FBA stands for Fulfillment by Amazon. Amazon’s full service enables Amazon retailers to outsource the entire logistical order processing. This includes goods receipt, storage, picking, shipping, and returns management, as well as customer service. In this way, the retailer no longer has physical contact with their products.
How FBA works
If you choose FBA, the goods are first sent to an amazon FBA box label. There, as soon as a customer orders them, the goods are taken from the warehouse, packaged and shipped. Amazon also handles returns management and customer service.
Difference to classic fulfillment
Normally, the retailer is responsible for the entire supply chain. However, there is the option of having these processes handled externally by service providers in fulfillment centers. With FBA, Amazon acts as a fulfillment service provider and takes responsibility for the logistics process as soon as the retailer has sent the goods to one of the fulfillment centers.
Advantages of FBA
The biggest advantage of FBA is that the products are offered on Amazon Prime. This makes them easier to find in the listing and there are no shipping costs for the customer. Another attractive point is that Amazon offers international customer service for FBA users that is available at all times. Amazon also promises professional processing and a free return service.
Disadvantages of FBA
Amazon has a very strong brand power, which can harm your brand. In terms of costs, FBA can also be disadvantageous in the long term due to high and inflexible storage costs. Experience reports also show that the error rate during picking, lost or damaged goods, and rejected deliveries (due to incorrect labeling, for example) are further problems.
The FBA costs are determined based on:
Size
Weight
texture
As already described, these factors provide an immense advantage, especially in international sales.
Is Amazon FBA worth it for me:
Fulfillment by Amazon is certainly a good and viable option for many retailers. But is it the right option for you? What sounds easy and simple in the first few paragraphs is, on the whole, also how it is. However, that does not mean that you don’t have to do anything to make a successful sale and that it is free. Therefore, it is not worthwhile for every seller. You have to calculate precisely here. Items with high margins are generally very suitable. But tracking them down is not always easy. Do you sell third-party products with low margins? Then you should be very careful. As the weight and size increase, the shipping fees for the FBA service also rise. For product groups that experience has shown to have a higher return rate, Fulfillment by Amazon is worthwhile. Perhaps having your warehouse with warehouse management is simply more suitable.
What is the security and fraud situation with Fulfillment by Amazon:
When it comes to security and fraud, Amazon is known for setting very high-security standards. After all, every day, several million customers around the world trust that their purchases on the platform are not only convenient but also processed reliably and securely. Without the pillars that the company has built up for itself, the development of the last few years would not be possible.
How much does FBA cost? Fulfillment by Amazon
The costs are manageable, especially at the beginning. amazon FBA label service beginners test the processes for free and can list their items without any listing fees to start with. This saves many retailers the investment and maintenance of an online shop. Nevertheless, you can use the marketplace’s shipping service for yourself. There is no minimum inventory requirement from Amazon. Theoretically, although pointless, you can start with a single copy of your item. Note: With an online shop, the effort may increase, but so does the chance of remaining independent.
Conclusion on Fulfillment by Amazon
Fulfillment by Amazon (FBA) is a great program, but it has to fit the retailer’s specific focus and products. There is no “one size fits all” here either. So you should think about how you will use it in advance – and thoroughly. Beginners benefit from the intuitive and easy handling of the system. This makes selling on Amazon much easier. In addition, you can quickly and easily present the goods to a growing international audience. The retailer benefits from a really good partner in logistics, a shipping system that works across Europe, and the numerous services that are offered to increase performance. However, you don’t get all of this for free, just as you never get anything for free from Amazon. You should always be aware of this.
