By Rieva Lesonsky
If you’ve ever ordered something from Amazon (and who hasn’t?) you know how amazing their fulfillment services are. Products always arrive on time (usually early!). If you’re a small business owner selling products on Amazon, upgrading your account to Fulfillment By Amazon (FBA) can save you time, improve your customer satisfaction and power up your sales.
How does it work? Amazon has state-of-the-art fulfillment centers all over the country. When you join the FBA program, you’ll ship your inventory to Amazon’s warehouses where they will store, sort, pick, pack and ship it for you. Thanks to Amazon’s relationships with multiple carriers, you’ll enjoy deep discounts on shipping. You don’t have to have tons of inventory in order to participate, either—in fact, there’s no minimum required.
Besides all the headaches you can eliminate by having Amazon handle your fulfillment, FBA also makes your products more desirable to customers because:
- Your products are eligible for Amazon Free Shipping and Amazon Prime Free Two-Day shipping.
- Your product listings and product pages are labeled “Fulfilled by Amazon.”
- Shoppers can feel confident when buying from you, since they know they won’t have to worry about added shipping fees or whether the product will arrive on time.
Amazon requires products in the FBA program to be packaged and labeled according to Amazon guidelines. This creates a better customer experience, since deliveries arrive professionally packaged and clearly marked from Amazon. Don’t worry, though: Amazon can package and label your products for you to save you even more time.
In addition to the time saved by having Amazon handle fulfillment, Amazon also handles your customer service for FBA products. That means your customers can get their questions answered, handle refunds or manage returns 24/7 without you having to lift a finger.
Danny Sheridan, owner of national home improvement and hardware distributor Woodside Distributors, has been an Amazon reseller since high school. FBA has benefited his business in many ways, says Sheridan, who paid his way through college thanks to his business.
“We are a team of students at the University of Michigan who sell branded products as a reseller on the Amazon Marketplace,” he explains. “As students, we don’t have the infrastructure to have an office or warehouse, so we leverage the capabilities of FBA. FBA enables us to run a business virtually, never touching the goods that we sell while delivering value to customers.”
Sheridan says FBA “allows for scalable business practices that focus our attention on lower costs and improving selection.” What he finds most beneficial is the ongoing innovation that continually improves FBA’s technology. For example, FBA provides free inventory planning tools that help users manage inventory and forecast demand. With a glance at his dashboard on his desktop or mobile app, Sheridan can quickly see days in inventory, what needs to be restocked, and even which SKUs are moving slowly—all of which helps him plan better for greater profitability.
If you’re an Amazon seller considering FBA, Sheridan advises, “Follow Amazon’s lead and test! It’s extremely low-cost to do a small-scale test [of FBA]. If it works, scale up slowly over time. If it doesn’t, document why it didn’t work, and identify a time or condition when you would revisit the FBA program.”
Learn more about Fulfillment by Amazon.