Why is Amazon FBA perfect for Producers?

Amazon FBA, which stands for Fulfillment by Amazon, has become one of the most popular ways to earn income online. It is very simple, yet powerful process which allows you, as an online seller, to utilize Amazon’s numerous fulfillment centers to store and ship the products you sell through the Amazon website as a platform. This solution which can help your online business grow without the need for you to invest thousands of pounds in storage facilities and staff.

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The way FBA works is very simple, yet effective:

1

You Send your products to Amazon FBA

First you need to send your products to Amazon’s fulfillment centers.

2

When there, your products are inventoried and safely stored.

When there, your products are inventoried and safely stored.

3

Customer purchase your products

When a customer places an order for your product, Amazon handles the transaction for you, the entire process being automated.

4

Amazon FBA picks and packs your products

Next, your product is picked from its place in the storage, safely packed into a box, and shipped to the customer on your behalf.

5

Amazon FBA ships products to your customers

After your product arrives to the customer, Amazon Customer Support follows up with the customer to make sure everything is okay with the order and handles returns and refunds as well.

Like many online marketplaces, all this does come at a price. Amazon charges both storage fees and fulfillment fees, this covering logistics and 24/7 customer support as well. The fee for their services usually comes after a sale has been made.

Another thing that’s amazing about this business model is that there are a couple of ways to sell on Amazon FBA. The most preferred one is Private Label, meaning you research and manufacture your own branded products to sell on Amazon FBA where you control every aspect of the product. The benefits of Private Label include less work sourcing, control over the prices and much higher profits.

Product Research

Research high-demand/low-competition products with the use of the Chrome Extension Helium.

Product Sourcing

Source the products that caught your eye through Alibaba, which is a website that puts you in touch with thousands of manufacturers.

Product Listing

Create a brand new title and listing on Amazon. It’s a really simple step which you can do in less than 40 minutes.

Product Shipping

Ship your products to Amazon.

Product Launch

Launch and advertise your products using Amazon’s own advertising system.

The benefits of using Fulfillment by Amazon are many. Some include:

  • Effortless logistics and shipping
    Managing these is usually very time-consuming and costly, so just imagine never having to touch a product, dispatch an order or deal with a return ever again! This is how Amazon FBA works.
  • Customer Service management
    Amazon provides 24/7 excellent Customer support via phone, chat and email. They also handle returns and refunds.
  • Potentially unlimited storage space
    All your products are safely stored in Amazon’s warehouses.
  • Amazon Prime
    With Amazon Prime Subscription you can offer the customers quick and free delivery!
  • Reputation You can use Amazon’s reputation to benefit your business.
    Amazon’s got a solid name and buyers trust it. When you back up your line with Amazon, you increase your chances of landing a sale.

Whilst there are a lot of benefits to Amazon FBA, there are also a couple of disadvantages that shouldn’t be overlooked:

  • One such thing are of course the FBA fees, that could eat up your profit margin if you sell large, heavy and/or inexpensive items, or ones that don’t sell fast enough.
  • When sending to Amazon, you have to follow very specific and strict guidelines of sending your stuff, like labelling products individually for example.

For many businesses, these few disadvantages will outweigh the benefits of Amazon FBA and of course, your success will also depend on other factors, many of which are down to you, the effort you put in and the knowledge you have in order to utilize Amazon FBA in the best way possible.

In conclusion all you need to do is the following:

Choose the products you are going to sell

Amazon handles the storing and order fulfillment, but you’ll still need to research and source what products to sell. You can sell just about anything you’d like, but if you want to avoid storage fees, make sure you choose products that will sell quickly.

Ensure your inventory is in stock

While Amazon lets you know when your stock levels are low, you still need to check your inventory levels regularly and make sure you replenish stocks when necessary.

Create your own product listings and market your products effectively

Amazon is a great platform but you’ll still need to write product listings and market your products effectively so that people can actually find them and want to buy them. Good advertising is vital if you want to make sales.

Amazon’s FBA program allows almost any business, no matter how big or small, to get their products in front of millions of customers and take advantage of the largest fulfillment network in the world. It also allows you to leverage their first-class customer service and storage and shipping capabilities. Plus, buyers are more likely to trust your products when they’re backed by Amazon’s reputation, so it’s a pretty great way to get more sales and increase your brand’s recognition.

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