As a retailer or as a whole seller if you too have a question "what exactly is FBA??" Then maybe this short guide may help you. But first thing first...
What is Amazon? (P.S) Not one of the brightest questions but still)
In layman terms Amazon is the world's largest e-commerce website which directly connects a buyer to a seller eliminating the middlemen and hence saving loads of capital and time plus provides plethora of options to buyers to choose from.
But not only for a buyer, it is a boon for a seller as well. Connecting you to hundreds of thousands of customers. But for that...
Create An Amazon Seller Account
--- go to Amazon's website
---in the footer click on "Make Money With Us"
--- click on "Sell on Amazon"
From here the 'sign up' process is practically straightforward
If you are looking to build a business sign up as a "Professional" (here the first month is free and $39.99 after that plus the selling fee)
How To Sell On Amazon?
Selling at Amazon works in two different ways:
1) You can sell TO Amazon
2) You can sell ON Amazon
Sell TO Amazon
Here you can sell your product at a wholesale rate TO Amazon and that’s all you need to do. With this you grant the ownership of the inventory to the company. From here they maintain the stock, they sell it further to their customers and enjoys the retail profit from the product.
This is an invite only program.
Benefits of selling TO Amazon
Bulk sale
Quick and high revenue gain
Eliminates advertising, marketing and other logistics for product sales
Saves money through one time shipping
Avoids hassle of pricing, handling etc.
Sell ON Amazon
The most common and popular of selling is to sell ON Amazon i.e. on Amazon.com as a third-party seller. Third-party sellers contribute to more than half of the total sales of Amazon.
Selling on Amazon gives---
Higher level of control over your product
Higher profit margins
Seller controls shipping and optional fulfillment
Increased workload
Sellers who sell on the Amazon Marketplace have different fulfillment options to choose from. Sellers can choose whether they want to handle fulfillment or let Amazon sort, package and ship products through their own fulfillment centers.
Broadly Amazon provides the third-party sellers with two fulfillment services-
Fulfilled by Amazon (FBA) – Sellers leverage Amazon’s fulfillment for products sold on the Amazon Marketplace
Fulfilled by Merchant (FBM) – Sellers handle fulfillment for their products sold on the Amazon Marketplace
What is Amazon FBM?
With FBM (fulfilled by merchant) the third-party seller handles product listing, product description, storage, packaging, shipping and all the aspects in the process from manufacturing to delivery.
Under FBM seller is responsible for any late, missing or damaged product.
What is Amazon FBA?
Under FBA (Fulfilled by Amazon) third-party seller let Amazon pick, pack, and ship orders
As Amazon says “You sell it, we ship it.” Amazon has created one of the most advanced fulfillment networks in the world, and your business can benefit from their expertise. With Fulfillment by Amazon (FBA), you store your products in Amazon's fulfillment centers, and they pick, pack, ship, and provide customer service for these products. Best of all, FBA can help you scale your business and reach more customers.
How Does FBA Works?
The third-party sellers prepare their product to be sold through FBA and shipped to Amazon Fulfillment Center. (shipping charges paid by the seller)
The goods of third-party seller is maintained and stored at Amazon Fulfillment Center.
You can monitor through their tracking system, after the inventory are received by Amazon.
Customer orders your products from Amazon.
Amazon picks and packs the products which are sold.
Products are shipped to the customers by Amazon themselves.
Tracking
How to be successful with Amazon seller central with FBA of the products is provided to the customers.
Also provides customer service and return of the products.
Pros of using FBA
Cheap and discounted shipping rates
Whenever a customer