Selling on Amazon FBA: What it is and how it works

Amazon FBA

If you are thinking of selling on Amazon, you have surely wondered how the shipments of your products are managed? Amazon offers you two programs to manage your products and these are: Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM).

What is the difference between the FBA and FBM program?

FBA VS FMB

The FBA corresponds to the logistics system that Amazon offers to its sellers to facilitate the delivery of their products nationally and internationally. Thanks to this program, any seller can store their items within Amazon warehouses and thus be able to transfer responsibility for transportation and customer service to the marketplace to ensure better management of product distribution.

On the other hand, the FBM corresponds to the program where each seller is responsible for the logistics management of the shipment of their products, which implies a greater workload and responsibilities for the companies that decide to take this distribution program.

If you think the FBA program is right for you, keep reading to learn more about it and how you can start managing your orders with the help of Amazon.

What are the benefits of selling on Amazon FBA?

Expand your business in Europe

Thanks to Amazon logistics, you will be able to expand the sales of your products to new markets, since they will help you store and distribute your items based on the countries you want to distribute without having to pay additional costs. In addition, by selling your products through Amazon logistics you can save up to 53% in logistics management fees and increase the speed with which you deliver your products, thus achieving more satisfied customers.

Improve your positioning on Amazon

By selling your products on Amazon FBA, they will have a better location within the search results made by users of the marketplaces. This is because the platform’s algorithm gives priority to those sellers who are part of the FBA program. Remember that having a better positioning within Amazon is a key strategy to increase the visibility of your products and thus maximize your sales.

It adapts to your goals

Amazon cares about always offering you the best service, which is why it offers you a wide range of options when managing your customers’ orders throughout Europe. The specialized services offered by the marketplaces to help you grow your business are:

  • Small and Light Products: This program will allow you to reduce the costs of fulfilling orders for low-priced, small and light products.
  • Subscribe and save with Fulfillment by Amazon: thanks to this service you can offer discounts to your regular customers, thus strengthening the relationship you have with them.
  • Multi-channel logistics: you will be able to manage your orders that have been sold from your own e-commerce or from third parties, with Amazon being responsible for collecting, packing and shipping the orders to your customers.
  • Fulfillment by Amazon for Heavy Items: This service will help you solve the problems of storing and shipping heavy items. Also, Amazon will make sure your customer is always satisfied by providing direct deliveries to their home address and delivery room. You can also delegate the management of returns and customer service for your heavy and bulky products.

Sell ​​your products on Amazon Prime

Products that are managed through Amazon logistics may be included in the Amazon Prime program. This implies great benefits for your customers since they will be able to receive their orders without shipping costs and with priority delivery. This is a great opportunity to generate loyalty with your customers and to prefer your products over the competition.

Your customers will receive excellent customer service

By being part of the FBA program, you will no longer have to worry about customer service, since Amazon will be the one who manages your customer inquiries, refunds and even order returns

Customer service: This service includes telephone and email assistance in various languages, 24 hours a day, 7 days a week.

Return of products: Amazon will help you with the management of customer service in relation to product returns through its online returns center.

How to start selling on Amazon FBA?

Vender en FBA

First: Set up Amazon Fulfillment

To start selling on Amazon FBA you must first have an account in Amazon Seller Central. If you don’t have one yet, don’t worry, we can help you thanks to our guide “7 steps to create your Amazon seller account” where you will find all the information you need to sign up for Amazon Seller Central

If you already have an Amazon Seller Central account, simply select the “Fulfillment by Amazon” option when publishing your product catalogs.

Second: Prepare your products

In order to send your products to Amazon distribution centers, you must prepare your products so that they are transported safely, for which you must follow the packaging and packaging requirements. In addition to meeting shipping and routing requirements.

Third: Send your products to Amazon

Finally, you’ll need to set up a shipping plan, print Amazon Shipping ID labels, and ship your products to Amazon fulfillment centers.

How much does it cost to sell on Amazon FBA?

To sell your products in the FBA modality, you must pay multiple fees, one of which is the fees for registering as a seller, in which you must pay 0.99 euros for each sale you make. However, if you access the pro plan, you will only have to pay 39 euros per month, thus eliminating sales fees.

On the other hand, Amazon also has other fees that you must pay to be part of the FBA program and these are divided into two groups:

Usual rates

As part of the regular fees you will find inventory storage fees and management fees

  • Storage Fees: These amounts are charged for all items stored in an Amazon fulfillment center. The marketplace calculates this value based on the daily volume of inventory measured in cubic feet. Amazon has recently made a change in these fees, so we recommend you read our blog «Changes in Amazon fees 2022: main changes that sellers will face» so that you are up to date with all the news.
  • Management Fees: Amazon charges per unit, the collection, packaging and shipping of your products. In addition, you will have to pay for customer service management and the return of products. To obtain more accurately the fees that you will have to pay for these services, you can use Amazon’s logistics income and expenses calculator.

Occasional fees

  • Storage: Amazon performs a monthly evaluation of all products to identify those products that have been in the fulfillment center for more than 331 days. That is why we recommend that you keep good control of your inventory to avoid having to pay these additional fees.
  • Withdrawal of products: In the event that you are no longer interested in selling your products on Amazon, you can request the marketplace to return or dispose of them, however this implies an additional cost that you must pay.
  • Return process: You will have to pay for all products for which Amazon provides a free return.
  • Unplanned services: This is an amount you will have to pay if your products arrive at Amazon fulfillment centers without proper preparation or labeling. That’s why it’s important that you carefully follow each of the instructions Amazon will provide you regarding packaging requirements and shipping your items to fulfillment centers.

At Década Studio, we help you identify the logistics management that best suits your needs.

Selling on Amazon FBA can represent a great opportunity for your business, especially if you do not have the necessary infrastructure and personnel to manage orders with the same speed and scope as Amazon does.

If you would like to start selling through this program, do not hesitate to contact us and we will advise you on each of the steps you will take to sell successfully within the king of marketplaces.

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Paola Veintimilla

I'm Paola Veintimilla, Marketing Assistant at Década Studio. I like to find creative solutions to problems and I am always looking for new challenges. For me, social networks are a great tool not only to promote brands, but they are also an opportunity to connect with the audience. But in my spare time I'm just a cat lover.