What is Amazon FBA ? Why Fulfillment by Amazon very important

Maximize your profits with Amazon FBA – the ultimate solution for online sellers.

Amazon Logistics is a very important service of Amazon. It can efficiently, quickly and easily help cross-border e-commerce sellers, large and small, with logistics management in local markets. It can also effectively improve the ranking of sellers’ products in Amazon searches, and the services provided by FBA Not limited to products sold on Amazon, sellers can also use FBA’s logistics services on their own e-commerce websites (such as Shopify).

From Amazon’s introduction, we know that Amazon FBA is the most critical part of Amazon’s e-commerce logistics services.

It is worth mentioning that since Amazon FBA fees are adjusted every year, if you follow Amazon, you must be familiar with Amazon logistics. Even US President Trump once made a fuss about Amazon logistics, saying that the US Post Office will Amazon is losing money on logistics.

You may have also heard that Amazon uses drones to deliver goods and Amazon Key delivers goods in the back compartment.

Since Amazon logistics is so powerful, as a seller, you must know what Amazon FBA is and why it is so important to Amazon sellers!

What is FBA?

Simply put, FBA is a service provided by Amazon, including warehousing management, packaging and shipping to after-sales services, allowing sellers to only focus on sales! The simplest concept is to think of it as your express delivery service in the United States – Fulfillment by Amazon.

When the goods arrive in the United States from sea, air, etc., and enter Amazon’s designated warehouse, Amazon FBA will handle all local packaging, warehousing management, shipping, and returns for you.

Who can use Amazon FBA?

Professional Seller on Amazon!

Pay $39.99 monthly to open a store on Amazon in the United States/Japan/Europe, run your product page (store), and sell to the world！

What advantages can FBA bring to sellers?

1. Attract highly loyal users Prime Member Amazon paid membership

Using Amazon FBA’s logistics services, you will have the opportunity to have your products recommended by Amazon Choice and Best Choice by Amazon Prime members.

The average annual spending of Amazon Prime members is twice that of ordinary members, and nearly half of households in the United States have Amazon Prime members, and Prime members can enjoy the discount of goods arriving within 2 days.

The Amazon Prime payment plan is mainly divided into two options: monthly payment of US$14.99 and annual payment of US$139. Members can enjoy two-day or same-day fast delivery with free shipping, as well as online film and television programs, streaming music, cloud photo storage, and e-books. and many other services. Video content is $8.99 per month. There is also a half-price discount program for students.

In his annual shareholder letter published in April 2018, Bezos officially stated that the number of global members of the paid service Amazon Prime has exceeded 100 million. Statistics from Explording show that in 2023, there will be 167 million Prime members worldwide.

2. Use Amazon FBA’s logistics services to make your products more attractive to buy.

If you select selected products, you can enjoy free delivery within 2 days, and you can even get same-day delivery service and many other logistics discounts for purchases over $35. For consumers, it can get the goods faster after placing an order, which also increases the chance of choosing your products instead of other competitors’ products.

3. Improve customer satisfaction and trust.

Amazon provides packaging, shipping, customer service, returns and other services in local languages, so when your products use FBA, consumers will trust your products more, and it will also be displayed on your product page that you use Amazon FBA services, so Improve consumer trust and satisfaction.

4. Share the delivery business with other e-commerce platforms, other platforms can also use it, and deliver worldwide.

If you use Amazon FBA, you can also use FBA services on the official shopping website built by Shopify. In this way, you can not only save the inventory management of additional warehouses, but also allow sales to occur directly on the Shopify official website when your website has enough traffic, saving commission fees for transactions on the Amazon platform.

In addition, when you activate the FBA Global Service, you can also use FBA’s warehousing to help you deliver goods to all parts of the world. Amazon will help consumers calculate the additional logistics costs from the background. You only need to pay the original logistics and warehousing costs, and you can sell your products all over the world through Amazon’s logistics services.

In September 2018, Amazon also launched FBA services for Japanese sites. This means that as long as the seller creates an Amazon product page through Amazon Japan and purchases goods to Amazon FBA, the seller can use Amazon’s logistics to help the seller deliver the goods to all over the world.

5. Improve product visibility.

If you are not the only seller of the product, using FBA will give you a higher chance of grabbing the Buy Box!

To put it simply, the difference between Amazon and other e-commerce store platforms is that when consumers are also selling iPhone charging cables, and they are from the same manufacturer and do not have brand certification, Amazon will based on the seller’s past Sales performance, product selling price and other mechanisms determine which seller will sell the goods to the consumers who order.

In addition to being competitively priced, the best way to get the Buy Box is to use Amazon FBA, have good seller reviews, and have customer service satisfaction.

6. Gift wrapping service, fast delivery, orders can be combined.

Using FBA, consumers can use Amazon’s customized packaging and information to be included in the product and sent to the designated recipient. FBA products are generally delivered within 3 to 5 days; if FBA services are not used, consumers usually need to wait 7 to 21 days; in addition, using FBA also allows consumers to combine orders to save shipping costs.

How are FBA fees calculated?

Since FBA is so good, will it be expensive?

Fees for using FBA include:

(1) Logistics and distribution costs
(2) Storage fees

In the past, both fees were adjusted in the fourth quarter of each year. However, starting from 2018.02.22, Amazon will adjust logistics fees to the same charging method for the entire year (unit: US dollars).

In June 2021, Amazon canceled the calculation of packaging weight and calculated logistics fees based on product weight. The charging standards are mainly based on the product type, size classification and weight; and the storage fee in peak season: 10.15 – 01.15 will be higher.

How to calculate the product weight fee please refer here

You can also use the Amazon FBA Revenue Calculator.

In fact, as long as you search for products similar to yours on the Fulfillment by Amazon Revenue Calculator tool page, and fill in your own selling price and cost, you can quickly calculate the cost and profit comparison of using Amazon FBA logistics one-stop service or self-delivery.

Example:

For example, you want to sell power banks, so you find a similar product page on Amazon.

After searching for the product, you can press “Ctrl+F” to search for “ASIN”, or scroll down the page directly to Product details/Product information to find the ASIN of the product.

Copy the value of the ASIN (B0722NZK26) in the Fulfillment by Amazon Revenue Calculator, and fill in your own selling price and cost, you can quickly calculate the cost and profit comparison of using Amazon FBA logistics one-stop service or self-delivery (see the example below) .

When the product exceeds US$35, Amazon FBA will provide free shipping (Free Shipping) service to local customers in the United States, or consumers choose to use FBA products and purchase them individually. When the product exceeds US$35, there is no additional shipping fee; In addition, FBA logistics costs are based on the expenses after the goods have entered the Amazon warehouse, and do not include the logistics costs of shipping from your factory to the Amazon warehouse in the previous period.

So in this calculation form, you need to fill in in addition to the manufacturing cost and estimated selling price, you also need to estimate the logistics costs you need to pay when the customer chooses ocean shipping, as well as the logistics costs when using your own warehousing to ship to the United States. . In this way, you can more accurately calculate how much profit you will make if the product is shipped by yourself or shipped from Amazon FBA.

Of course, as mentioned before, using Amazon FBA in the early stage may bring more sales growth.

Judging from the above FBA fees, if you want to sell your goods to Amazon in the United States and use Amazon FBA, then there are definitely very profitable opportunities for goods that are light in weight, small in size, and high in value!

Of course, the premise is that there is a large enough market demand, or that you create a large demand for your goods in the market.

And it doesn’t matter if your product is not light in weight or small in size. You can still go to Amazon to look for similar products to get a preliminary understanding of whether your product has the potential to compete.

If you want to enter Amazon and sell products to the global market, or if you want to do cross-border e-commerce and need to purchase goods from China, you are welcome to find xcjd to solve your doubts! XCJD Freight Forwarder will provide more competitive product suggestions and provide logistics services from China to Amazon warehouses. You just need to focus on running the business well and leave the rest to XCJD Freight Forwarder.