Are you a business owner considering using Amazon FBA (Fulfillment by Amazon) for the first time? Seventy-three percent of Amazon sellers use FBA to fulfill orders thanks to its many benefits. Benefits include packaging, storing, shipping, and customer service services, which make it significantly easier to sell and distribute your products. Learn more by reading the article below.
What is Amazon FBA?
Fulfillment By Amazon or FBA for short, is a service provided by Amazon to improve the seller and customer experience. For sellers FBA offers storage, packaging, and fulfillment assistance. For customers, they can order with confidence knowing that Amazon is handling the order. Products may als qualify for Amazon Prime – which some rely on. Sellers that use FBA have the ability to store products at Amazon (of course for a small fee) until they sell. When the product sells, Amazon employees then work to locate, package, and ship the product. Of the top 10,000 Amazon sellers, 66% use FBA.
Benefits of using FBA services include access to Amazon’s 24/7 customer service for inquiries, returns, and refunds, subsidized shipping fees, quick and reliable shipping and handling of inventory, access to the Prime audience, more likelihood of winning the Buy Box, and having Amazon’s name associated with your products.
How does Amazon FBA work?
By using Amazon FBA, it’s like having your own warehouse, pickers, and packers! The FBA process is fairly straightforward. Here’s an overview of how it works.
- Sellers source and purchase products to be shipped to an Amazon warehouse.
- Products are received and stored at Amazon fulfillment center. Amazon profits by charging sellers a storage fee which varies depending on how much room the product takes up.
- When the product sells. Amazon will fulfill the order and update seller inventory, If product storage agreement expires before product sells, Amazon can make arrangements to dispose of or return inventory.
- Post sale customer support and returns are handled by Amazon.
- Sellers can be paid out every two weeks by Amazon.
How to ship your FBA inventory to Amazon [ Step By Step]
If you plan to use FBA it will be your responsibility to ship the inventory to Amazon. They provide instructions, but so you know what to expect, here’s an overview of how to ship FBA inventory to Amazon.
- In Seller Central, navigate to “Manage Inventory” and locate your listing.
- On the right-hand side of the top of the page find the drop down menu that reads “edit.” Then, click “Send/Replenish Inventory.”
- Now, enter your “Ship from address.” Choose between “individual products” or “case-packed products.” Click “continue to shipping plan.”
- Once on the shipping plan, enter the quantity of units per case and include the total number of units being shipped. After you enter this information, click Continue.
- If products need to be prepped for shipping protection (for example, bubble wrap) you’ll need to indicate this. Select the product that needs protection on the drop-down. Amazon has specified categories to choose from in which they will assign what kind of prep it needs. If you don’t see the product type on the menu, Amazon does not require it to have prep before being sent. You also have the option to have Amazon to do the prep for a fee of $1.00 to $2.30 per unit.
- Now you choose how your products are to be labeled. Products that require an Amazon (FNSKU) barcode, can be labeled by the seller or Amazon. But of course, if you have an Amazon label, expect to pay a fee (typically $0.55 per unit).
- Then, you’ll find out where Amazon wants to send your inventory; this is based on national demand.
- In the final stretch you’ll choose your preferred shipping service and identify how items will be packed. Input package dimensions and weight and Amazon will generate a price. Then, your items will be ready for shipping. Last details include choosing a ship date and printing labels. Note that both barcodes should be visible on each box. When ready, click “complete shipment.”
How long will it take for FBA to process my shipment?
FBA shipments normally take 2-6 days to process once they have been delivered to an FBA center. In some cases delays can occur such as seasonal delays, mistakes in the packaging process, staffing issues, and so forth. It’s important to track shipments all the way through and pay attention to notifications. Shipment errors can cause you to be low or out of a product, thus resulting in missed sales. With Amazon payout coming bi-weekly and shipping delay occurring from time-to-time, sellers may need to leverage affordable inventory funding to keep cash flow healthy. To learn more about an affordable inventory funding method, check out Kickfurther.
Does Amazon charge for shipping to warehouse FBA?
Amazon does charge for shipping to their warehouse, which is on top of FBA fees. To help sellers save money, Amazon has Partnered Carrier options. If you choose to use an Amazon-partner carrier, the carrier should provide a shipping label. Once shipments are sent to FBA, you should see the charge on your FBA account labeled “inbound transportation charge.”
Is it better to use FBA or ship your inventory yourself?
Most Amazon sellers will highly recommend taking advantage of FBA. However, there are circumstances where there may be better options. Evaluate your store location, shipping duration, and technology to determine if you can successfully fulfill orders. Some businesses that consider self-shipping ideal, include:
- Retailers selling bigger and heavier items
- Sellers with the staff, technology, and processes to handle customer service (pre and post sale), returns, and fast fulfillment and shipping
- Seller with plenty storage space
- Items with a low turnover
Some advantages of self-shipping include:
- Sellers may enjoy having total control of inventory and the order fulfillment process. This also gives you total control over your brand.
- Some consumers prefer items shipped by the seller directly, especially if they are known for a stellar brand experience.
- Frequent or large shipments through major carriers such as UPS or FedEx may qualify for discounts
- Maintain full control over data, analytics, and sales reports
- Take advantage of full control over pricing
- Keep costs down with less fees and more control
Although self-shipping works for some, using FBA is more popular. But, don’t take our word for it, look at the data. In 2020, 65.3% of Amazon sellers were using FBA, compared to 28.7% using FBA + self-shipping.
Businesses consider using Amazon’s FBA ideal for:
- Sellers with small and lightweight products with healthy profit margins
- Turnover rate is high and or you’ve determined sales trends
- Sellers that pool or comingle products may benefit
- Sellers that need more storage space should use FBA
Some advantages of using Amazon FBA include:
- It takes the headache out of order fulfillment
- No investment in a warehouse including staff and warehouse management systems is needed
- Opportunity for sales 24/7, 365
- Ease of mind because Amazon’s stellar reputation in order fulfillment
- Shipping rates are lower than if you were self-shipping
How Kickfurther can help
Amazon sellers need plenty of inventory in such a competitive marketplace. Plus, with Amazon paying out bi-weekly, sellers may struggle with cash flow. While you can take advantage of FBA to reduce overhead costs, funding for inventory may still be a challenge, This is where Kickfurther comes in.
Kickfurther funds up to 100% of your inventory costs on flexible payment terms that you customize and control. With Kickfurther, you can fund your entire order(s) each time you need more inventory and put your existing capital to work growing your business without adding debt or giving up equity.
No immediate repayments: You don’t pay back until your new inventory order begins selling. You set your repayment schedule based on what works best for your cash flow.
Non-dilutive: Kickfurther doesn’t take equity in exchange for funding.
Not a debt: Kickfurther is not a loan, so it does not put debt on your books. Debt financing options can sometimes further constrain your working capital and access to capital, or even lower your business’s valuation if you are looking at venture capital or a sale.
Quick access: You need capital when your supplier payments are due. Kickfurther can fund your entire order(s) each time you need more inventory.
Kickfurther puts you in control of your business while delivering the costliest asset for most CPG brands. And by funding your largest expense (inventory), you can free up existing capital to grow your business wherever you need it – product development, advertising, adding headcount, etc.
In closing, we encourage you to start or continue down your path as an Amazon seller as it’s full of opportunity. Online marketplaces such as Amazon have created much opportunity for consumers and entrepreneurs. And, as time goes on – it only seems to get better and better. As an Amazon seller you’ll need to stay up-to-date with changes and regulations and understand the market for your products. Most importantly though, you’ll need to have enough products in stock so you never miss out on an easy sale opportunity.
Interested in getting funded at Kickfurther? Here are 3 easy steps to get started:
#1. Create a free business account
#2. Complete the online application
#3. Review a potential deal with one of our account reps & get funded in minutes