Amazon FBA: What Is FBA, and How Does It Work?

In the golden days of the internet, when it was young and there wasn’t much competition, you could list almost anything for sale online and make a bunch of money.

Money was easy to make just a decade or two ago. But today, with more than half of the planet using the internet daily, and millions of businesses trying to sell their products online, it’s a little different.

Luckily, platforms like FBA on Amazon help business owners compete.

What is FBA? It’s Amazon’s program of making it super easy to sell and ship products to Amazon’s millions of daily customers. If you want to automate your business and sell more products without having to do as much marketing, then this Amazon service should be your main selling channel.

Keep reading to learn all about using FBA for selling products and growing your business.

Amazon’s Progression

Amazon has come a long way in the past 20 years. Depending on which metrics you look at, Amazon is between the third and tenth biggest companies in the world today.

But in 1994, Jeff Bezos launched a new company called Cadabra out of his garage in Washington State. He soon changed the name to Amazon, named after the largest river in the world, as he envisioned building the largest bookstore in the world.

After building a brand quickly, and selling tons of books in the first couple of years, Amazon went public at $18 per share in 1997, still selling just books.

Amazon handled its first few years acting as a broker. It did not purchase and ship its own products. It listed products online. Once sold, the company owning the product shipped it to the customer.

After many major developments in the early 2000s, Amazon launched the FBA program. This led Amazon down the path of becoming one of the largest infrastructure and logistics networks in the US.

Not only would Amazon compete with stores like Wal-Mart and Barnes and Noble, but it would compete with companies like UPS, FedEx, and the USPS.

Today, the FBA program continues to set Amazon apart from any would-be competitors, helping businesses by leveraging the infrastructure that Amazon has built.

To find more information about importance of branding, you should try ZonTracker for Amazon sales

What Is FBA?

FBA stands for “Fulfilled by Amazon.” Amazon was once a broker. But now it has many warehouses around the US where vendors can send their products.

Once a product sells, Amazon team members (and robots) package orders and ship them out on Amazon delivery vehicles. This allows Amazon Prime members to receive their package either on the same day they order it or within 2 days.

If an Amazon vehicle can’t deliver a particular package to an area, they send it via UPS or USPS with 2-day shipping.

According to the FBA website, there are 185 Amazon distribution centers across the globe, with 110 in the US, mainly around larger metropolitan areas.

With FBA, Amazon also handles all of the customer services, including dealing with defects, returns, exchanges, and so forth. While most businesses will use FBA as an additional commerce channel, there are many businesses that use FBA exclusively to sell their products online.

So rather than having to spend time and money shipping products and handling customer requests, they can spend all of their time developing new products.

Benefits of FBA

There are so many benefits of FBA, for Amazon, for individual companies selling on Amazon, and for customers.

Even though Amazon has spent billions of dollars building the infrastructure to handle FBA, it makes far more sales than ever before as a result. Plus, the cost to ship each order drops significantly than having to pay a separate courier.

For businesses who sell on FBA, the benefits are increased sales, hands-off shipping, and customer service handled by Amazon. All the company needs to do is create a product listing and ship a pallet of products to the FBA warehouse. Amazon handles the rest.

Products sold with FBA are promoted on Amazon, and thus get far more sales than products that don’t use FBA. So even though you pay for the luxury of using FBA, you will earn more sales.

For customers, FBA allows them to get their order within two days. This builds trust and loyalty, meaning they will be back to buy more and more.

Getting Started With FBA

Want to get in on the action and grow your business with the largest e-commerce platform and shipping network in the country (and in many other countries)? Then it’s time to get set up with FBA.

First off, you just need to set up a seller account with Amazon. You’ll need to include bank information, credit card information (for your monthly seller fee), ID, and business information.

Once you’re a seller, you can then elect to sign up for the FBA program. With that in order, you just need to create product listings for any products you wish to list and sell on the platform.

There is a specific format that will help your products get found. Good copywriting will sell more of your products. By working with an Amazon product listings expert, you can guarantee your product listing will be better than the competition.

With product listings in place, you’ll need to send your products to Amazon. This is a very specific process, and the Amazon platform will guide you to ensure you do it properly.

It involves having individual products labeled with Amazon stickers, to make storage and fulfillment a breeze. If products are in your custody, you can do this yourself. Alternatively, you can have your supplier or manufacturer do this, and they can ship it directly to Amazon to save on shipping costs.

Once your products are in, you will hopefully start seeing some sales. There are many things you can do to increase sales on Amazon, from encouraging customer reviews to running ads and much more.

Build Your Business With Amazon

So what is FBA? It’s one of the best business tips you’ve ever heard. To automate the process of selling products and fulfilling orders is a huge plus, especially to small businesses that don’t have their own shipping infrastructure in place.

FBA is always worth a try. If you decide it’s not for you, you can always cancel and handle things yourself in the future.

Looking for more business tips and tricks? Visit our blog now to find other helpful articles.