3 Things to Know Before Starting Your FBA BusinessFBAforward
What does “FBA” mean?
Fulfillment by Amazon (FBA) might as well mean “send your product to Amazon.” When using Amazon’s FBA services, you send your products to an Amazon fulfillment center and once received, they will add it to their inventory. Once a customer places an order, Amazon will package it, send it to the customer, and send you the revenue once every two weeks. If the customer has any questions, or concerns during almost any part of the process, Amazon will handle them directly.
With FBA, Amazon takes care of managing your inventories in their warehouse, customer relations, deliveries, and even returns. As any FBA forum will state, it makes your life much easier so that, as a business owner, you can focus on what really matters – the product.
With this being said, there are three important details about FBA that are important if you are thinking about selling using Fulfillment by Amazon.
1. Be aware of the fees
When you sign up on Amazon as a seller, you can be one of two types: An individual or professional seller. As an individual seller you get a free subscription, but must pay referral and closing fees and an additional $0.99 fee for every product you sell. As a professional seller you will have more access to Amazon resources and will pay a subscription fee of $39.99 a month no matter how many products you sell, plus additional referral and closing fees.
If you chose to have your products fulfilled by Amazon, in addition to these fees, you will also pay a series of fees related to shipping and handling of the products. Depending on the product, you are likely to be charged for order handling, picking & packing, weight handling, and storage.
For a realistic estimate of how much it will cost to use FBA per product, it’s beneficial to use the Fulfillment by Amazon Revenue Calculator.
2. Don’t send your products to Amazon blindly
Before sending products to FBA, they must abide by certain rules and guidelines. Amazon has one of the best logistics systems in the world and they seek to maximize efficiency. Since the customer-relations aspect of the transaction is carried out by Amazon, they want to make sure that everything is carried out perfectly.
- If a product has an opening greater than one inch by one inch, it must be placed in a sealed bag
- Small items less than 2 and 1/8 inches must be placed in a sealed bag. For small items the bag size cannot go 3 inches past the dimensions of the product
- Products must be prepared and packaged to sell as a single unit
- If you are selling items as a set, there must be a label stating “Sold as Set”, or “This is a Set – Do Not Separate”
- When filling up extra space in a box – Foam, air pillows, and full sheets of paper are accepted
- Filling the extra space with box peanuts and shredded paper is prohibited
- Fragile objects must be able to withstand at least a minute of shaking within the box
- There must be a double seal for liquid products. If there is only one seal, the item must be placed in a sealed bag
- Each item must have a scan-able barcode (that can be read from outside the bag)
- All products barcodes for a particular product must be the exact type. So if a product is the exact same make or model, but a different color it will need its own distinct barcode. This goes for size as well
- If the barcode is not unique to that specific product a UPC, EAN, or FNSKU must be applied
You can either prepare your products yourself by learning the rules and regulations, or you can hire a 3rd party company to professionally do it.
3. Don’t forget about your other sales channels
By using FBA, you are not limited to selling exclusively through your Amazon page. You can also fulfill orders from your own site, or different sales channels using Amazon’s Multi-Channel Fulfillment.
This means your Amazon page is not the only sales outlet to sell your Amazon warehouse inventory.
Buyers who place orders on your company website can receive the products directly from your Amazon inventory. If you create a “Multi-Channel Fulfillment” order, Amazon will package and ship the merchandise to the specific address you specify.
For an additional charge, if you didn’t want your customer to say, “I got this from Amazon” and instead mention they got it from your site, you can even have it delivered as a plain box, without any Amazon logos or packaging. This can give more power to your brand name while delivering the product efficiently and quickly to the consumer.
Setting up your Amazon business may sound daunting, but you’re not alone. Thousands of successful business owners were in your shoes at one point!
For assistance with your eCommerce logistics, such as shipping, importing, customs, inspection, and other FBA prep, contact us at [email protected].