How Can you Use FBA to Expand your Business?
Operating your own business can be exhausting. There are so many hats you must wear on a daily basis and an oversight or slip up in one area can be disastrous for your venture. How do you juggle it all and still have time to sleep? Amazon has thought of a way to relieve you of that weight. Through Fulfillment by Amazon (FBA), you can spend more time on aspects of your business that need your attention, while Amazon fulfills your orders. With FBA Export, you can even expand your business globally, literally with the click of a button. Interested? Let’s take a look at why FBA might be the perfect solution for your business and how you can get started.
What is Fulfillment by Amazon?
Fulfillment by Amazon might just be your dream come true. FBA is a service Amazon offers sellers where Amazon will store your inventory, then fulfill your orders, and even handle customer service and returns. There are 75 Amazon fulfillment centers across North America so all you have to do is ship your products to the correct center and sit back while Amazon handles the rest. Of course you will need to check on your account regularly to insure you have products in stock, track orders, read reviews, and see what is selling, but the bulk of your work will be hands-off. FBA comes at a price, but can prove very beneficial if the system helps your business sell products more efficiently. Let’s look at the 6-step process of utilizing FBA.
Create an FBA account
Setting up FBA is very easy if you have a Selling on Amazon account. Go to the Fulfillment by Amazon site and click on the Get started button. If you haven’t sold on Amazon before, you will first need to make an account. When you set up your Selling on Amazon account, you will be prompted to choose to continue as an individual or professional. Individual status is for those who will sell 40 items or less during a month and the membership is free. The professional account costs $39.99 per month but your first month is free. The professional account is definitely the one you will need to grow your business.
List your products
After FBA has been added to your account you can begin listing your products. Here you have three choices. You can add your items individually, in bulk, or share your data using Amazon Marketplace Web Service (Amazon MWS). Amazon MWS is free as long as your account is eligible and you register. With Amazon MWS you can build applications which will help you manage your inventory, download customer orders, review reports and track the shipment of your products.
Prepare your products for shipment to Amazon
This will be the most hands-on part of the FBA process and the most difficult. First, you will need to make a shipping plan including details about your products, the method and details of shipment to the fulfillment center, and whether you will label your inventory yourself or have Amazon do it for you. If you choose to prep and label your products yourself, you must be sure to adhere to Amazon’s requirements. Amazon’s prep requirements are strict and specific and if you complete this step incorrectly, you will be charged a fee. Even if you opt for Amazon to prep your products, you still must follow guidelines on how to prepare your products so that they are received by the fulfillment center in tact. Preparation requirements may include such things as poly bagging, bubble wrapping, or taping your products.
Send your inventory to an Amazon fulfillment center
You will then ship your products to the appropriate Amazon fulfillment center. Amazon will provide the address of the fulfillment center and you will choose to use your own carrier or ship with an Amazon partnered carrier at a greatly discounted price. Through your account you can track the progress of your shipment.
Amazon fulfills your orders
Once your shipment arrives at the fulfillment center, the bulk of your work is done and you can sit back and wait for customers to start ordering your products. After an order is placed, Amazon will select the product from storage, pack it, and ship it to your customer. Your Amazon Prime customers will be pleased to receive their package with free Two-Day Shipping while many of your other customers will benefit from free shipping on eligible products.
Amazon handles returns and customer service for you
With FBA, Amazon handles all aspects of customer support. Questions, comments, concerns, and returns are handled by Amazon’s 24/7 customer support, taking yet another hat off your head. Amazon is a reputable name in the e-commerce business, so you can feel assured that your customers will be in the best hands in terms of professional and efficient customer service.
Going global with FBA Export program
FBA also offers you and your small business a way to reach customers around the world. Amazon automatically enrolls you in the Export program when you create your FBA account. To get started, you only have to enable the Export program in your settings. The beauty of this program is that won’t cost you a dime. The international shipping fees and customs duty is paid for by the customer. This is a great option for sellers who have products which are popular in foreign markets. You can hire a professional translation company to translate your product listings into desired languages and increase your international reach. Don’t confuse the FBA Export program with Amazon Global Selling though. Amazon Global Selling is not related to FBA Export and different fees and regulations apply.
Costs and benefits
So far, everything has sounded too good to be true, but you may be in for a reality check when you tally up the costs. Remember, multiple steps in the FBA process can cost you money. It will cost you to ship your products to the fulfillment center. If you opt to have Amazon prep your products this will be another expense as they charge per item. Then you will be charged Fulfillment fees which include picking and packing your orders, shipping and handling, and customer service. Prices range from $2.41 for a small item (10 oz or less) to $137.32 per unit for a special oversize item weighing more than 151 lb. Choosing to utilize FBA is a big decision that requires upfront capital, but benefits can prove worthwhile. Fulfillment by Amazon allows you to focus your time and energy on other aspects of your business such as product sourcing or maintaining your company social media accounts while Amazon handles some of the heavy lifting for you. The opportunity to expand your business internationally at no extra cost is a great way to ease into foreign markets without taking a great financial risk. The amount of stress and time FBA saves you might be worth every penny.