The Amazon FBA program is one of the most discussed business ventures in the online world. The process of FBA or “Fulfilled by Amazon” means that you send your products directly to their warehouses and they take care of everything else. It’s almost like handing your e-commerce business over to a personal assistant—someone who will manage, market, ship, and store your inventory so you don’t have to. The only catch is that you have to pay them a fee for their services, but those costs are minimal compared to what you can make on Amazon if you know what you’re doing. To learn more about how the FBA program works and whether it’s right for your business, keep reading.
What is Amazon FBA?
FBA stands for “fulfilled by Amazon.” It’s a program that lets you send your products to Amazon’s warehouses, which they will then ship out to your customers when they place an order. Basically, it’s like having Amazon act as your shipping and fulfillment center, except that you have to pay them a fee for their services. That fee is different for every business, but for most sellers, the fees are pretty minimal compared to the amount of money they’ll make through Amazon’s robust sales network. As an Amazon FBA seller, you don’t have to worry about things like sourcing inventory, marketing your products, or shipping orders. You just take care of making your products and sending them to Amazon. Once they’re in their warehouses, Amazon takes care of the rest, including marketing your products on their website. Not only does that free up your time and energy, but it also gives you access to Amazon’s massive sales network.
How Does Amazon FBA Work?
Most sellers start with a single box and grow from there. You can send as many boxes as you want to Amazon’s warehouses and they’ll store them while you send more. Once you’ve reached the point where you don’t have any more room in your garage, you can hire employees, rent a space, and create a legitimate business. Amazon FBA sellers ship their products to Amazon’s warehouses, where Amazon employees will store them. Amazon also pays employees to pick, pack, and send products out to customers as they place orders.
3 Things You Can Sell Through Amazon FBA
When it comes to selling on Amazon, there are three things that you can typically sell through Amazon FBA. These are things that are easy to ship, have a high profit margin, and don’t require special licensing or certifications. – E-Commerce Products – This is pretty self-explanatory. You can sell any products you find online, from handbags to computers. – Hard Goods – Any products that you can’t ship via air or water, but can still send from one state to another. This includes things like gardening equipment, sporting goods, and tools. – Services – Anything intangible. This could be things like web design or digital marketing services.
How Much Does Amazon FBA Cost?
There are two different ways to sell on Amazon through the FBA program. One is “fulfillment by merchant,” which means that you pick and pack your own products, book your own trucks, and send your own freight to Amazon’s warehouses. The other is “fulfillment by Amazon,” which means that Amazon handles all of the logistics of shipping your products to customers. For the first option, you pay Amazon $2.50 per cubic foot per month to store your products. This means that if you’re storing a 24” x 36” x 36” box, you’ll pay Amazon $107.36 a month. If you’re storing a 48” x 48” x 48” box, you’ll pay $220.96. You can find more information about Amazon’s fees here.
Why You Should Use Amazon’s FBA Program Anyway
As you can see from the list above, there are a lot of different types of products that you can sell through Amazon FBA. However, most of those products aren’t suitable for FBA. For one thing, you don’t want to sell things that are heavy or bulky. Amazon will charge you a lot more to ship these items and they’ll be harder to store. You don’t want to sell products that are delicate either—especially if you’re storing them in Amazon’s warehouses. Amazon employees are great at their jobs, but they’re not as careful as you might be. So if you’re going to use Amazon FBA to sell a product, you want it to be something that isn’t too heavy, isn’t too delicate, and has a high profit margin.
The Bottom Line
Amazon FBA is a great way for new e-commerce entrepreneurs to get their feet wet. It allows you to scale your business quickly, without having to deal with the headache of logistics and shipping. It also gives you access to Amazon’s network of customers, which is the single most important part of any e-commerce business. With that said, you don’t want to sign up for FBA if you’re selling things that are too heavy, too delicate, or don’t have a high profit margin.