How does Amazon FBA work? – Info Entrepreneurship

Chances are that you are one of Amazon’s 300 million customers. If you’re reading this it is also quite likely that you want to get to the other side of this coin and you want to produce rather than consume.

But have you ever wanted someone to answer the question:

Assuming you already made the steps to start selling on Amazon, as you become more experienced you learn and get to understand the amazing machine that is working in the background.

Remember, the abbreviation FBA stands for Fulfilment By Amazon. Thus the entire operation is revolving around how Amazon helps you create an amazing customer experience.

Open an account

Obviously, in order for your business to be able to tap into this business opportunity and incredible infrastructure, you need to sign up for an account.

Amazon does charge a monthly fee for being a player of the game and if you think about it, they created a globally recognised, trusted go-to platform to buy physical products online.

Which means you no longer have to spend thousands of advertising and marketing dollars on your brand to attract customers. This alone is worth the monthly fee.

Not to mention that it comes with a whole host of FBA benefits like the seamless and timely delivery of your products to customers, a huge part of the overall shopping experience.

The next step for you, however, is to establish a presence with your product(s).

Create a listing

Think of Amazon as an enormous and dynamically changing catalogue of products. They have created a library of web page templates which allow you to fill in the details of your product that makes it easy for the customer to compare and decide to buy.

Naturally, Amazon has designed these pages to maximise conversion rates and user experience.

Once you have provided all the mandatory information and details about your product, you made a key step towards becoming an Amazon FBA seller.

If you don’t have anything stored at one of Amazon’s many warehouses and logistics hubs your listing will be inactive, but you can change it in the next step.

Professional packing

Before you send anything to the largest retailer in the world, you must ensure that your items are easy to deal with and are so-called “e-commerce” ready.

This means that your products are prepared, labeled and packaged according to the guidelines and warehouse employees have little to do with them to make them easy to ship.

If you think about it, Amazon Prime customers have a 2-day shipping guarantee and the more professionally packed your cartons are, the more easily Amazon can ship them to your customers.

Good products and fast delivery create a fantastic customer experience which can generate repeat purchases or can help promote your product via word of mouth.

Not to mention one of the most important benefits = positive reviews.

Ship stock to Amazon

Okay, you’ve prepared your products like a professional and you’re ready to send a portion of your overall stock to Amazon.

You may be scratching your head that how on earth are you going to do that?

Well, fortunately, you have an in-built solution in your Seller Central account which makes it very easy to book a courier service to pick up your boxes.

No phone calls or quotes required, Amazon makes the entire process super simple with only a few clicks.

You must know

• The number of boxes you want to send to an Amazon FBA hub
• The dimensions of a box
• The full weight of your box
• How many units/products you have in a single box
• Where you’re shipping your boxes from

With this information, the courier can give you an immediate quote that you can accept there and then.

The beauty of the whole thing that you don’t have to pay the fee there and then, it will be simply added to your Seller Account balance!

So if you’re off to a flying start and say you make a $1,000 in your first week (good for you, I hope you will!), the cost of sending stock to Amazon will be simply deducted from your net proceeds (i.e. the money you will get after Amazon has taken all of its fees).

Fulfillment

Delivery of your products could be quite the logistical challenge and nightmare if you think about it. You will have to have a warehouse with staff who work with your delivery people driving your delivery vehicle to almost any part of the country.

Amazon FBA, however, means that this happens automatically for you. Your products are picked, prepared (they get labels if necessary, which you would have to pay for of course) and shipped to your customers.

Just. Like. That.

Amazon has spent billions of dollars building a well-oiled machine so advanced that your customers receive a push notification on their phones the moment the item they bought is delivered to the right destination.

Life is not perfect and yes, there could be hiccups sometimes. Say for example you are selling running shoes and a customer returns the item as the size is not good after all.

Customer Support

Without you having to deal with something that would eat so much into your valuable time, especially as you’re starting out, the Amazon Customer Support team handles all queries on your behalf 24/7.

Quite frankly, you may still have to deal with the odd request for an invoice perhaps here and there but the lion share of customer queries and/or complaints are handled by Amazon.

And there you have it.

Do you think you have a better understanding how Amazon FBA works?