FBA: Detailed explanation and practical operation of Fulfillment by Amazon

In today's competitive e-commerce market, efficient logistics services have become the key to attracting customers and increasing sales. Amazon FBA (Fulfillment by Amazon), as a comprehensive logistics solution provided by Amazon, is winning the favor of global sellers with its efficient and convenient services. Through FBA, sellers can store their products in Amazon's warehouse, and Amazon is responsible for order picking, packing, shipping, customer service and returns management, completely freeing up sellers' energy and allowing them to focus on product development and marketing.

The unique advantage of FBA is not only to improve the efficiency of delivery, but also to help sellers reach a wider customer base, especially Prime members, who have hundreds of millions of users. This service is especially friendly to novice sellers and cross-border e-commerce, helping them quickly build trust and expand into international markets.

This article aims to comprehensively explain the working principle, core advantages and potential challenges of Amazon FBA, and provide practical operational tips to help all kinds of e-commerce sellers make full use of FBA's resources and stand out in the fierce market competition. Whether you're just starting out as an entrepreneur or a seasoned seller looking to further optimize your logistics, this article will provide you with valuable reference and guidance.

What is Amazon FBA?

FBA (Fulfillment by Amazon), or "Fulfillment by Amazon", is a comprehensive logistics solution provided by Amazon to help sellers outsource the entire process of products from warehousing to final delivery to Amazon. Sellers only need to ship the goods to Amazon's warehouse, and Amazon handles the storage, order picking, packing, shipping, customer service, and returns of the FBA items. The core advantage of FBA is its ability to provide fast shipping services (such as Amazon Prime) and efficient global logistics support for sellers.

Differences from traditional self-fulfillment (FBM).

• Logistics management: In the FBA model, Amazon is responsible for the entire logistics process, including storage, picking, packing, and fulfillment. In the FBM (Fulfillment by Merchant) model, sellers manage these processes themselves, from product storage to order fulfillment.
• Distribution efficiencyFBA's ability to leverage Amazon's strong logistics network and fast shipping services, such as Prime, to ensure fast delivery is critical to improving the customer experience for sellers. In contrast, FBM usually requires sellers to arrange their own delivery methods, and the delivery speed and service quality are easily limited.
• Customer Service and Returns: FBA also includes customer service and returns processing, Amazon handles customer issues and returns, and sellers don't need to be physically involved. FBM, on the other hand, is the seller's sole responsibility for all after-sales issues and returns.

How Amazon FBA works

The inbound process of the product

1. Merchandise preparation and labeling: Sellers first need to prepare their products according to Amazon's requirements and label each product. Amazon requires sellers to strictly follow label specifications and packaging requirements to ensure that products can be shipped smoothly.
2. Shipped to an Amazon warehouse: The seller ships the product to an Amazon-designated fulfillment center. During the shipping process, sellers can reduce shipping costs through shipping discounts provided by Amazon.
3. Merchandise warehousing and storage: Once the product arrives at Amazon's warehouse, Amazon processes the product to ensure that it is properly stored and ready for subsequent sales.

Order processing and fulfillment process

1. The customer places an order: When a customer places an order to purchase a seller's product on Amazon, Amazon's system automatically detects the inventory of the product and sends the order information to the appropriate warehouse.
2. Order picking and packing: The staff of the Amazon warehouse will automatically pick the goods according to the order information and professionally pack them. Amazon's efficient warehouse management system ensures that items are picked in the most optimized way and errors are reduced.
3. Distribution: Once the product is packaged, Amazon will select the most suitable delivery method according to the customer's location for fast delivery. For Prime members, Amazon will provide fast shipping within 2 days to enhance the customer's buying experience.

After-sales support and returns service

1. customer service: Amazon provides round-the-clock customer service when customers encounter issues, including damaged items, missent items, delivery delays, and more. Amazon's customer service team handles after-sales issues, and sellers don't need to intervene.
2. Returns processing: If a customer chooses to return a return, Amazon processes the return request in accordance with the return policy. Returned items are sent back to Amazon's warehouse, and sellers can choose whether to relist or destroy the returned items. Amazon's services for processing returns reduce operational pressure on sellers and increase customer satisfaction.

The core advantages of Amazon FBA

1. Logistics efficiency and fast delivery

One of the biggest highlights of FBA is its logistics efficiency and fast delivery service. By storing products in Amazon's fulfillment centers, sellers can benefit from Amazon's comprehensive fulfillment network, providing customers with a fast and reliable order fulfillment experience.

• How Prime members' two-day delivery service attracts customers：
  FBA-supported items are automatically marked as "Prime Eligible," which means Prime members can enjoy two-day or even next-day delivery. Fast delivery greatly increases customer purchase intent and conversion rate, especially in scenarios where goods are urgently needed. According to statistics, the purchase frequency of Prime members is significantly higher than that of ordinary buyers, and the support of Prime delivery has a direct effect on sales growth.

2. Global market coverage

FBA also provides sellers with a convenient channel to enter the international market, and through Amazon's global logistics network, it is easy to achieve cross-border delivery.

• Strategies for easily expanding to overseas markets with FBA：

Through FBA's global fulfillment service, sellers are able to quickly reach international consumers, thereby increasing brand awareness and market share.

3. Customer Service & Returns Management

FBA not only excels in logistics, but also provides excellent customer service and return support to sellers.

• How Amazon assists sellers with customer issues：
  Amazon's customer service team is online around the clock to provide customers with efficient order support for issues such as delivery delays, damaged items, and more. This means that sellers can fully focus on growing their business without having to spend a lot of time dealing with customer complaints.
• Ease of returns management：
  FBA handles all return requests, including receiving returned items, checking item condition, and updating inventory status. The simplification of the returns process not only reduces the operational pressure on sellers, but also improves customer satisfaction and increases repurchase rates.

4. Warehouse management and inventory optimization

With FBA, sellers can reduce the cost and management complexity of their own warehousing.

• Reduce the operational pressure on logistics for sellers：
  Amazon provides large-scale, high-efficiency warehousing services, sellers no longer need to rent and manage warehouses by themselves, and at the same time avoid inventory problems caused by fluctuations in sales.
• Tools & Support for Inventory Optimization：
  Amazon offers a variety of inventory management tools, such as inventory health reports and replenishment recommendations, to help sellers optimize inventory levels and reduce the risk of stockouts or slowdowns. In addition, sellers can avoid long-term storage fees by regularly adjusting their inventory strategies.

How do I set up FBA?

1. Go to Manage FBA Inventory

Log in to the Seller Panel and click "Manage FBA Inventory" in the "INVENTORY" tab to enter the inventory management interface:

2. "Convert to 'FBA' Shipping"

Find the product you want to convert to FBA, if you only want to convert FBA to a single product, put "√" in the "Status" box on the far left, and click "Change to Fulfilled by Amazon" in the "Edit" on the far right:

3. After selecting the FBA products to be shipped, you will jump to the following page and click "Convert Only" to confirm the conversion of FBA shipments:

4. Seller information checking

After jumping to the following interface, you need to check some information:

Place of origin: The ship-from address will be automatically generated, if you need to change it, click "Ship from another address". Fields with an "*" are required. As shown below:

Packaging Type:It is divided into mixed shipment and original packaging shipment.

Mix:That is, there are multiple SKUs (Stock Keeping Units) in one box.

Shipped in original packaging: There is only one SKU in a box.

After determining the shipping place and packaging type, click "Continue to process the warehousing plan", and after selection, the original gray interface on the lower half of the page will be displayed normally.

5. Dimensions of the product package

The product packaging dimensions need to be entered, which is the manufacturer's original product packaging dimensions (inches). For example, if a product on Amazon is a cup and the cup is packaged, you need to enter the packaging size (length, width, height) and quantity of the product, and then click "Save".

Click Save, and then click "Continue" below to continue with the next step of "Prepare your products".

6. Prepare the goods

In this step, you will also browse the information set by the seller before, and after confirming that there is no problem, click "Continue" to proceed to the next step.

7. Label the product

Every product that is sent to the FBA warehouse must be labeled. Here you can choose to set the number of labels to be printed and select the size to be printed.

Under normal circumstances, Amazon uses "A4" format paper for printing by default, and sellers can purchase A4 format self-adhesive paper for printing. Under normal circumstances, the number of labels printed on each A4 paper is 21~44. Sellers can choose the corresponding specifications according to the size of the product package to print. After the selection is complete, click "Print this page label" to print the label. After printing, the labels are applied to the product or the outer packaging of the product one by one. Then click "Continue" to proceed to the next step.

Below are screenshots of label prints for some SKUs. In order for FBA to be scanned and stored smoothly, sellers who sell on Amazon need to attach each label to the product or product packaging. Be careful not to mislabel the SKU.

8. Check the shipment

At this stage, check the origin of the shipment, the type of packaging, the included products, the product preparation fee, and other information. Amazon will prompt you: "Your inventory to Amazon may be split into multiple shipments based on the seller's SKU, and we will assign a fulfillment center to each shipment based on a variety of factors, including the size and category of the product, your address, and other factors." It means that the products created by sellers who sell on Amazon may be divided and assigned to different FBA warehouses, or they may all be sent to one FBA warehouse, in short, they are automatically allocated by the Amazon system. If the seller does not want to split the warehouse, you can set up the warehouse merge in the background in advance. (There is an additional fee for merging positions). After confirming that the information is correct, the seller can also see the "destination", which is the address of the FBA warehouse.

If that's okay, go ahead and click on "Process Shipment". Once you've confirmed that it's okay, click "Confirm Shipment".

9. Prepare the shipment

1. Check the items in your shipment

Amazon has a tip on this page: Sellers should ensure that the SKU and quantity of the physical goods shipped are exactly the same as those filled in when they were created. That is, the seller should check the variety and quantity of SKU to ensure that the wrong product will not be selected and sent.

2. Select a shipping service

The shipping method is generally filled in by default: "small parcel express"

Carrier: "DHL EXPRESS(SUA)INC" is entered by default

"Prepare Shipment" and "Select Shipping Service" are as follows:

3. Set the box information

Here is the number of setting boxes. In a batch of shipments created by the seller, if the quantity is relatively large and multiple outer boxes need to be used for delivery, fill in the number of boxes truthfully in the "Total number of boxes".

If you're shipping multiple boxes together, select Multiple boxes;

For a single box shipment, change "Multiple boxes" to "All items in one box".

A little mention of the number of boxes here, by box, I mean the number of boxes at the time of shipment. If your product is special and needs to be packed in multiple small boxes, and then these small boxes are put into large boxes, then the number of boxes here refers to the number of all large boxes, not the number of small boxes.

How do sellers selling on Amazon provide box content information? There are three options here: use a web form, upload a file, skip the box information, and charge for manual processing.

Using a web form: Fill in the box information in the web form (recommended). As follows:

Upload documents: Fill out the packing slip and upload it to Seller Central.

Skip box information and charge for manual processing: Amazon will manually process the contents of your box. It calculates the manual processing fee based on the total number of units in the box * cost per unit.

The size and weight of the box are optional, which means that the seller can leave it blank. If you want to fill in, you can directly enter the weight and size of the box. If there is 1 box, you need to fill in the weight and size of 1 box; If the total number of boxes is 2, fill in the weight and dimensions of the 2 boxes truthfully. Once you have filled it out, you will see the "Total" number of boxes. As shown below:

4. Print the shipping label

Here is also a reminder that self-adhesive is used to print outer box labels. Affixed to the outer carton, each box label is unique, and all box labels must be printed.

The following is a PDF screenshot of some FBA outer box labels.

10. Enter the logistics tracking number

The last step is to enter the tracking number, all the above steps are completed, after the packing is completed, the goods will be handed over to the freight company and sent to the FBA warehouse. The seller can enter the shipping order number in the "list".

Under normal circumstances, the actual weight of the box should not exceed 30KG, and the longest side in terms of volume should not exceed 150cm. If you are overweight, you need to put an "overweight tag" on the outside of each outer box.

How much does FBA logistics and fulfillment cost?

Fulfillment fees for each item include order picking and packing, shipping and handling, customer service, and product returns. The cost depends on the weight and dimensions of the item. The shipping weight is calculated based on the unit's unit weight or dimensional weight.

Here it is:Non-apparelFees

Here it is:ApparelThe logistics and distribution charges are as follows:

FBA logistics warehousing fee

Inventory storage fees are charged monthly based on the average daily volume (measured in cubic feet) of space that your inventory occupies in Amazon fulfillment centers. The volume is based on the dimensions of the product that has been properly packaged and ready to ship.

FBA New Seller Package

The FBA New Seller Package offers a range of rewards and offers for newly registered professional sellers designed to help them launch and scale their Amazon business more smoothly. Here are the main contents of the package:

1. Up to $50,000 in rewards: When a brand is registered in Amazon Brand Registry, sellers can receive a 10% rebate on their first $50,000 brand sale. When a brand reaches $1,000,000 in sales within the first year, a 5% rebate will be applied to the remainder.
2. Vine: New sellers will receive a $200 Vine credit to help products get high-quality user reviews.
3. Discounted shipping costs: Get a $100 shipping discount when you send shipments to FBA using the Amazon Partnered Carrier program. When you use Amazon Global Logistics, you get a $200 delivery fee credit.
4. Free storage and return service: After joining the Amazon FBA new product warehousing discount program, new sellers can enjoy free storage and customer return services.
5. Multi-Channel Fulfillment (MCF) Discounts: New sellers receive a 10% discount on fulfillment fees on the first 100 items shipped with MCF.
6. Advertising Offer: Sellers will receive: $50 in advertising costs to create ads for products or brands. A $50 coupon fee to create an Amazon coupon.

These offers and incentives support new sellers in a variety of ways, helping them reduce costs, increase exposure, and increase sales. More detailed content can be found at:https://sell.amazon.com/grow#nsi

FAQ

1. What is Amazon FBA?

Amazon FBA (Fulfillment by Amazon) is a logistics service provided by Amazon for sellers. Sellers send products to Amazon's warehouse, and Amazon takes care of inventory management, order processing, fulfillment, and customer service. With FBA, sellers can focus on product sales and business expansion, while leaving the tedious logistics and customer service to Amazon.

2. What are the advantages of FBA?

• Logistical efficiency: FBA provides fast delivery service, and Prime members can enjoy two-day delivery, which improves customer satisfaction.
• Global market coverage: FBA gives sellers easy access to Amazon's global marketplace to ship globally through Amazon's logistics network.
• customer service: Amazon provides round-the-clock customer service, including handling returns, refunds, and more, so that sellers don't have to do the work themselves.
• Inventory management: FBA automatically manages inventory, and sellers can easily check the inventory situation to avoid out-of-stock or expired products.

3. How do I get started with FBA?

• Sign up for a seller accountFirst, you'll need to sign up for a seller account on Amazon.
• Choose the FBA service: In your account settings, select Use FBA for order fulfillment.
• Prepare the item and send it to the Amazon warehouse: Prepare product labels as required by Amazon and ship products to the designated Amazon warehouse.

4. What are the fees for FBA?

FBA fees mainly include:Storage feesandFulfillment fees。 Storage fees are calculated based on how much warehouse space the item occupies and how long it is stored, while fulfillment fees include the cost of order processing, packaging, and shipping. Fees vary depending on product size, weight, and season of sale. Amazon charges sellers different fees based on these factors

5. How does FBA help cross-border e-commerce sellers?

FBA provides a convenient way for cross-border e-commerce sellers to ship goods from one country to multiple international marketplaces through Amazon's global fulfillment network. Sellers only need to send the product to Amazon's local warehouse, and Amazon will take care of the delivery and customer support

6. How to optimize FBA inventory management?

To optimize inventory management, sellers can:

• Regularly check your inventory health reports to ensure you have the right amount of inventory and avoid stockouts or overstocks.
• Use Amazon'sInventory is automatically replenishedfunction to reduce human error.
• Avoid long-term storage fees and clear your inventory with timely clearances and promotions on Amazon.

7. What is the difference between FBA and FBM (Fulfillment by Merchant)?

FBA is handled by Amazon for logistics and customer service, while FBM is for the seller to be responsible for shipping and handling after-sales service. Sellers who use FBA can enjoy Amazon's logistics and customer service benefits, but they need to pay a certain fee. FBM sellers, on the other hand, control all the logistics, but also take responsibility for delivery and customer service.

8. What is the return policy for Amazon FBA?

Amazon FBA provides a return service, if the seller's goods are returned, Amazon will be responsible for handling the return process and returning the goods to the seller or destroying them in accordance with the regulations. Sellers need to manage according to Amazon's return policy to ensure compliance

9. How does FBA affect my Amazon sales?

Using FBA can improve the performance of products in search rankings, especially for Prime members to see FBA products first. In addition, FBA can improve delivery speed and customer satisfaction, which in turn can lead to sales growth.

10. How can I ensure that FBA works successfully?

Key factors to ensure the success of FBA include:

• Manage inventory properly and avoid stockouts and expirations.
• Plan promotions in advance, such as coupons and lightning deals, to increase your exposure.
• Monitor and optimize expenses to ensure optimal profit margins.