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Amazon FBA has become one of the most popular ways to make money online. In fact, more than 2 million people around the world sell products on Amazon.
“Almost anyone can list items for sale on Amazon, whether it’s wholesale purchases, self-made items, or just items you no longer want.”
If you sign up for the FBA program, you can use Amazon’s advanced shipping and fulfillment services to automate order fulfillment and get more sales from Amazon Prime customers who dream of vetting them.
About half of the sales on Amazon come from third-party sellers.
And out of the top 10,000 sellers, 66% of them use FBA.
What is FBA?
FBA means Fulfillment by Amazon.
It boils down to: you sell it and Amazon ships it.
The way it work:
- You send the product to Amazon.
- They store it in the warehouse.
- When a customer orders one of your products, Amazon will pick, pack, ship, and track the order for you.
- They also handle returns and refunds.
All this does come at a price. Amazon also charges storage fees and delivery fees.
However, these costs include Amazon’s excellent 24/7 customer service, the cost of shipping goods to customers, and the cost of using one of the world’s largest and most advanced distribution networks.
Why Amazon FBA is important: Need for statistical data
Amazon has more than 300 million active customers and 90 million major subscribers in the United States alone. The brand exclusively for Prime buyers is a brand that utilizes FBA.
Moreover, Prime customers spend more money on Amazon.
The average customer spends $700 per year on Amazon, while Prime customers spend roughly $1,300 per year.
This means that if you use Amazon FBA and are therefore more visible to Prime buyers, then you can make more money.
How the FBA Works
Amazon does all the hard work for you within FBA, so the way it works is pretty simple.
1. Send your products to Amazon.
Amazon has about 100 warehouses in the United States, some of which exceed one million square feet.
You tell them what product to send, and they tell you which warehouse to ship the product to.
2. Amazon classifies and stores products.
After Amazon receives your product, it will sort it and add it to inventory.
Then, your product will be safely stored in its warehouse.
In the unlikely event of any damage in the warehouse, Amazon will compensate you.
3. A customer buys your product.
Amazon will handle the entire transaction for you.
They accept payment and automatically update your inventory
4. Amazon delivers your product.
An Amazon warehouse worker (or robot) takes your product from the warehouse, packs it into a box, and ships it to the customer.
5. Amazon handles all the service-very good.
After the customer receives your product, Amazon will follow up to ensure that they are satisfied with the shipment.
They also handle any returns or problems from customers.
As for any feedback you receive about the product list, it’s up to you to respond and take action.
6. You get paid.
Every two weeks, Amazon will aggregate all your sales, deduct your seller fees and deposit your profits directly into your bank account.
That’s it! Sounds simple? Here’s few things you need to do to ensure your success.
Amazon FBA best practices
This is what you are responsible for:
1. Choosing the product you want to sell.
You can sell almost anything you like, but if you want to avoid storage fees, make sure to choose products that can sell quickly.
2. Managing your inventory.
You need to check inventory levels on Amazon regularly to ensure that your products are in stock.
3. Marketing and publicizing your products.
If you’re selling highly-ranked brand name products, you may not have to do this.
But if you’re selling your own custom products, you’ll need to make sure people can find them.
There are more than 350 million products in the Amazon catalog, so marketing is essential to find your own products.
In the next article, you will learn the steps, you need to follow, to sell successively on Amazon.