What is fullfillment by amazon (FBA) exactly? I'm here to spread some light.
So what exactly is Fullfillment by Amazon or FBA? Mostly everyone knows what Amazon is and that you can list your products on there, but did you know that you don't have to manage your inventory or shipping? Let me shed some light on this topic
Fullfilment by Amazon is a service offered by amazon to it's sellers that lets the seller send inventory to specific warehouses around the country in order to have Amazon manage your inventory as well as ship it for you. It's a pretty sweet deal because you don't have to rent out a warehouse for your items or if you're a smaller company, you don't have to take up your basement or spare room as a storage area which will just piss off your significant other lol.
Why would someone use FBA?
Well that's simple, because it's pretty sweet! The main reason people us the fulfillment by amazon service is because when you do go through Amazon, your listing will say "Ships and Sold by Amazon.com" which is a huge selling point for people who are on the fence. When someone sees an item for sale on Amazon and sees it's shipped and sold by them as well, they're more likely to purchase your item over someone not using FBA because Amazon is a well known and trusted company. I think that if someone has a prime membership they will usually get free shipping on any item that is FBA since it's being sent out from an Amazon warehouse (not confirmed).
Is there a fee to use FBA?
Well if you had a company that offered storage space to sellers, would you charge for it? There's most definitely a fee to use this service and it's only because you're paying for storage space and also for them to ship out your items. Warehouses have to pay property taxes just like any residential home or other business, so they need to make something off of you in order to profit. If they were nice they could charge you enough to break even, but they wouldn't be one of the biggest companies in the world if they did that lol.
Is there a free to sign up for FBA?
There is not a fee to sign up for the fulfillment by amazon program. You simply just have to arrange a shipment and let them know when you're sending the items to them. They will give you the address and you send them out, it's that simple.
What happens if my items don't sell?
If your items don't sell you can simply request them to be sent back to your home or business so that you don't have to keep paying the storage fee. I've actually had friends pay for hundreds of items to be stored and then they only sell a few. They paid for the storage of all their items but it ended up being a complete flop and they had the items returned so they didn't have to keep losing money on the storage fees.
What kind of fees does Amazon charge to store your items?
I'm not actually 100% sure because it's based on the size of your items and how many you want to store. If you're selling necklaces it will obviously be cheaper to hold 1,000 of them compared to having Amazon holding 100 king sized beds.
Does amazon get a percentage of your sales if you're doing FBA?
Well they don't get an additional percentage if you go through FBA, but they get a percentage of the sale which is normal. Amazon gets a percentage of your sale, nothing crazy like 50%, but you do have to pay them in order to make a sale on their platform.