Selling on Amazon FBA

Selling on Amazon FBA service is launched to streamline processes that would benefit both Amazon sellers and customers.

Updated: June 1, 2024

Selling on Amazon FBA


Selling on Amazon FBA:

Selling on Amazon FBA service is launched to streamline processes that would benefit both Amazon sellers and customers.
Fulfillment and customer service challenges can be alleviated while providing access to a comprehensive fulfillment network by successful feature. 
Amazon's existing fulfillment model can be integrated into third-party seller processes to benefit from this infrastructure and ultimately benefit Amazon customers.
Not only the sellers would gain a lot, but also their customers would receive faster, more reliable shipping and service from this marketplace giant by introducing this service.
Amazon FBA can be used to improve operations that will help you increase sales and enhance brand awareness as you sell on Amazon. 

 
Why Amazon FBA:

An 'all-you-can-eat express shipping' program, which is also known as Amazon Prime was launched by Amazon in February 2005 to attract more customers and drive more sales. 
Amazon knows that it would hurt their bottom line if they continue to shoulder shipping and logistics costs as more online shoppers join the Prime bandwagon. Hence, they introduce Amazon FBA in 2006. 

Working of Amazon FBA:


Your deliveries will be taken care by the eCommerce shipping and logistics with a price when you sell any product.
Inventory are send by seller to Amazon's fulfillment centers.
The inventory will be received, sorted, and stored by Amazon once it arrives at the fulfillment center.
Amazon picks, packs, and ships the order to the customer when the customer orders the seller's product from the marketplace.
Customer service will be handled by Amazon.
Amazon will also take care of the return process if the customer wants to return the product.
Although you can also use this service from courier companies or third-party logistics providers, perks like customer service and item return features will not be provided.

Benefits of Amazon FBA Program:


Top-notch logistics and warehousing facilities are provided by Amazon in FBA program.
You will have access to the high-end fulfillment centers, truck trailers, air freight, bicycle couriers, merchant vessels, and air drones of Amazon once you join FBA.
Amazon has one of the most advanced fulfillment networks in the world, containing tens of thousands of full-time associates that work alongside robots.
You can not only the facilities and workforce but also the years of experience and expertise Amazon possesses, which is known worldwide.

Fast and free shipping is provided by Amazon in FBA program.
Online shoppers love free and quick shipping which is realized by Amazon.
That is why express shipping is one of the features they included in the program when they launched Prime.
Prime subscribers can also enjoy Prime Now 2-Hour Delivery, One-Day Shipping, and Two-Day Shipping besides same-day delivery.
This is made possible by Amazon as they have strategically put up fulfillment centers worldwide and employed tens of thousands of FBA staff, especially during holidays and sales. 

Prime-eligibility is guaranteed in FBA program.
Amazon Prime subscribers don't mind spending a little more to get premium shipping and other perks exclusive for Prime members only as they rely heavily on the fast, free delivery service offered in the marketplace.
You better join Amazon FBA if you want to sell your products to this group of generous people to get instant passes and become instantly qualified for Prime shipping. 

You will have a chance to win the buy box in FBA program.
The Buy Box is the most coveted space on the product detail page, where customers can quickly add items to their shopping carts.  
Every seller wants the Buy Box as it help convert into sales.
You can win the Buy Box if you're Prime eligible because priority is given to them by Amazon.

You can get the best deals on shipping rates.
An agreement is made with major carriers such as UPS, USPS, FedEx, and DHL Express, and they are called Amazon partnered carriers who often grant Amazon deeply discounted shipping rates. 
You don't need to negotiate if you're an FBA seller.
You just need to save on shipping fees because Amazon does it for you.
Your cargo is also taken care of by reputable courier firms.

Effortless scalability is provided in FBA program.
You don't have to generate or think of a business plan to scale your business quickly as Amazon has several programs under FBA that you can simply 'add-on' to your current business strategy. These include:
You can offer discounts on qualified FBA products to repeat customers in FBA Subscribe & Save.
Small, lightweight, and cheap FBA inventory can get lower fulfillment fees in FBA Small & Light.
You can cross borders and sell your products to more than 100 countries at no additional cost in FBA Export.
Amazon distribute and sell your products across European marketplaces at no extra charge with faster shipping time in FBA Pan-EU.
You are allowed to offer your products to third-party eCommerce sites or your site in Multi-Channel Fulfillment . Additionally, they will pick, pack, and ship to your customers.

Amazon FBA Fees:


You need to pay some price to get the benefits mentioned above.
Although, Amazon doesn't charge anything when they ship the order to customers, the following Amazon FBA fees need to be considered to manage your expenditures wisely.

Seller account subscription fee:

Individual plan and Professional plan are two types of seller plans you can choose from.
Individual plan costs CAD $1.49 per item with no monthly subscription fee which is recommended for sellers who are only planning to sell fewer than 20 items per month.
Professional plan cost CAD $29.99 per month and is perfect for sellers who are planning to sell more than 20 items per month. Other perks, such as creating bulk listings through APIs, selling in restricted categories, advanced reporting features, promoting your products through Amazon advertising tools, and more are there in this plan.
You will have access to Amazon FBA with both the plans.

Referral fees:

Amazon gets a commission for each item sold in their marketplace which could be a flat fee, 15 percent, or less.
Referral fees are paid after the sale happens.
The greater of the applicable referral fee percentage or applicable per-item minimum referral fee will be deducted by Amazon which is different for different items.

FBA fees:

Amazon FBA fees consist of four different fees, including the storage, packing, and handling of your inventory which is rolled into one.
The category, weight, as well as size of the item are also taken in to consideration in the computation. 

Storage fees:

Monthly storage fee and Long-term storage fee are two types of storage fees that you need to deal with.
For any space your inventory takes up in the fulfillment centers of Amazon before the sale will be charged by Amazon.
Amazon will charge you a fee of CAD $150 per cubic meter if your inventory stays at fulfillment centers for more than 365 days.

Removal order fees:

Long-term storage fee can be avoided by requesting a removal order.

Returns processing fees:

A free returns for customers is offered by Amazon that will be charged to the seller which is equivalent to the total fulfillment fee for a given product.

Additional FBA fees:

Additional FBA fees may be incurred when your inventory has no proper labeling or preparation.
A per-item fee will be charged for FBA label service, FBA prep service, manual processing service, and FBA repackaging service.

FBA New Selection Program:

Free monthly storage, free returns processing, and free removals on eligible new-to-FBA ASINs is offered in FBA New Selection Program.
A $100 discount on Amazon-partnered carrier shipping can also be given to the participants as well. 
You can get some added new benefits like oversize item eligibility, sponsored advertising, ASIN limit in this program.
Free storage up to 90 days and free removals up to 180 days is provided on eligible oversize items up to 30 units per parent ASIN.
Promotional credits for sponsored ads is provided as well.
An unlimited amount of eligible is provided for new-to-FBA parent ASINs. Thus, removing the 500-ASIN limit.

How to Become an Amazon FBA Seller:


Select a niche:

You have to be very careful when choosing a niche as FBA has different requirements and restrictions than non-FBA products.   
Return or disposal of your inventory upon its arrival at the fulfillment center can result if you fail to comply.
Amazon can block your future shipments, charge for noncompliance or preparation and possibly deactivate your selling account if you fail to comply.
This can be prevented by avoiding the following niche or categories:
Products that have not been prepared according to FBA packaging and prep requirements, but require preparation.
Products that are otherwise determined unsuitable by Amazon.
Products that does not comply with any agreement between Amazon and the seller.
Products that are illegally reproduced, replicated or manufactured.
Perishable or expired products as well as damaged or defective units.
Products with labels that do not match the registered product or that were not correctly registered with Amazon before shipment.
Products with price tags, marketing paraphernalia, or other non-Amazon stickers.
Items requiring AC, freezing, or refrigeration.
Meltable, heat-sensitive inventory during warmer months, loose packaged batteries, gift cards, gift certificates, and other stored-value instruments, alcoholic beverages including non-alcoholic beer and vehicle tires.
Products with unauthorized marketing materials, such as price tags, pamphlets, or other non-Amazon stickers.

Find products to sell:

You need to search for a product to sell within your chosen niche.
Below mentioned are some tips on how to find the right one:
Small, lightweight products that only need minimum handling and shipping costs should be chosen as the size and weight is also included in the calculation of Amazon.
Source generic products as you can rebrand them easily.
Save yourself from complicated paperwork and time-consuming process by choosing the product that doesn't need Amazon's approval before selling it.
Choose a product that you can sell all year-round, and isn't just seasonal.
You can own the rights to sell it exclusively under your brand if the product does not have a trademark or patent yet.
The product should be of a high-demand, marketable, and low competition.
Any hassles in terms of packaging with product research and also you will have confidence in the product you have chosen to sell. 

Look for a supplier or manufacturer:

You should be careful in choosing your supplier as they can make or break your Amazon FBA business.
The right supplier must have the following characteristics:
They can manufacture a product in a consistent manner and are willing to communicate with you when needed.
The supplier should be an ethical and socially-compliant company and abide by the rules and regulations of Amazon and local authorities.
Third-party inspection should be there to ensure the quality of the product.
The supplier or manufacturer should provide sample products for every reproduction to check it for quality assurance.
You can find a supplier by subscribing and reading industry trade publications; visiting trade shows; mingling with business owners in an industry association; registering in online wholesale directories; joining Facebook groups targeting suppliers of your chosen niche and visiting online B2B wholesale websites.

Establish your brand:

You need two brand name, one is for your seller name, and another is for your product brand name. 
Your seller name should be a unique and memorable company name.
A product brand name should be assigned for each item you are offering. 
A brand logo and design should be created for your company and products.

Sign up for an FBA seller account:

You must have Tax information, Government ID, Active credit card, Business email address, Business phone number and Bank account number before you hit the 'Start Selling' button on Amazon Canada's page.

Create product listings:

You must ensure that the product title is descriptive enough for online shoppers to understand as product listings or product detail pages are the place where you display your products in the marketplace. 

You need to prepare your products for packaging, ship your inventory and finally launch your product.
Before launch your product you need to optimize product detail page, create a buzz, set up PPC campaigns and gather organic reviews.

Amazon FBA Mistakes You Must Avoid:


You should not always dependent on FBA alone.
You must enroll in Amazon Brand Registry and have your products trademarked to protect your brand and reputation.
You should check your stock levels on a weekly or bi-weekly basis regularly and replenish right away to keep selling and earning. 
You should properly understanding Amazon's policies to stick to the rules to avoid getting banned from the largest online marketplace on Earth.