How Does Fulfillment By Amazon Work: Costs Of Amazon FBA

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Have you heard of the fulfillment by amazon program? Do you know how this program works? Would you love to know? If you have any questions regarding this program by amazon, then you are in the right place. All you need to do right now is to go through the contents of this article from start to finish. How does fulfillment by amazon work? This question has grown to be so popular over the years. Many people already have learned of the program and therefore want to get in on it. If you are one of these persons, you have nothing to worry about as in a bit and in the course of the entirety of this article I am going to be educating you on how this program actually works.

How Does Fulfillment By Amazon Work

How Does Fulfillment By Amazon Work

Do you know that many businesses and retail outlets online get through to their customers online via amazon? Yes, this is true. Many people want to start up their very own retail outlets online but there are a lot of things to actually know and put in mind before you set out on something of the sort and it is quite unfortunate that most of these persons don’t know about this. A small mistake on your own end or something that you didn’t expect that is quite out of your reach, May make someone not to do business with you again. This mistake might be a breakage in the product seal or delay and delivery and that’s it. A customer may cut ties with you and that’s one customer lost, not good for business. And this is where the fulfillment by amazon comes into play.

In the US alone, the second most reason why people chose online shops and marketplaces is its free shipping features and services. And while free shipping may make a customer do business with you, the delivery experience on the other hand is a very important feature that makes the customer want to do business with you again. Now, what is fulfillment by amazon? Popularly known as FBA, is simple in terms of definition. You sell a product and amazon helps you to ship it for a fee of course. It’s that easy and simple.

Fulfillment By Amazon Work Process

The whole process is simple and here is a detailed list of how fulfillment by amazon works below;

  • Send your items to Amazon fulfillment centers which are located all over the region.
  • Your products get received by amazon. You can monitor your inventory or products via their own tracking system.
  • The customer then orders your product via amazon or any other eCommerce platform.
  • The product is picked up by amazon, packaged, and sold.
  • Your item is shipped by amazon by a method chosen by the buyer who is then provided tracking information.
  • Amazon then provides customer service for your shipped product and also helps in return management for the items sold.

This is just how amazon FBA works. This service by Amazon is not just unique to orders placed n amazon alone. This service also works on other eCommerce platforms. In order to make use of this service by amazon, you will be required to pay a stipulated fee for the services which will be discussed later in the course of this article.

Why You Should Use Amazon FBA

There are lots of reasons why you should make use of Amazon to sell your products. Amazon gives users a platform they ordinarily cannot get or afford. With the services of Amazon, you will be able to not only grow your business but also reach more customers. There is the free 2-day shipping feature where sellers get to increase their sales and in the process save money. Below are some very prominent reasons why you should try out the fulfillment by amazon program;

  • Discounted shipping rates.
  • Great customer service features.
  • Return management.
  • You get to use the service beyond amazon as you can also integrate the service with other eCommerce platforms or your very own online store.
  • Good customer experience which is very important.

These are some of the reasons why you should make use of this service provided by Amazon. Therefore if you haven’t tried out the service as f yet, you should.

Why You Should Not Use Fulfillment By Amazon

Just as the saying goes, anything with an advantage has got its disadvantaged side. Amazon of course has created one of the most sophisticated fulfillment programs in the world today, but it’s not all rainbows and sunshine with this service with Amazon. And it is very important you take a critical look at these aspects of the service before committing to it. Some of the disadvantages of using amazon FBA include;

  • Commingling merchandise.
  • Sales tax compliance.
  • Long term managing inventory and storage fees.
  • Preparing items for shipment.

These are some of the disadvantages of the fulfillment by amazon program.

Costs Of Fulfillment By Amazon

Making use of this service can be great or not so great, but before you should think of trying the service out, it is important that you know just how it costs. Of course, the service is no free. You need to determine the costs of the service to know if it is right for your business or it is what you need at the moment. The fees charged by amazon are broken down into various criteria such as size, weight, and time of the year. The fees charged by this service include;

  • Customer service.
  • Storage per cubic foot per month.
  • Picking and packaging your orders.
  • Shipping and handling your order.
  • Product returns.

These are the main services you would be charged for by amazon. Although, it is important that you know that there are some instances where a change in pricing may occur and they are;

  • Oversized items that may require special handling fees per shipment.
  • Fulfillment and storage fees increase from October to December.
  • Clothing items attract an additional $0.40 per unit.
  • Extra fees for inventories stored for up to six months or longer.
  • Fees such as prep service fees or processing customer return fees in specific categories may apply.

These are the fees of the amazon FBA program.

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