Fullment by Amazon (FBA) provided by Amazon warehouse refers to the one-stop logistics service provided by Amazon, including warehousing, picking, packaging, delivery, payment, customer service and return processing.
1. Operation mechanism of FBA
Sellers who use FBA need to create a shipping plan in the background of the seller center first, and send the goods to the FBA storage center according to the shipping plan generated by the system. Amazon will provide warehousing services. The Amazon system will charge the corresponding storage fees according to the volume, weight, and duration of the goods placed in the storage center by the seller. Sellers sell these products through the Amazon platform. When customers place an order, the Amazon storage center will automatically provide related services such as sorting, packaging, delivery, payment, customer service and after-sales processing of the goods. Amazon charges corresponding order processing fees, sorting and packaging fees, and weighing and processing fees for each order. For products that have been placed in the FBA warehouse for too long, Amazon will also charge long-term storage fees.
Sellers using FBA basically only need to label the products and ship them to the FBA storage center. Once Amazon receives the products and scans them, they are immediately available for sale. FBA is done through Amazon’s Seller Center, and sellers can track product information and replenish product inventory at any time.
2. Products suitable for FBA
Note that not all products are suitable for FBA. Generally, products with the following characteristics are more suitable for FBA.
(1) Products with excellent quality and performance. Such products generally do not have returns or exchanges, which can greatly reduce the seller’s losses.
(2) Products with small size and high profit. Products with small size are easy to transport and can save costs. However, it should be noted that the product price should not be set too low. Because the use of FBA will incur related handling fees and various transaction fees. If the product price is too low, the profit will also be reduced. It is recommended that the price of products using FBA be set at more than US$6.
In general, FBA is suitable for small and medium-sized sellers who sell products with excellent quality, small size and high profits. For other products, the advantages of using FBA are not very obvious.