What is Amazon FBA?
Fulfillment by Amazon is for any businesses that are looking to outsource their logistics function. Anyone enrolled in the Amazon FBA service can take care of shipping, returns, and refunds. Once a seller gets an order from a customer, they send their products to an Amazon Fulfillment center. Amazon also takes responsibility for its warehousing, packaging, and related functions. It also offers same-day or next-day delivery, thus enhancing customer satisfaction. It helps sellers processes their orders at a faster rate with better serviceability. It is ideal for businesses with high volumes of transactions in a particular category.
How Does Amazon Fulfillment Service Work?
Any seller enrolled in the FBA program sends their products to an Amazon Fulfillment center when they get an order from a customer. Amazon then also takes responsibility for its warehousing, packaging, shipment, and delivery.
Registration for Amazon FBA
To enroll your business under the FBA program, you have to first register as an Amazon seller. Then you must log in to the seller central portal and submit relevant details. Those details include business name and address, GSTIN Number, PAN Card, and bank account details. The next step is background verification, where Amazon will verify your documents. ONce your registration is successfully processed, you can add your product listings on Amazon. and start selling.
Sending Your Products to Amazon Fulfillment Center
Once you have registered your business and listed your products, you can sign up for Amazon FBA. You will need to update additional details on your business. You must also add your chosen Amazon Fulfillment Centers (FC) and your Additional Place of Business (APOB). The process will help you to ship your products to the Amazon Fulfillment Centers once you get an order from a customer.
Delivery when Order Placed
Amazon FBA gets to work and allows you to rest easy once a customer places an order. They take the product from your facility first. Then they store it in their warehouse, conduct quality checks, package it and get it ready for delivery. They offer same-day or next-day delivery to their customers. They also help you track your shipment right from their Fulfillment Centres to the customer’s doorstep.
Amazon FBA Pros & Cons
Let’s have a look at the merits and demerits of the Amazon FBA program :
Some of the biggest pros of using Amazon FBA are:
- Outsourcing Shipping and Logistics: Businesses can depend on Amazon to manage their shipping and logistics functions. All they need to do is to keep track of their orders and inventory.
- Discounted Shipping Rates: Economies of scale helps you pay less for the Amazon FBA shipments. It is much cheaper than doing it on your own or engaging other suppliers.
- Return Management: Amazon FBA also takes care of returns and refund requests from your customers.
- Customer Service Management: The customer service at Amazon helps solve their queries efficiently.
- Quick Delivery: Amazon offers same-day or next-day delivery to your customers under this program.
Some of the biggest cons of using Amazon FBA are:
- Cost: The cost factor can act as a deterrent for many businesses. Plus, this service is suitable only for products having a high volume of transactions.
- More Returns: Amazon FBA program allows open returns, which leads to more customers returning their orders.
- Storage Fees: Products that sit out at the Amazon FCs for a longer time will attract more storage costs. Thus this program is only suitable for fast-moving products.
- Preparation criteria – Amazon follows a strict set of rules for products coming to their warehouses. The seller must fulfill these criteria at all costs.
Tips & Tricks to Get the Best out of FBA
The seller can take some initiatives to enhance the benefits from this program. You can use analytics tools to select top-selling products and enroll them under FBA. Make sure that these products are high selling and can be bundled together to increase their selling prospects. You can also undertake marketing campaigns and engage in regular customer interactions. With Amazon FBA, you can surely build your brand to increase both visibility and sales.
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