A Complete Guide to Fulfillment by Amazon (FBA)

A Complete Guide to Fulfillment by Amazon (FBA)


An e-commerce business is working a lot

  fulfillment-by-amazon-ecommerce

So, you are a solo entrepreneur selling branded wiffle-ball bats that you find in the store's article stores. sport. Or maybe you are a craftsman with a small team of workers who make high quality frames. You may be a big maker of coffee makers that processes tons of orders daily.

Whatever products you move and how you buy them, you have a lot to gain. You must develop your product. You need to optimize your Facebook advertising campaigns. You must manage the finances of your business.

Translation: You do not have the time to manage inventory, package and ship each order, and oversee customer service processes. Whether you are already selling on Amazon or have seriously considered it, there is a solution: Fulfillment by Amazon or FBA.

What is Fulfillment by Amazon?

Fulfillment by Amazon (FBA) is one of two basic runtime options offered to Amazon sellers. The other one is called Fulfillment by Merchant (FBillment by Merchant) – a system whereby the seller (you) takes care of packing and shipping orders directly to the customers. customers. FBM sellers primarily use Amazon to reach consumers and generate demand.

Amazon summarizes FBA well in Seller Central: "You sell it, we ship it."

That's how it works.

FBA Step 1. Send your products to an Amazon distribution center.

It goes without saying that the products you send to Amazon must already appear in your Seller account. You do not want your products to be stored in an Amazon warehouse they're not on sale on Amazon.

You must label all of your products, which you can do independently or through Amazon's FBA labeling service. Then you ship your inventory via Amazon or with an operator of your choice.

Step 2 of FBA. Amazon is taking up storage.

When your inventory arrives at the warehouse, Amazon scans the labels you have attached, weighs and measures each package and stores everything accordingly.

You will use online inventory tracking to stay on top of your inventory.

FBA Step 3. Someone order your product on Amazon.

Amazon takes charge of choosing the product in its inventory, sending it for shipment and sending it to

How much does it cost to execute by Amazon Cost

When you calculate the costs of use of Amazon FBA, there are several categories of customers. fees to consider Let's look at each category in turn.

  Calculation of Expense Fees by amazon

General Expense Charge

The costs to which you will be mainly dealing are general costs of execution, which depend on two factors: size of your product and the total weight of shipping.

Standard products are things that weigh a few pounds at most: a wallet, a sweater, a kettle, etc. These are grouped into four levels:

Small Standard

Large Standard

Larger Standard

Largest Standard

Weight

<12 oz.

12 oz. to 1 lb

1 lb to 2 lb

2 lb to 20 lb

FBA Tax

$ 2.41

$ 3.19

$ 4.71

4, $ 71

+

$ 0.38 per pound on 2 pounds

TV, a large comic tea kettle etc. Again, Amazon groups these products into four price categories:

Oversized Small Size

Oversized

Large Size

Weight

20 lb to 70 lb.

70 lb to 150 lb

70 lbs to 150 lbs.

> 150 lbs.

Long Side + Girth

<130 in.

<130 inches.

<165 inches.

> 165 in.

FBA Fee

$ 8.13

+

$ 0.38 per pound on 2 pounds

$ 9.44

+

$ 0.38 per pound on 2 pounds

$ 73.18

+

$ 0.79 per pound on 90 pounds

$ 137.32

+

$ 0.91 per lb. on 90 lb.

Now is the time to calculate the shipping weight.

For standard products weighing less than 1 lb and oversized special products (strange grouping), the shipping weight is simply the sum of the product weight and the weight of the packaging .

Shipping weight = product weight + package weight

packaging weight plus weight of product OR volumetric weight (the highest).

Shipping weight = product weight + package weight

Shipping weight = volumetric weight + weigth weight

BY THE WAY

Dimensional weight = (length x width x height) / 139

which weighs 2 pounds. This makes it a "most important standard product". The dimensions are 12 x 6 x 6 inches, creating a dimensional weight of 3.1 lbs. The dimensional weight is greater than the weight of the product. That's what Amazon uses to calculate your total shipping weight.

A volumetric weight of 3.1 lbs plus a 0.9 lb. packaging weight make a total shipping weight of 4 lbs. Since the lunch box is a "most important standard product", the BAF charge is $ 4.71 plus $ 0.38 per pound. 2 lbs. The lunch box weighs 2 lbs. Thus, the total shipping cost amounts to:

$ 4.71 + ($ 0.38 x 2) = $ 5.47

  achievement by amazon-math-meme

Storage Fee

Amazon bills you money according to the space you occupy in the warehouse. Your storage costs are based on the volume (cubic feet) you occupy and you are charged each month.

For example, your storage charges for the month of September are billed a week or two before the month of August.

Math is much simpler than the math we just did:

Month

Standard Products

Oversized Products

January – September

$ 0.69 per cu ft

$ 0.48 per cu. Ft.

October – December

$ 2.40 per cu.

$ 1.20 per cubic foot.

You can determine how many cubic feet a given package takes by dividing the volume (length x width x height) by 1,728 (12 x 12 x 12). So if a package measures 16 x 10 x 10 inches, it's a volume of 1,600. Divide that by 1,728 and you get 0.93 cubic feet – or 64 cents.

You may be wondering why it is more expensive to store smaller products. Amazon claims that it is more difficult and expensive to store these products properly. We will take their word for it.

Removal Order Fee

You may pay Amazon so that you may return a portion (or all) of your inventory. You can also pay for all the products you did not sell or sell. Anyway, you will be charged per article.

Order

Standard Product

Oversized Product

Back

$ 0.50

$ 0.60

Sale

$ 0.15

$ 0.30

Miscellaneous Expenses

  • Unexpected Turnover Tax : If you send your inventory to an Amazon warehouse without proper labeling or preparation, they will repair it and load it.

  • Returns Processing Fee : If a customer returns something to Amazon and qualifies for free returns, Amazon will charge you a return processing fee equal to the initial processing fee.

  • : If your inventory stays in an Amazon warehouse for more than six months, you will be charged. If you do not expect something to sell before the six month term, you can ask Amazon to return it and pay the withdrawal fee.

The benefits of accomplishment by Amazon

passed several hundred words, you may think that FBA benefits Amazon and only to Amazon.

  accomplishment-by-amazon-group-laughter

Not so fast, partner.

FBA Advantage # 1: More Time to Grow Your Business

The use of Amazon FBM involves the management of inventory, labeling, marketing and sales. packaging, shipping, tracking and customer service. If you operate your ecommerce business from your living space or from a small office, you probably do not have enough room for all that noise.

Moreover, by entrusting these responsibilities to Amazon, you devote more time to focusing on things that improve and develop your business: product development, market research, online advertising campaigns, SEO, partnerships, etc. If you can not devote enough time and energy to these practices, your business simply will not be viable.

BFA Advantage # 2: Winning Consumer Confidence

Americans Love Amazon. More importantly, the Americans trust Amazon. When you order Scooby-Doo slippers with a two-day expedition, you sleep knowing that your feet will be both comfortable and whimsical in 48 hours.

As an FBA seller, your product listings "Filled by Amazon" for all potential buyers to see. The effect this has on your sales is irrefutable – customers automatically trust you more.

<img src = "https://wordstream-files-prod.s3.amazonaws.com/s3fs-public/styles/simple_image/public/images/media/images/amazon-fba-take-my-money. ? WvnISQb2Z8CQewTCGV5yJDxZm7PqVw.q & itok = PMXxERY_ "width =" 1023 "height =" 576 "alt =" FBA Advantage # 3: Eligibility Automatic Premium

Nearly two-thirds of US households have Amazon Prime. 85 million consumers use the leading service.

No one pays for Amazon Prime who will buy non-eligible products Why opt for standard shipping (5 to 8 business days) when you can get your Mason jars In a fraction of the time, the Prime logo also exploits this trust factor that we just talked about.

Do not miss tens of millions of enthusiastic and confident consumers.

BFA Advantage # 4: The Box of purchase coveted

The Amazon buy box is the white box on the right side from a product details page where the "Add to Cart" and "Buy Now" buttons are live.

 Achievement-by-amazon-boy-box

where the money is made on Amazon. To be specific, 82% of Amazon's purchases made on desktops are made via the purchase box. This number is even higher for mobile purchases.

Amazon uses an algorithm to determine which vendor is represented in the context of purchase and for how long. The details of the algorithm are for another blog post, but one factor is relevant here:

FBA sellers have a lot of preference when it comes to the box of purchase.

The drawbacks of accomplishment by Amazon

be clear – Amazon FBA is not a heavenly bonus of good times and warm hugs. Before opting for this run option, you must understand the two main disadvantages.

FBA Disadvantage # 1: Fees on Fees

As you'll remember in a previous section, Amazon FBA costs money. In fact, all charges taken into account, the costs can be very high.

While we believe these costs are worthwhile, we understand that your company may not be able to afford them in addition to essential expenses such as manufacturing and marketing.

BFA Disadvantage # 2: Confiscation Control

It is not (that) strange to think of your e-commerce as your child. You have built this idea from scratch, and you are rightly proud of it.

As such, you can not be delighted with the idea of ​​taking the reins for storage and shipping. If lack of supervision and personal control makes you feel uncomfortable, Amazon FBA is not for you.

So, the satisfaction by Amazon Worth It?

The answer to this question comes down to three factors: "shipping per month, the size of your profit margins and the niche of your market.

 Satisfaction by amazon-target-niche-market

You must move at least 40 items per month to qualify for FBA. If you barely reach this minimum threshold, it may not be worth preparing your inventory in accordance with Amazon's strict guidelines. You probably have an interest in taking on these responsibilities for yourself or through a smaller, more flexible executing company.

FBA is not a good idea for online sellers with small margins. If you do not make a lot of money per sale, it's a safe bet that FBA charges will reduce your margins to zero, if not in the red. While not everything is free, whether in terms of money or energy, you should not be paying for expenses that are not essential to your business.

Vendors of niche products (eg old school gothic music fans do not necessarily need FBA.) Remember that one of the main benefits of FBA is eligibility If an Amazon buyer sees a bunch of fairly identical products, and only a handful of them are eligible, she will immediately cancel those who are not eligible.

. are on the market for your niche product probably not much interested in premium eligibility, they are just happy to have found what they were looking for.

Now, if you sell in a competitive market that transports tons of items a month and generates significant margins, so yes – FBA is a fantastic investment – it's a surefire way to free up your schedule, gain the trust of potential buyers and earn more sales on the p age of product details

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