The Benefits of Amazon FBA
Fulfillment by Amazon is an Amazon seller service that provides packaging, storage, and shipping assistance to sellers. It’s intended to streamline ecommerce operations for businesses and enable them to offer fast, free shipping. Amazon has set a new precedent – people now expect to be able to track their orders, receive their online purchases super-fast, and not have to pay extra shipping costs. Because of this, businesses selling online need to be able to compete. The following are some of the benefits of using Amazon’s FBA services:
- Sellers pay less to ship their goods to Amazon warehouses
- Streamlined, efficient shipping process
- FBA saves time, money, and manpower for small businesses
- Sellers can offer their customers free, trackable shipping
- Your products will be prime eligible, which introduces them to an extremely wide audience
Now that you’ve decided you want to use FBA, consult the following guidelines for shipping your products to an Amazon warehouse.
Amazon has more than 75 fulfillment centers across the US. Considering the ever-growing popularity of the company, that number is likely to continue to increase. In order to work with Amazon, there are specific guidelines sellers need to comply with. That way, they can ensure an efficient shipping process for all the businesses they work with.
Creating a Shipment Plan
The first thing you’ll need to do is develop a shipping plan. The goal of your shipping plan is to identify the following:
- The specific products you’re sending to Amazon
- Quantities of the products
- Shipping carrier and method
- Whether you or Amazon will be handling product preparation and labeling
You’ll create this plan in Amazon Seller Central. You’ll be prompted to classify each product through a category search bar that will help you narrow it down.
Once you’ve classified your product, you’ll enter “vital info” about it. This includes:
- Product ID
Then, you’ll set your price and save your product. Usually, it’ll be listed the same day. You can edit, add, and remove products under the “Inventory” dropdown list.
When you go to edit your product listing, you can add important details like product weight, shipping weight, descriptions, and images. These elements are important for making a well-developed listing that buyers can trust.
After you add in all of your product details, you’ll need to set up your shipment plan.
Click on the “Send/replenish inventory” option, which will prompt you to specify how your products are going to be packed, as well as the number of units you’re sending to Amazon’s warehouse. You can choose either to have your merchant (supplier) prep your goods, or you can choose to have Amazon do it.
Shipping Your Products
It’s best and less-costly to have your third-party logistics company handle shipping your products, as you can incur fees if you don’t prepare everything correctly. A third-party shipping partner can make sure your products get to the warehouse quickly and safely, and will closely manage your inventory levels. They’ll handle all of the packing, labeling, and actual shipping, which can be a major hassle since Amazon has a lot of rules and requirements. Otherwise, you can handle this yourself, but make sure you follow all of Amazon’s guidelines, which vary based on what you’re shipping. Consult their shipment preparation checklist, which includes:
- Measuring tape
- Printed copies of Prep Matrix and Shipping Matrix
- Amazon barcodes
- Packing slip paper
- Poly bags
- Opaque bags
- Bubble wrap
- Sold as Set & “Ready to Ship” labels
Obviously, it’s a pretty complicated process, and a lot of small businesses just don’t have the time and energy to devote to this process. However, the option is available to you should you choose to do it yourself. Keep in mind that Amazon’s procedures are very strict, and you’ll need to complete all of the packaging and labeling steps perfectly. Otherwise, they reserve the right to return or even discard your products.
Labeling is a key part of the preparation process. You’ll need to choose one of the following options:
- Use a UPC or EAN barcode for eligible products
- Add an Amazon barcode to each individual item
- Pay a per-item FBA label service fee and have Amazon apply the barcodes for you
In Seller Central, you’ll be able to see which items need to be labeled under the “Labeling Required” tab.
The last part of your freight-planning process should consist of last-mile delivery, which is basically getting your goods to the warehouse. You can choose either to ship “less-than-truckload” (LTL) or “small parcel delivery” (SPD).
Again, your third-party shipping company will have all of the know-how regarding your specific products. In general, if you’re shipping more than two pallets, things can get tricky. You’ll need to adhere to pallet label requirements, use acceptable pallets, provide a bill of landing (BOL), and schedule the delivery. If you’re shipping fewer than two pallets, you can choose SPD, which can be coordinated on Amazon’s Seller Central.
Things to Keep in Mind
It’s important to be aware of Amazon’s fees, which change based on internal pricing considerations and seasonal factors. They also charge for long-term storage for any stock stored longer than 180 days. If your product isn’t selling, Amazon will charge you for the space. Amazon’s warehouses only have a finite amount of space. Given the enormous number of companies trying to sell on Amazon, they’re able to price that space very highly.
Amazon’s inventory placement service (ISP) allows you to send all of your goods to one fulfillment center. This makes it so you can avoid the hassle of shipping to multiple destinations. However, it reduces your choices when it comes to which FBA center you ship to. You could end up having to ship your products somewhere that’s totally geographically inconvenient based on your location, which can be extremely costly. Plus, you’re charged per unit when you use this service.
Shipping your own goods to Amazon’s warehouse is costly and time-consuming, but certainly possible. It requires strict adherence to a long list of rules and a lot of measuring, labeling, and packaging. Third-party fulfillment and shipping services remove a lot of the burden that goes along with FBA. They make it so business owners don’t have to worry about this process and can rest assured their products will arrive at the warehouse quickly and safely.
If you have any questions about shipping using a Amazon FBA, contact Sologistx for a free quote!