There are three ways in which 3rd party Sellers on Amazon can ship their products to their customers. These shipping options are Seller Fulfilled Prime (SFP), Fulfilment by Merchant (FBM) & Fulfilment by Amazon (FBA). FBA is the only option which Sellers do not ship their products directly to the customer. A product can be seen to be sold via FBA by the ‘Fulfilled by Amazon’ statement found underneath the Buy Now button.
Instead of sending products directly from their warehouse to the customer, Fulfilled by Amazon Sellers ship them to Amazon’s fulfilment centres who then handle both shipping and returns to customers for the Seller. In short, FBA Sellers use Amazon’s shipping & fulfilment services to send their products to consumers to guarantee fast & efficient delivery. Unlike an Amazon Vendor account, where brands use Amazon as a wholesaler, FBA Sellers are still responsible for the prices of their products.
What products are ideal for Amazon’s FBA service?
- Small, light products that don’t require lots of room to store. Eg. books, CDs & small toys
- Fast selling products. Eg. Office supplies, small electronics & seasonal products
- In short, low cost but high return items do best via Fulfilment By Amazon
What are the benefits of FBA?
Fulfilment by Amazon merchants get automatic access to Amazon Prime customers. Prime members on average tend to spend more on Amazon than other consumers. 3rd party Sellers may want to consider FBA as an option to gain the Prime badge and entice this Amazon-specific demographic. The Amazon Prime badge also gives FBA Sellers an advantage in winning the buy-box; the area on a product’s detail page that allows the shopper to add items to the shopping cart. If multiple sellers offer the same product, Amazon tends to favour sellers with Prime eligibility amongst other factors such as stock, price and reviews.
A sense of trust
Consumers are much more likely to trust a brand that uses Amazon’s shipping option. When a customer sees that a product is fulfilled by Amazon, they can rest in the knowledge that the product will be shipped as promptly as possible. Moreover, they are reassured that the product will be as described and safely delivered within Amazon’s A to Z Guarantee.
Sellers that are certain that their stock will sell fast will be able to ascertain that their Amazon inventory won’t run out too quickly by sending products in bulk to Amazon to be safely stored and sent to buyers when needed. This will mean they will be able to worry less about shipping & distribution and more on increasing sales of the actual products. Also, Amazon does not cap how much inventory you would like to place inside their fulfilment centres meaning there is no cap on how many sales you make if Amazon has the stock in their warehouses.
Ease of global shipping
Amazon has built a multitude of fulfilment centres internationally meaning it is much easier to sell your products globally on any of Amazon’s established marketplaces. Selling in the EU5, for example, is much simpler with FBA as there are tailored programmes that Sellers can choose from depending on how and where they want to sell. Sellers who use FBA in any of the European marketplaces can also use the same Seller account to expand into selling on another of Amazon’s European sites. Amazon will also provide local language customer support making global shipping a much simpler experience as translation will be required less.
Use of FBA services for other channels
Amazons Multi-Channel Fulfilment (MCF) service allows Sellers to fulfil their product orders offsite using Amazon’s Fulfilment Centres as a shipping service. Amazon will store your inventory in their fulfilment centres, and when items sell on your own site, or on another ecommerce marketplace, Amazon will pick, pack, and ship them to your customer. Ultimately, this means you can integrate your business entirely with Amazon so you can remain on top of all your sales in one place.
Is Amazon FBA the right option for you?
We at Molzi understand that FBA requires a lot of work and are more than happy to use our expertise to make sure that FBA is the right shipping option for your brand. If FBA seems too full-on, we can manage it for you. We have over 270 years of combined commercial and management experience in strategy, e-commerce, digital content and advertising so you can feel safe in the knowledge that we know how to optimise your sales!