Amazon FBA in 2020: How It Works

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Amazon FBA or Fulfilment by Amazon, is one of the best services provided by Amazon, where the company picks, packs, ships, and offers customer care services for any seller’s products. The products are generally stored in an Amazon warehouse, and the seller has no role to play in the transportation or maintenance of inventory. Amazon FBA fees range from 45 cents to $1.35 per unit, and $39.99 per month for a Professional account.

How Does Amazon FBA Work?

Amazon FBA is a feature available for sellers who want to tie-up with Amazon in order to project, advertise, and sell their products through Amazon’s medium. Sellers can sign up for the FBA feature, and they will start receiving certain features and services. At first, the seller sells the product, which is then shipped by Amazon.

They also store items from the seller in their fulfillment stores or warehouses for easy dispatching and shipping. The inventory received by Amazon can be tracked by the seller to keep a check on their goods. On any order, Amazon directly sends the money to the seller and simultaneously ships the product to the customer.

Benefits of Amazon FBA

Amazon FBA is used by millions of sellers worldwide due to a variety of benefits, simplicities, and services they provide to the sellers.

  1. Focus and Trust: When you don’t have to worry about the shifting or packaging of products, you can focus on your business and save a lot of time. Amazon offers world-class packaging, shipping, customer services, and returns. Thus, customers trust prime products, and this results in more sales.
  2. Amazon Prime: An average customer spends $700 per year on Amazon, whereas Amazon Prime customers spend $1,300. With fast delivery options and quality guaranteed products, the sales are bound to be high.
  3. COD Features: Cash on delivery (cod) or pay on delivery is a feature that most customers prefer. With this feature, the money is deposited once the customer pays.
  4. Logistics: For a start-up seller, it can be not easy to maintain the proper logistics of your products. However, Amazon excels in e-commerce and has experts running the logistics.
  5. Other Channels: Amazon has tie-ups with other e-commerce websites, and therefore your product will receive international reach and advertisement. Amazon’s Multi-Channel Fulfilment (MCF) comes exceptionally handy for sellers from all over the world.


Disadvantages of Amazon FBA

With so many benefits, there are certain disadvantages of the Amazon FBA services for the sellers.

  1. Cost and Storage Fees: Amazon FBA costs a lot, especially for entrepreneurs who are trying to establish a business. The products are stored, sorted, and transported via Amazon assets, and thus, those fees are charged from the sellers as well.
  2. Returns: Customers often take advantage of easy return facilities, and that can result into too many returns of sold goods.
  3. Difficulty in Tracking: It is very difficult to keep track of goods once they enter the massive warehouses and storage destinations.

Final Thoughts!

Although Amazon FBA is a bit costly in 2020, the company assures the best service along with affiliate benefits for FBA sellers. Amazon offers easy registration, fast shipping options, simplified listing, nationwide reach for your products, millions of customers, world-class facilities and services, and high-end e-commerce services.

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