Through the power of eCommerce, Amazon FBA has become one of the most popular ways to earn income online.
What is Amazon FBA?
Amazon rents space in its vast network of warehouses and distribution centers to third-party sellers. This is called Fulfilment by Amazon (otherwise known as FBA). As a seller on Amazon, you can use FBA to manage your warehousing, fulfillment, and aspects of customer service.
By using FBA and connecting Seller Central into a range of different plugins, it is possible to build a hands-off business that can be run from anywhere in the world with minimal owner input.
As your business grows, you need not worry about finding bigger warehouses and employing more staff – simply send more inventory to FBA and let Amazon’s workforce look after your increased requirements. Fixed overheads become variable expenses – so you only pay for what you use.
Amazon has over 140 fulfillment, distribution, and warehousing centers in the United States alone. They use forecasting technology to determine where each item is most likely to be sold, then dynamically move inventory around their network of facilities to ensure that it is as close to potential customers as possible. This reduces delivery times and helps to keep shoppers happy.
How Amazon FBA Works
Amazon handles all the hard work for you within FBA, so the way it works is pretty simple.
1. Send your products to Amazon.
Amazon has about 100 warehouses across the U.S., some of which are over a million square feet.
You tell them what products you’re sending, and they tell you which warehouses to ship your products to.
2. Amazon sorts and stores your products.
Once Amazon receives your products, they’ll sort and add them to their inventory.
Your products are then stored safely in their warehouses.
On the off chance that anything gets damaged in the warehouse, Amazon will reimburse you.
3. A customer buys your product.
Amazon takes care of the entire transaction for you.
They accept payment and update your inventory automatically.
4. Amazon ships your product.
One of Amazon’s warehouse workers (or robots) grabs your product from storage, packs it into a box and ships it to the customer.
5. Amazon handles customer service – well, a lot of it.
Once the customer receives your product, Amazon follows up to make sure they’re satisfied with the shipment.
They also handle any returns or questions from the customer.
As for any feedback you receive on your product listing, it’s up to you to respond and take action.
6. You get paid.
Every two weeks, Amazon totals up all your sales, deducts your seller fees and deposits your profits directly into your bank account.
That’s it! Sound pretty easy? There are a few things you need to do to make sure you’re successful.