executives or the future buyer of the product.

•  Inventory reimbursement policy –  In case the product sent by the seller to Amazon fulfillment center is lost or damaged by anyone related to Amazon in some capacity, the product will be replaced by Amazon with a new product, or Amazon will pay the seller as compensation for the lost or damaged product. Following conditions need to be satisfied for reimbursement by Amazon – 

1. The lost or damaged product has to be registered in the fulfillment program of Amazon.
2. The product sent by the seller is in complete accordance with the shipping plan.
3. The product was not damaged beforehand.
4. The seller’s Amazon selling account should be in normal working status, while the seller claims reimbursement.

Conclusion

The fulfillment by Amazon program serves a great purpose to sellers who want to grow their business beyond the local marketplace. This program can be used by individuals to sell their products on the Amazon platform. The benefits provided by Amazon FBA to the sellers are numerous and sellers can reap these benefits by registering themselves in Amazon’s fulfillment program. In the e-commerce world, fulfillment is one of the most challenging tasks for any seller. But fulfillment by Amazon allows the sellers to store their goods in Amazon warehouses and let Amazon ship these products to the customer’s address. 

Moreover, on the behalf of sellers, Amazon takes care of all the returns, refunds, and exchanges related to the seller’s products. The excellent customer service provided by Amazon adds value to the products and results in customer satisfaction. All these responsibilities related to the seller’s product are performed by Amazon, so this program frees a lot of time for the seller, which can be utilized by the seller to work on bettering the existing product and focus on providing higher value to the customers. 

Frequently asked questions

Question 1. How can an individual download the Amazon seller application?

Answer 1. An individual can download the Amazon seller application by simply visiting the play store(Android devices) or App Store(iOS devices) and search for the Amazon seller application and install the application on to their device. After installing the seller would be prompted to enter in their account details and log into their Amazon seller account.

Question 2. Is Amazon FBA available only in the United States?

Answer 2. Amazon runs its operations in numerous countries around the world. Similarly, the programs offered by Amazon are also available in several countries around the world. Amazon’s fulfillment program is also available in many countries apart from the United States. Some of the countries where Amazon FBA is available are – United Kingdom, Italy, Germany, France, India, Japan, Canada, Australia, and the Netherlands amongst others. 

Question 3. How can a seller expand their operations to a global level?

Answer 3.  Amazon’s fulfillment program enables the sellers to expand their operations beyond the global boundaries. Amazon provides sellers with two methods to sell products globally. These methods are – 

•  FBA Export – This method allows the seller to list the products on the Amazon platform or the seller’s website. After listing the products, Amazon completes the received orders and exports the product to customers around the world.
• Amazon Global selling – This method enables the sellers to list their products on Amazon websites of different countries.