Fulfillment By Amazon (FBA) is the way to outsource both logistics and order management with Amazon. FBA allows sellers to ship their procutos to an Amazon distribution center, where they store them until they are sold. They are in charge of preparing, packaging and shipping the products.
All products sold and shipped in this way are enrolled in Amazon Prime and delivered for free to all Prime customers.
How does it work?
- You ship the products to Amazon.
- They store them in their distribution centers.
- When a customer purchases one of the products, Amazon collects, prepares, ships, and tracks the order.
- They also manage returns and refunds.
All of this comes at a price. Amazon charges storage fees and fulfillment fees.
However, those fees include Amazon’s 24/7 service, the cost of shipping products to customers, and access to one of the world’s largest and most advanced fulfillment networks.
Advantages of using FBA
- Increase your sales: By using Fulfillment By Amazon,your product offerings gain in visibility and competitiveness. In addition, pThey will be eligible for Amazon Prime,FREE Shipping and many other advantages that will help increase sales and improve competitiveness.
- 24/7 customer service: One of the great advantages offered by FBA is that customer service is fully available 24 hours a day, 7 days a week in the local language of the Amazon websites on which the inventory is sold.
- Sell to new leads: With Amazon’s FBA you can reach millions of new leads anywhere in Europe.
- Manage orders from other sales channels: FBA allows you to manage orders from other channels from the inventory stored in one of its logistics centers. It can be managed over the Internet using a simple user interface, as well as asking Amazon to return inventory at any time.
Disadvantages of using FBA
- FBA comes at a price:Amazon charges expensive storage and fulfillment fees,including long-term storage fees. In addition, sellers are also charged fees for defective or damaged products.
- Long-term storage rates: As we mentioned in the previous point, long-term storage fees apply to units that have been stored in an Amazon distribution center for more than 365 days and are in addition to monthly inventory storage fees.
- More returns: Being an easier return process, the return rates are higher.
- Product Preparation Requirements:Amazon has strict guidelines on how to prepare and ship your items to distribution centers.