Everything you need to know about FBA

Everything about FBA

  • FBA stands for Fulfilment by Amazon 
  • How does FBA work? 
    • Seller send the products to the Amazon warehouse 
    • Amazon offers its warehouse space for storage 
    • Amazon picks, packs, labels, ships and tracks every order directly 
    • Amazon handles returns and refunds 
  • Benefits of FBA 
    • More time to focus on the business 
    • Products under FBA subscription are eligible for Amazon Prime benefits 
    • FBA subscribers only pay for services they use 
    • Customers trust FBA 
    • Sellers do not have to stress about manpower, storage space, packing or delivering orders even as the business expands 
    • Excellent customer service 
    • Cash on delivery hassles managed by Amazon 

Link to Amazon page

  • Why is it NOT RECOMMENDED to send goods directly to the Amazon warehouse? 
    • Amazon isn’t an importer so the seller will have to higher a freight forwarder to take care of duties and taxes 
    • Courier companies that multitask as freight forwarders are available 
    • Sending the whole lot to Amazon warehouse can attract “Long Term Storage Charges” 
    • The seller will have to get a thorough and detailed pre-shipment QC done to avoid quality issues 
    • Damage of goods during shipment may be ignored 
  • It is recommended to check and send small quantities of the product to avoid hassles! 

How can a seller send the goods to Amazon warehouse?

  • Courier 
    • Most viable option if the quantity, size and weight of the parcel is small 
    • Amazon approved courier is the best way to go  
    • The seller can place a service request online and Amazon takes care of the rest 

Link to Amazon approved courier services

  • Pallet 
    • Option for products which are large and bulky 
    • Cheaper than courier 
    • Pallets need to meet Amazon requirements 
    • Shipping companies need to be Amazon approved 

Link to Amazon LTL page

  • What are “Long Term Storage Fees”? 
    • Amazon levies penalty to sellers for products that are stored for more than 6 months 
    • Audit for the same is done of the 15th of February and 15th of August every year 
    • It is recommended to dispose of the products if the net value is low 
    • Amazon offers to courier the products back to the seller for a fee which is not recommended for cheap and everyday products 

Link to Amazon Long Term storage fees page

  • A seller can easily manage inventory and avoid long-term storage fees or can keep the product always available by checking the inventory dashboard on Amazon’s seller central. 
  • Amazon also offers a service to fulfill orders outside its environment, but it is not recommended because 
    • Hampers the brand image as the product is delivered by Amazon in Amazon brand packaging 
    • Attracts buyers to Amazon providing them with more choices 
    • The fees charged by Amazon are quite high 

Link to Amazon fulfillment page 

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