FBA is the acronym for Fulfill By Amazon. Years ago these three letters sounded like a scientific term. Glad to say Amazon fba is becoming more popular these days. The term may seem complicated but it’s actually not. You see, as soon as you start doing Amazon it becomes more obvious. I will try my best to break it down in the simplest form for my readers. If you scroll below you will find the best explanation of how Amazon fba works.
Fulfill By Merchant
FBM…Have you seen this acronym? If not, it means (fulfilled by merchant) You will also see this option on the Amazon sellers central dashboard. Amazon has two ways of managing and shipping products fba and fbm. As a merchant, you will be given the choice to ship the items yourself or send them directly to Amazon. FBM is when the seller chooses to ship the item or items themselves and you will also have to keep your inventory at home. You may want to utilize your garage and spare rooms. It’s not bad at all, this is where Jeff Bezos got started.
This method means the labeling will be done by you and the GTIN can be costly, this is the barcode that is required for every product. You should also consider the fact that you will have to take each order to the shipping company of your choice. Ups. Usps, Dhl, or FedEx. The cost for shipping is paid by the merchant which means in order to make a profit your price will have to be a bit higher than those on Amazon fba. This decision should be thought about carefully.
The next thing is shipping time, Amazon has a feature called (Prime) Prime allows customers to get their order in less than a week. No more long waits with this feature. The downside is with fbm your products will not have fast delivery which can cause the seller to have fewer sales. For instance, if you are shopping and you see a product with a shipment date of two weeks and the other in three days, which will be your first choice?
The upside of Fulfill by Merchant:
In everything, there is an upside and a downside. Above we looked at the cons of fbm. Well, let’s take a look at the pros. Amazon fba charges for everything. Yep, it’s not a free boat ride. There are storage fees, labeling, and packaging fees. These fees are taken from the cost of each product eg: If the price for your product is $15 dollars the Amazon fba fee may be $8 depending on if they have to do any extra packaging then it could go higher. This means you could end up with a profit of $6.
When you do fbm the fees are reduced as Amazon fba will not charge you for storage, labeling, packaging, and shipping. There is no doubt this will make your profit higher. What if you don’t have the time for all of this, then Amazon fba would be your best choice.
How Does Amazon fba Work
Amazon fba (Fulfill By Amazon) is a feature within Amazon that takes care of shipping, customer service, refunds, and packaging. When you choose Amazon fba there is no need to worry about anything except keyword research, product research, and optimization. The merchant will need to work on getting sales, Amazon does not do that they are just the fulfillment center.
So, how does Amazon fba work? When a merchant uses Amazon fba they send the product directly to Amazon. The inventory is done on your Amazon seller central dashboard including getting shipping labels. This is wonderful, Amazon actually allows you to print the labels right there on your computer. Next, you’ll label the boxes, and contact UPS for pick up with just a small fee. UPS is a contract Amazon carrier so the cost is really cheap or you could just take the packages to UPS yourself either way it works.
When your goods arrive you will get an email from Amazon telling you they are receiving the goods. It takes like a week for all goods to be fully in stock. The only thing the merchant has to do now adds PPC and monitor the progress on the dashboard. Amazon fba will do the rest for you.
When you decide to do Amazon fba make sure to do your own research on fees and costs. The price of your product should is able to pay for the fba fees and leave you with a profit. If the merchant follows all the protocols Amazon fba could be a gold mind. How does Amazon fba work? it is as simple as this article explains it.
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