Amazon FBA seems more popular than ever. As the world still mulls over bringing lockdowns to an end, there are a thousand precautions one many need to take before coming back to business as usual. And as uncertainty stares us in our face, businesses do realize that eCommerce is the way to sell, especially for products.
But, way before this situation ever invaded us, Amazon FBA had been on its way to becoming one of the most trusted and popular ways to sell online. Now, as more businesses head towards it, it is more important than ever to know what it is and how it works.
What is Amazon FBA
Simply expanded as Fulfilled by Amazon, this selling model allows sellers to sell with Amazon with all backend operations taken care of by Amazon. That means you can leverage an infrastructure worth millions of dollars for selling your products, even if your business is a small business. So, all you actually do is produce/distribute and put up your listing on Amazon, and not spend thousands of dollars on storage and logistics and staff and still be able to provide quick and free delivery to your customers.
Is that it?
No!
Being an FBA seller means that your products will be more visible to Prime members. And here is something you need to know.
As per an analysis by CIPR (Customer Intelligence Research Partners, LLC) released as early as 2017,
Prime shoppers spend about $1,300 per year (on average) as compared to about $700 per year that non-member customers spend.
That’s almost double. And that, of course, didn’t stop in 2017, given the volley of offers that Prime members are showered with.
So, it’s evident that FBA sellers end up selling much more than regular Amazon sellers.
How does FBA Work?
If there is one word that can describe FBA selling, it’s simple. How you can make the best of FBA selling is another story altogether because that is a part you need to fulfil, not Amazon. So, later about that. First, let’s see how exactly does FBA work.
So, there are a few simple steps you need to follow.
1. Sign Up for FBA
You can sign up on the same Amazon portal as is used to shop from. By uploading the necessary information and documents you will be able to register and will be given access to Seller Central where you can manage selling. Here is where you can upload your product listings.
2. Upload your Product Listings
This part is absolutely on you. You need to provide the product listings that make your product sellable. Make sure you add the best of product images and descriptions to help yourself sell better.
3. Send your Products to Amazon
Then you just send your product stock to Amazon warehouse. Amazon will help you find which location you must send it to according to your products.
4. Amazon FBA will Sort and Store the Stock
Upon receiving, Amazon will sort and store your inventory. Also, as and when it keeps getting sold, the warehouse will update you about any shortages as they happen and you can replenish them.
And, on the off chance any of your stock gets damaged in the warehouse, it’s on Amazon, and you will be duly reimbursed.
5. The Customer Buys your Product
As customers place order for your product(s), Amazon will take care of the selling process including transactions. When they have received the payment and marked a product sold, your inventory will be updated.
6. Amazon Packages and Ships it
As per the order, Amazon picks, packages, and ships the products from their warehouse to the customer.
7. Amazon Also Handles Customer Care
Anything customer care needs that arise after sale is also taken care of by Amazon. All follow ups for rating and reviews are done by Amazon’s automated services. They will also handle any returns/replacements and queries.
But if you receive any feedback from the customer on the listing, it is up to you revert and act.
8. You Get Paid for your Sale
Amazon will deposit your sale proceeds in your bank account every two weeks (after deducting their fee).
Sorted? Well it is very simple to understand. However, there are things that need to be taken care of at your end.
What you Need to Do to Make FBA work for you
Research, Analyze, Finalize
The very first thing you need to do to make FBA work for you is research well enough about your competitor products on Amazon, analyze how pricing is working for them, and finalize which product you should sell and for what price. A good idea is to select 2-3 hot selling items.
Focus Well on Product Listings
With Amazon FBA you do have the advantage of being more visible in the portal, and to Prime members in particular. But if you have inadequate, ineffective listings, Amazon cannot help you sell as much as it should.
Writing product listings that not only describe the product well but also make it look desirable, especially through ample high resolutions images can be a huge push for the customer to buy. Also, titles with the right descriptive words help customers find your product easily.
Keep the Inventory Up to Date
It is Amazon’s job to let you know if your stock is depleting. But it’s your job to replenish it. Keep the inventory updated to enable Amazon to sell without any delays due to shortages.
Consider Marketing
This one may not be so important if you are a reseller. But if you are a seller with a product of your own, maybe you should consider marketing, especially on social media. It helps you get discovered and build a brand image.
So, that is just about what Amazon FBA is and how it works. Nevertheless, there will always be more to learn about how it benefits or limits you. Just like everything else in the world, it has its pros and cons. And we’ll be discussing that in our next post. So, keep looking out.
If you are looking to sell your products on Amazon, we can help you with all the research and tools you need. If you’d like to know more about what we can do for you, let’s talk.