What is Amazon FBA (Fulfillment by Amazon)? Definition, Guides, and Benefits

share icon
Amazon FBA (Fulfillment by Amazon) How It Works Explained image


Amazon FBA, or Fulfillment by Amazon, is a program that allows sellers to sell their products on Amazon and have them fulfilled by Amazon.

This means that Amazon handles the storage, packaging, and shipping of the products on behalf of the seller.

The FBA program allows sellers to send their products to Amazon's fulfillment centers, where they are stored until a customer places an order.

When a customer places an order, Amazon picks, packs, and ships the product to the customer. Amazon also handles customer service and returns for the seller.





There are several benefits to using the FBA program to sell products on Amazon, including:



  1. Wider Audience:
    Through the FBA program, sellers can use Amazon's massive customer base and reach a wider audience.


  2. Improved customer experience:
    Amazon's fulfillment process is known for being fast and reliable, which can improve the customer experience and lead to more positive reviews and repeat business.


  3. Reduced workload:
    Once a seller's inventory has been sent to the fulfillment centers, Amazon handles everything that has to do with receiving customers' orders to packaging and delivering the products to the customers.
    This enables sellers to focus on other aspects of their business, such as product development and marketing.


  4. Lower Shipping Costs:
    Amazon FBA allows sellers to take advantage of Amazon's negotiated shipping rates, which can be lower than the rates that individual sellers can negotiate on their own.
    ## nl


  5. Reduced Storage Costs:
    Amazon FBA gives sellers access to Amazon's warehouses for storing their products. This eliminates the need to maintain their warehouse or storage space, which can be costly.


  6. Access to Prime Members:
    Amazon FBA products are eligible for Amazon Prime, which can increase sales and exposure for sellers.


  7. Increased Customer Trust:
    Because Amazon has already built trust with a larger audience.
    These will help you automatically gain customer's trust when selling on the platform.


  8. Access to Amazon Prime: Products fulfilled by Amazon are eligible for Amazon Prime, which can attract more customers and increase sales.




What You Need To Sell Products on Amazon using the FBA program



Create an Amazon seller account:


The first is for sellers to create an Amazon seller account and choose the FBA program as their fulfillment option.



List products on Amazon:


The next step is to create product listings on Amazon's marketplace and set prices for their products.



Source and ship products to Amazon:


Sellers are to source products and ship them to Amazon's fulfillment centers, where they will be stored until sold.
Amazon provides sellers with the addresses of their fulfillment centers and detailed instructions on how to ship products to them.

You can find the addresses of Amazon's fulfillment centers in your Amazon seller account, under the "Inventory" tab, by selecting "Manage FBA Inventory."
When you create a shipment plan in your seller account, Amazon will provide you with shipping labels that include the address of the fulfillment center where you are sending your products.

You can print these labels and attach them to your boxes before shipping them to Amazon.
Amazon also provides guidelines on how to label and package your products for shipment, to ensure they are processed quickly and efficiently.

These guidelines include instructions on how to label your products with FBA labels, how to package them securely, and how to ensure they comply with Amazon's packaging requirements.

If you have any questions or concerns about shipping your products to Amazon's fulfillment centers, you may want to contact Amazon's seller support team for assistance.

Here are some steps on how to go about shipping your products to Amazon fulfillment centers:


  • Create a seller account on Amazon.

  • Once you have a seller account, create a product listing for each item you want to sell on Amazon.

  • Create a shipment plan to specify which products you are sending to Amazon and how many of each. Amazon will provide shipping labels for you that you can print and attach to your boxes.

  • Prepare your products for shipment by labeling them with FBA labels, ensuring they are securely packed, according to Amazon's packaging requirements, and creating a shipment plan in your Amazon seller account.


  • Pack your products in boxes and ship them to the designated Amazon fulfillment center. You can use any carrier you prefer for shipping your products to Amazon.


  • Once your products arrive at the Amazon fulfillment center, you can track your inventory levels and sales within your seller account.




Monitor and manage inventory:


Sellers need to monitor their inventory levels and restock products when necessary to ensure they remain in stock on Amazon.



Manage customer service and returns:


While Amazon handles customer service and returns on behalf of the seller, sellers need to monitor customer feedback and respond to any issues that may arise.



Although Amazon FBA is a platform for sellers to sell their products with a limited workload, it is also essential to remember that Amazon charges some fees before the fulfillment, storage, and referral of products.
Such fees include:



Fulfillment Fees:
Fulfillment Fees are fees Amazon charges for picking, packing, and shipping your products to customers. These fees can be evaluated by the weight and dimensions of your products, as well as the location of the customer.


Storage Fees:
Amazon charges storage fees for products stored in their fulfillment centers.
The fees are based on the space your products occupy and the time of the year.


Long-Term Storage Fees:
If your products have been in Amazon's fulfillment centers for over 365 days, you will incur a charge for a long-term storage fee.


Referral Fees:
Amazon charges referral fees for each item sold on its platform. The payments vary based on the product category and the selling price.


Advertising Fees:
If you use Amazon's advertising services, you will be charged advertising fees based on the ad format and placement.

In conclusion, Amazon FBA offers a great opportunity for sellers to expand their reach and grow their business without the hassle of maintaining a physical shop and handling packaging and delivery.
However, to run a successful brand on Amazon FBA, it's essential to carefully consider the costs and fees associated with the program and invest in high-quality products, effective marketing strategies, and excellent customer service. With the right approach and dedication, Amazon FBA can be a cost-effective and profitable way for sellers to grow their business and reach a wider audience.

Related articles

Uncertainty rules currency markets as external

Currency outside banks hits N2.35trn


  More articles »