Amazon FBA expert tips

Amazon FBA expert tips

E-commerce has become a common platform in the world for people to sell and purchase items online. It is estimated that by 2020 retail e-commerce sales will reach 27 trillion dollars.  Fulfillment By Amazon is one such platform owned and offered by Amazon, the largest online retailer, to sellers. Amazon FBA provides sellers with storage, packaging, and shipping service at a fee. The main advantage of using Fulfillment By Amazon, otherwise known as Amazon FBA, is that Amazon handles all the exhausting and tiresome procedures for the sellers, which is not the case on the other e-commerce sites. Amazon FBA basically does everything for the seller. This allows the seller to focus more on production and other activities that may boost sales. The seller is required to ensure that he/she has enough stock on display and advertises their product. When a customer orders a seller’s product on Amazon, the employees of amazon handle the process of storage, packaging, and shipping. Amazon offers sellers a chance to take advantage of the trust that they have built worldwide over the past 24 years. Using Amazon FBA also enables sellers to market their products to a broader market globally. Although FBA has many advantages, it also comes with some limitations which will be looked at later. A seller needs to consider some factors before deciding to sell their products using Amazon FBA. If you are planning on expanding your business using Amazon FBA, then this article is ideal for you.

Amazon uses its excellent reputation and large clientele to provide storage and distribution services to sellers using Amazon FBA. Specific procedures and guidelines are followed in the process of using Amazon FBA.

1. Firstly, you are required to label, pack, and send their products to one or more of Amazon fulfillment centers, which are operated by robots and Amazon workers.
2. On arrival, your products are sorted and recorded in the inventory. You do not have to worry about the safety of the goods, because Amazon takes good care of them. In case the products are damaged while in the warehouses of Amazon, the online retailer will refund the full retail price of the damaged product. Amazon may decide to distribute some of your goods to other distribution centers based on their demand in those areas. This process is carried out solely by Amazon, but it requires approval from the seller.
3. After your product is properly inventoried and recorded, your listing becomes active and you are able to start marketing your product using PPC (Pay Per Click) or using another advertising platform such as Facebook or e-bay. Advertising is not a must, and therefore you can decide not to do so.
4. When a buyer orders your good on Amazon, the online retailer takes care of the transaction on your behalf. Amazon ensures the product is properly prepared and processed for transportation. The entire process is automated and therefore, very fast. In cases where you are using another website such as e-bay, the orders are processed using the Multi-Channel Fulfillment (MCF) either manually or automatically.
5. The product is then packed in a box and sent to the customer. The item is shipped from the warehouse, which is closest to the buyer’s location. Information provided by shipping status on Amazon can be used to check on the status of delivery.
6. Amazon makes a follow up on the status of the product immediately after the customer receives it. If there is a problem with the good, Amazon will take care of it and even replace it if necessary.

   Don't use plagiarised sources.Get your custom essay just from $11/page

   GET CUSTOM PAPER

Amazon FBA does almost everything for you, but you still have to carry out some tasks on your own. They include:

1. As a seller, you will have to decide the goods that you will sell on Amazon. After that, you will let Amazon handle all the rest.
2. You will also have to ensure that the goods availed to Amazon are enough, and can satisfy the demand. Amazon will inform you when you are running low on stock. You should ensure you replenish the goods and ensure they are enough.
3. Amazon is not in charge of advertising your goods. Many items are found on Amazon, and it can be hectic for a buyer to find your product. You will have to make sure your product is easy to find by conducting vigorous promotion and advertising. There are several ways you can do this, for example, using PPC.

There are some factors that you have to consider before deciding whether selling your goods using Amazon FBA is a good idea. It is advisable to use FBA for your business if:

1. You use Amazon as an online major selling platform. The use of FBA will help you increase sales and also help in marketing through Prime and internal advertising. Amazon will also handle the hectic duties such as shipping on your behalf. This will give you time to focus on other vital activities such as looking for new products, increasing the amount of goods delivered to Amazon and looking for new clientele.
2. You do not solely sell your goods on Amazon only but also on other platforms, for example, Etsy or eBay. If this is the case, FBA provides an excellent opportunity for creating and having various ways of selling and shipping your products. This is attributed to the fact that Amazon has ensured that FBA can avail their services on other sites using MCF.

In some circumstances, it is not advisable to sell your goods on Amazon. Such circumstances include:

1. If your sales on Amazon are very minimal, that is, you sell less than 40 items. This maybe because you make more sales using other platforms, then it is not wise to use FBA. Doing so will only inconvenience your business.
2. If your goods have a low-profit margin, meaning it may be difficult for you to pay for the Amazon FBA charges, which are sometimes very high.
3. If the products you are dealing in are bulky, large or slow-selling. The rates for selling these kinds of goods on Amazon are very high. This is because the charges are determined by size and also the amount of time spent in the warehouse. This may prove to be expensive for the business in the long run.
4. If you are using systems which are not compatible with FBA. You may need to manually integrate these systems and this reduces the advantages of using FBA. Some of the systems that work well with FBA include Shopify and BigCommerce. It is easier to sync your orders to MCF and enjoy the benefits of FBA.

If you find yourself in any of the above circumstances, then it is advisable not to use Amazon FBA.

Using Amazon FBA as platform is not free but it attracts some charges. You can use Amazon’s FBA calculator to find out if it is beneficial to sell your products on Amazon. There are two types of Amazon FBA accounts from which sellers can choose from, namely, individual and professional accounts. No charges are made on the individual seller accounts but they have a greater fee on sales. On the other hand, for professional accounts, you are required to pay $39.95 monthly. The sales fees are lower on professional accounts as compared to the individual accounts. It is advisable to get a professional account if you are in a position to sell more than 40 items in a month. Get an individual account if you are only able to sell a few items. The fees charged by Amazon are divided into two:

1. Fulfillment fees- This fee is charged per unit and includes packing, shipping, customer service and profit made from the sale. This is further divided into two subgroups:

Standard size:

2. Small (1 lb. or less)-$2.41
3. Large (1 lb. or less)-$3.19
4. Large (1 to 2 lb.)-$4.71
5. Large (over 2 lb.)-$4.71, add $0.38 for every pound above 2 lb.

Oversized:

8. Small oversized (1 lb. or less)-$8.13$137.32, add $0.38 for every pound above 2 lb.
9. Medium oversized (1lb. or less)- $9.44$137.32, add $0.38 for every pound above 2lb.
10. Large oversized (1 to 2lb.)-$73.18$137.32, add $0.79 for every pound above 90 lb.
11. Special oversized (over 2 lb.)-$137.32, add $0.91 for every pound above 90 lb.
12. Monthly inventory storage fees- This fee is charged per cubic foot for all units stored in warehouses belonging to Amazon based on the month and amount of product moving through the facility. This is also divided into two subcategories:

Standard size:

1. January-September-$0.64 per cubic foot
2. October – December -$2.35 per cubic foot

Oversized:

1. January – September-$0.43 per cubic foot
2. October – December -$1.15 per cubic foot

Below is a guide explaining how you can sell an item online using Amazon FBA:

• First, you need to determine whether you are going to use an individual or professional account. It is advisable to use an individual account if your business can only sell less than 40 items a month.
• The next step is to log in into your account with your email address and provide:

1. Business name and address
2. Seller agreement
3. Telephone number
4. Billing method
5. Tax information (when opening a professional account)

• You will then:

1. Provide your name and address
2. Choose a ‘display name’
3. Verify your identity through a phone call or text message
4. Enter your credit card and bank information

• Add your first listing
• Search for your product and its information and agree to terms and conditions of Amazon.
• You will then have the option to use FBA.
• Then you must choose whether to use FBA label service or stickerless, commingled inventory. It is advisable to choose the stickerless where it is not a must for Amazon to ship the exact product. The FBA service may attract more charges if selected.
• You will then create a shipping plan and provide ship from address and packing type
• The final step is to enter the following information:

1. Enter the number of units you will be sending
2. Choose who will prepare the items
3. Choose who will label the items
4. Weigh your products
5. Buy shipping from amazon
6. Print your labels
7. Deliver your item to a shipping company of your own choice.

Using Amazon has advantages and disadvantages. Some of the benefits include:

• Amazon handles most of the tedious tasks on your behalf, for example, shipping and storing, providing you with free time to do other things.
• FBA is compatible with other online stores such as Shopify, and hence it can accommodate other users.
• Clients are assured that the goods they ordered will be delivered on time and in good condition because Amazon is associated with professionalism.
• Prime members receive an item within one business day.
• FBA users are highly favored, and hence during searches, their products appear higher, and this increases their sales.
• Amazon has a customer center that is operational 24 hours a day to serve customers.

Some of the disadvantages associated with using Amazon FBA include:

• A seller may accrue higher charges because amazon charges $35 monthly for the account and 30% of the value of the product.
• The seller should prepare the products according to amazon’s specifications; otherwise, he/she will be charged additional fees.
• Clients may experience delays during peak season, for example, the holidays.
• Amazon is responsible for branding the shipping boxes and labels, hence sellers lose opportunities to market their brand.

The following are some tips from FBA experts;

• Conduct a research demand for the inventory and be prepared to lose the amount. Ensure you are included in restricted categories to increase your income. The factors that Amazon consider when approving you for these categories include :

1. Seller ratings
2. Having a business account
3. Issuing invoices

• You should be conversant with Amazon’s FBA policies because you can be banned for various reasons:

1. Not labeling an item correctly
2. Leaving an item in the warehouse for a long time
3. Selling counterfeit items

• As a new seller on FBA Amazon you must comply with the required standards because amazon will be monitoring you closely through customer’s feedback.
• You should consider purchasing your products from local stores to acquire exclusive items that are likely to rake in higher profits with reduced competition.