Amazon FBA? What is behind this abbreviation?
If this is the first time you’ve heard of Amazon FBA, don’t worry. You are at the right place! We are going to walk through the basics of how to sell on Amazon.
Amazon FBA literally stands for Fulfillment by Amazon. This is the equivalent of Shipment by Amazon.
The big advantage of this program is that Amazon does the hard work for you.
Here is how it works in 5 steps:
- First, you send your products to Amazon and they store them in one or more of their warehouses. These warehouses are like huge buildings run by robots and hard-working Amazon employees.
- Then, your products are inventoried and sorted. They take good care of them. And if by any chance something is damaged in one of Amazon’s warehouses, Amazon will refund you the full sale price of the damaged product!
- When a customer places an order on Amazon for your product, Amazon handles the order for you. The whole process is automated.
- Then your product is taken straight from its place on the shelves, packaged in a box, and shipped to the customer on your behalf.
- After your product arrives at the customer, Amazon follows up with the customer to make sure everything is in order with the order. Amazon also provides the 1st level of Customer Service.
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Amazon FBA to better focus on “Business”
Now you ask yourself: If Amazon does all the work, what is left to do in the end?
As an Amazon FBA seller, you will need to do:
- Choose the products. Amazon takes care of all the “back end”, but you decide what you want to sell. The choice of product is crucial to ensure your success in selling on Amazon.
- Keep inventory in stock. Amazon will notify you when inventory is depleted. But it’s your job to make sure that what you sell stays in stock. Be careful, Amazon does not like you to be out of stock and this could have a negative impact on your sales, so be careful to stay vigilant on the state of your stocks.
- Promote your products and advertise. Amazon has a massive catalog that spans day by day and also a search engine of millions of products. Therefore, you will have to work your Amazon SEO to make sure people find your products. But don’t worry, it’s pretty easy to beat the competition if you apply the right techniques!
- Manage the maintenance of your product sheets: Once your Amazon business is in place, you will have to encourage your buyers to leave you customer comments/reviews, ensure the management of product comments to maintain a good overall rating on each of your products, and respond to customers who left positive/negative feedback.
As you can see, thanks to the Amazon FBA program, you will be able to save considerable time to devote yourself to the core business of your company: the development of new products and marketing!
Why sell on Amazon?
Amazon is the world’s leading e-commerce site. It is one of the most diverse marketplaces where it sells almost everything.
Amazon has a gigantic database of customers who only buy from Amazon. Selling on Amazon allows you to benefit from great visibility with customers who have the credit card in their hands and are ready to buy!
Why do customers trust Amazon so much? Because the customer is at the center of Amazon’s strategy. The quality of customer service is recognized and impeccable. “You have not received your package? No problem! We are resending you to another”. In addition, the delivery is fast and it is a very important criterion of choice for the buyers.
As a seller, you can take advantage of Amazon’s unbeatable logistics at a very competitive cost and much cheaper than if you had to send the packages on your own. There are many companies that offer international shipment at affordable prices like MyXBorder, who specialize in delivery from amazon India to the uae. Amazon FBA allows you to offer one-day delivery for customers who have subscribed to Amazon Prime. Having your products in Prime will boost your visibility and every day hundreds of loyal Amazon customers will see your product. This will dramatically increase your conversion.
Finally, the site has optimized ergonomics for conversion and for adding additional products to the basket.
Selling on Amazon is clearly an opportunity for any e-merchant. You will be able to work on your business and your strategy to generate more purchases. Thanks to their low storage cost, you will save money.
What are the advantages of Amazon FBA?
- No obligation to have a website to promote your products.
- Take advantage of Amazon logistics to facilitate your shipments and benefit from fast delivery at competitive prices.
- Take advantage of the Multi-Channel offer allowing you to sell your Amazon stock on other sites.
- Take advantage of Amazon’s highly regarded customer service to respond to buyers’ queries 24/7.
- FBA badge: Huge business advantage over other sellers.
- Take advantage of Amazon’s visibility to spend less on advertising.
- Easy access to the buy box: when there are several sellers for the same product, the offer that wins the buy box is displayed first.
What are the disadvantages of Amazon FBA?
- This service comes at a cost: Remember to calculate your margins and take into account all costs!
- Long Term Storage Fees (LSF) can be outrageous: If you choose a good product (think about looking at the best tools) and you haven’t overpriced too much stock, you won’t have this problem!
Why choose Amazon FBA as an e-merchant?
Amazon has the most advanced and efficient logistics system in the world. As an e-merchant, you will be able to focus on your business and save incredible time.
You will have to focus on 3 main activities:
- Finding the right products: This is a key step in your success during which you will need to identify and source products in high demand. Once the product is found, you will need to source them from suppliers and request multiple quotes in order to get the best rates. To source your products, I recommend Alibaba but you can source your products from many other sites. Then you should import the products either to your home if you want to check them out or directly to Amazon warehouses.
- Maintain your stock: To ensure the sustainability of your activity, you will need to ensure that you maintain a sufficient level of stock of your products. The Amazon algorithm doesn’t like stockouts and it negatively impacts your rankings.
- Promote your products: You can improve the promotion of your products in different ways. First of all, you can optimize the product page by highlighting beautiful images and working on the title, bullet points, title, or even the description of your product. You must then generate traffic on your product page thanks to Amazon PPC paid to advertise or even via different traffic sources: Facebook advertising, niche sites based on affiliation, YouTube videos, and social networks, …
Once these tasks are done, you have little or nothing to do. Amazon employees will take care of your product management, shipping, returns, and customer service.
In summary, the Amazon FBA program is an opportunity for any e-merchant who wants to save time and focus on the essentials. You relieve yourself of the stress of preparing orders, shipping them, and responding to the many requests from customers on a daily basis.
