What is FBA (Fulfillment by Amazon)?
- FBA (Fulfillment by Amazon) is an all-in-one solution to sell your products to Amazon customers. When you use FBA (Fulfillment by Amazon), all you need to do is send your products to Amazon Fulfillment Centers. The rest is on Amazon. They store your products, and when a customer places an order, they take care of packing, shipping, and delivering the product to the customer’s exact location.
- The FBA (Fulfillment by Amazon) also gives your products the Prime Badge and offers same-day or next-day delivery for eligible customers.
- Amazon also handles returns and customer support queries for you.
How does FBA (Fulfillment by Amazon) work?
Step 1: Register as a Seller and list your products
- Register as an Amazon Seller and login to Seller Central to set up your account. Update your business details and add your product listings on Amazon.in.
Step 2: Join FBA & send your products to an Amazon Fulfillment Center
- Once you have listed your products, you can sign up for FBA (Fulfillment by Amazon) where you will have to share additional details, add your chosen Amazon Fulfillment Centers (FC) as Additional Place of Business (APOB).
- You can then ship your products to the Amazon FCs.
Step 3: Get orders for your Prime products
- Your FBA products will have the Prime Badge. You will also have a better shot at winning the Buy Box which increases your chance to receive more orders quickly.
- Once an order is placed, Amazon will pack your products immediately and get them ready for delivery.
Step 4: Amazon delivers your products to customers
- Through their world-class fulfillment network delivering to 99% of India’s pin codes, Amazon will deliver your products to the customer quickly and reliably along with tracking of shipment.
Benefits of Fulfillment By Amazon (FBA):
1. You can use Amazon’s reputation to benefit your business:
- People from all over the world trust Amazon. When they order a product, they know they will receive it.
- They also know they can return it if they need to. This plays a huge part in whether or not they should purchase from you.
2. You gain the ability to provide a super-fast service:
- Amazon’s unique online ordering system includes faster processing and dispatch. For this reason, they can ship products to your customers faster than you may be able to.
3. You can achieve a higher ranking on Amazon and better visibility:
- When you use the FBA programme, your product will appear higher in the search results.
- Products from sellers not using FBA (Fulfillment by Amazon) have items listed by total price (price of the product plus shipping costs). However, as an FBA seller, you will have your items listed by price only, thus making it one of the first items in the search results.
4. You have a better chance of securing the Buy Box:
- The Amazon Buy Box is the big ‘Add to Cart’ button displayed on all product listings on Amazon. As a seller, if both you and Amazon are selling a similar product, they will always have the Buy Box, of course, they will! But, by using Amazon FBA you can still compete.
- FBA (Fulfillment by Amazon) is one of the variables Amazon likes to see within your shipping methods, so this makes it highly likely that you will win the buy box on your other product listings.
5. Amazon Prime Badge:
- Display the Prime Badge on eligible products and give your customer options for free unlimited one- or two-day delivery.
- Premium delivery options increase customer demand and loyalty.
6. Your overheads are significantly reduced:
- Thanks to FBA ! You don’t need to be concerned with storage, employees and administration, and you’ll be able to focus on selling more products and boosting your profits.
7. You will benefit from increased productivity:
- One of the biggest benefits of FBA is your increased productivity.
- With Amazon dealing with your customer service, returns, storage, packing and dispatch of your products, your time can be spent building your business.
8. You can run your business anywhere:
- As an Amazon FBA seller, you can be anywhere in the world and still be generating consistent business. Amazon will handle all your orders 24/7.
- You won’t deal with customer queries as often.
- Amazon FBA will deal with all your customer service needs. For example, if a buyer has an issue with their order, they can contact the customer service department at Amazon, rather than needing to deal with it. This saves your valuable time and there is no need to speak with customers directly.
How FBA Works?
- Amazon FBA requires you to use your regular Amazon selling account as usual and then follow some simple instructions to add your products to your FBA section. With just a few clicks, you will be able to expand your business in an entirely cost-effective manner, with the direct help of Amazon.
What Amazon Does?
- You send your products to one of Amazon’s warehouses — don’t worry, they will tell you which warehouse to send your products to.
- Amazon stores your products safely in their warehouse.
- Customers purchase your products and Amazon deals with the whole transaction from payment to updating your inventory.
- Amazon packs and ships your product to your customer.
- Amazon handles the majority of your customer service tasks including dealing with any returns or refunds.
- Every two weeks, Amazon deposits your sales profit directly to your bank account.
What You Do?
- Choose your products: Amazon deals with the back end so to speak, but you’ll still need to research and source what to sell.
- Ensure your inventory is always up to date: Amazon lets you know when your stock levels are low, but you must make sure to refill stocks when necessary.
- Create your product listings and market your products effectively: Amazon is huge, but you’ll still need to write effective product listings and titles and market your products so that people can actually find them.
How does Amazon FBA work?
1. Transport your products to the Amazon warehouse:
- The first step to use Amazon FBA is to classify products correctly as the incredible amounts of inventory Amazon warehouse receives every day.
- The categories of products you’re sending to Amazon.
- The quantities of each product.
- Your shipping method and carrier.
- Either of you or Amazon will do the product preparation and labeling.
- Next is to confirm your ship-from address. The location is where your shipment will be picked up.
2. Amazon sorts and stores your products:
- Once Amazon receives your products, they will arrange your products appropriately and add them to your inventory. Different kinds of products will be sorted into different logistics centers to make it easier for Amazon to find the products when they are shipped.
- Your products normally will be stored safely in Amazon warehouses, and you can check your inventory in real-time based on Amazon’s integrated tracking system so that you can choose to add or remove inventory.
- In case anything in the warehouse is damaged, Amazon will reimburse you.
3. Amazon processes customer orders:
- Once a customer ordered one product, Amazon will automatically accept the order and payment for you, then the order will be sent to Amazon’s FBA warehouse. Your inventory will be updated automatically too.
- So the entire transaction will be done by the buyer and Amazon, you don’t need to pay too much time in the fulfillment process.
4. Amazon ships your product:
- Amazon’s warehouse workers will pick your products from inventory and pack them for delivery according to orders. Normally, Amazon can quickly locate your products by using an advanced web-to-warehouse, high-speed picking, and sorting system.
- Then Amazon packs the product into a box and ships it to the customer by the required method.
- Amazon can also provide tracking information for customers.
5. Amazon handles customer service:
- When customers receive your product, Amazon will follow up to make sure they are satisfied with the delivery.
- Customers can choose to return the product if they don’t meet expectations, and Amazon will handle the return for you.
- Note that some of the products by the return of freight costs usually need to be carried by the seller. The returned product will go back to Amazon’s warehouse, and depending on the situation you can either repackage it and sell it again or remove it from the warehouse.
6. You get paid:
- If your customer confirms the receipt, congratulations! This means the completion of an Amazon FBA order.
- Every two weeks, Amazon will aggregate all your sales and deposit the profits directly into your bank account after deducting your sellers’ fees.
- So if Amazon FBA is so easy for every seller to make money, why wouldn’t anyone choose it? By comparing the advantages and disadvantages of Amazon FBA, you can see what is suitable to use.
Benefits of FBA (Fulfillment by Amazon):
1. Amazon’s Special Buy Box.
- Every Amazon seller wants that special Buy Box on the Amazon product detail page. That being said, there have been instances when sellers got the Buy Box instantly after using the Fulfillment by Amazon (FBA) service. It allows customers to add items for buying to their cart.
- But this special buy box is not for all — usually, only the businesses with outstanding seller metrics are able to get it.
2. Amazon Prime Badge.
- Since Amazon itself fulfills your delivery while using the FBA selling account, you get Amazon’s promise of fast and feasible delivery.
- Amazon provides an Amazon Prime Badge to all your Prime-eligible FBA products.
- It also provides multiple benefits, including unlimited one-day shipping and exclusive access to lightning deals.
3. FBA customer support.
- When you are an Amazon FBA seller, you get a lot of help and support options, personalized to meet your selling needs.
- Starting from registration guide to seller central support and Seller University that provides you self-learning material, FBA has got everything covered for you.
- You can even hire a professional support team to sell for you.
4. FBA Returns.
- Customers are allowed to request a refund of an order fulfilled by the FBA. When that happens, the sellers will be notified by Amazon via email and funds.
- Amazon will then inspect the products that are sent back to a fulfillment center to see if the product is sellable or unsellable.
- If the returned product is supposedly unsellable because of defects, Amazon will decide who is accountable for the damage before reimbursing the customer or the seller.
Downside of FBA :
- FBA fees: You will be paying for storage and fulfillment fees (including long term storage fees). You will also be required to pay for removal fees in case of defective items.
- Product prep isn’t easy: It is a challenge for newbies to follow the strict guidelines on how to prepare and ship your items to Amazon.
- Tracking inventory can get complicated: It is difficult to always check what products are available, what products need to be ordered, and what’s not selling. It is especially tricky if you are selling on several channels.
Is Amazon FBA worth it in 2021?
- FBA (Fulfillment by Amazon) is most definitely worth it this year for serious sellers. While there certainly are other ways to generate online and side income, if you start your Amazon FBA business and scale it the right way, it might just be the fastest way to a 6 or 7-figure online income.
Try FBA for Free
- You can try FBA (Fulfillment by Amazon) for the first 3 months or the first 100 units and get free transportation, storage and packing, and anytime removals. Amazon is also offering a limited time waiver on Pick and Pack Fees, Storage fees, Inbound charges, and Removal charges so that you can Try FBA at no additional cost.
What are the fees being waved off in this offer?
- If you are new to FBA (Fulfillment by Amazon), Amazon will waive off FBA specific fees for the first 100 units or first 3 months. During this period, you don’t have to pay Storage Fees, Pick and Pack fees, and Removal fees.
- Amazon will pick up your shipment from your location — Free
- Amazon will store & pack your products in Fulfillment Center — Free
- You can remove your stock anytime — Free
Benefits for first 3 months Try FBA (Fulfillment by Amazon) for free
- Free Amazon Inbound Transportation to Amazon fulfillment center
- Amazon picks up your shipment from your location and delivers it to Amazon fulfillment center for Free.
- You decide the number of units to be sent to any of the Amazon fulfillment centers.
- You can send multiple shipments.
- Free Storage
- Amazon stores your products in fulfillment centers for free.
- Free Packing
- When a customer places an order, Amazon picks and packs your product for free.
- Free Removals
- You can remove your products and Amazon will deliver it to your location for free.
Conditions and validity for the Try FBA offer:
- The offer is valid only for all sellers trying FBA (Fulfillment by Amazon) for the first time who never sent any shipment to the fulfillment center till date. Your 3 months trial period starts on the date we receive your first shipment in Amazon Fulfillment Center (FC).
- You can avail the fee waivers only for the first 100 units or for 3 months (whichever is earlier) from the date your first shipment is sent to the FC.
- The first shipment has to be a minimum of 10 units.
- You need to schedule an appointment using Amazon inbound Pick-up Service (ATS) to avail Inbound charge waiver. You can have multiple free inbound shipments over 3 months of trial period (till you reach 100 units).
- At any time (within the offer period) if you wish to remove your products from the Amazon FC, the removal fee will also be waved off as a part of this offer.
- Inbound charges, storage, pick & pack and removal fees are the FBA specific fees/charges being waved off as a part of this offer. Referral fees, Closing Fee, Weight handling fees and any additional charges like seeking 3rd party services for getting warehouse address added in GST (APOB) will continue to be charged as per usual.
FBA Fees & Pricing
FBA Pick and Pack, Storage and Weight Handling fees:
|FBA Fulfilment FeesFBA Pick and Pack fees, INR per unit|
|STEP – Level||Size Band||Local||Regional||National||IXD|
|All levels||Size band – Standard||10|
|Sizeband – Heavy and Bulky||50|
|FBA Storage fees, INR per Cubic Foot/Month|
|STEP – Level||Size Band||Local||Regional||National||IXD|
|All levels||All Sizebands||20|
|FBA Weight handling fee, INR Per shipment(based on outbound shipping weight)|
|STEP – Level||Size Band – Standard||Local||Regional||National||IXD|
|Premium||First 500 g||22||36.5||58||40.5|
|All levels||Each additional 500g upto 1 kg||16||21||26||22|
|Each additional kg after 1 kg||13||18||24||18|
|Each additional kg after 5 kg||10||11||15||12|
|STEP – Level||Size Band – Heavy and Bulky||Local||Regional||National||IXD|
|Premium||First 12 kg||160||249.5||NA||NA|
|All levels||Each additional kg after 12 kg||4||5||NA||NA|
FBA Closing Fees:
|Item Price including Shipping Charges (INR)||All Categories||Select Categories*|
* Select categories list:
- Media: Books**, Software products
- Consumables: Pet Products, Beauty products, Beauty- Fragrance, Luxury Beauty, Health and Personal Care (HPC), HPC – Medical Equipment & Contact Lens, HPC – Nutrition, HPC – Household Supplies, Personal Care and Ayurveda, Grocery and Gourmet
- Softlines: Apparel, Apparel – Sarees and Dress Materials, Apparel – Men’s T-shirts (except Polos, Tank tops and full sleeve tops), Apparel Accessories, Apparel – Innerwear, Apparel – Sleepwear, Eyewear
- Other Hardline: Wall Art, Home Fragrance and Candles, Home furnishing, , Carpets, Bedsheets, Blankets and covers, Home improvement accessories, Home improvement (excl. accessories), Ladders, Home security systems, Kitchen and Bath fixtures, Home Storage, Home – Other Subcategories, Home – Waste & Recycling, Craft Materials, Lawn & Garden- Solar devices, Lawn & Garden- Chemical pest control, Lawn & Garden- Outdoor Equipments, Lawn & Garden- Other subcategories, Lawn and Garden – Plants, Seeds & Bulbs, Indoor Lighting – Wall, ceiling fixture lights, lamp bases, lamp shades and Smart Lighting, LED Bulbs and Battens, Indoor Lighting – Others, Clocks, Automotive – Other Subcategories, Automotive – Tyres and Rims, Automotive – Lubricants, Car Parts and Helmets, Vehicle Care and Tools, Automotive Accessories, Automotive Vehicle, Lab Supplies & Fasteners , Power Tools, Measuring instruments, Tapes and Adhesives , BISS (Food equipment, Material Handling, Professional Medical, Health and Cleaning supplies), Masks, Gloves, Personal Protective Equipment & Medical Apparel
- CE/PC/Wireless: Landline Phones, Power Banks, Accessories – Electronics, PC and Wireless, Cases/Cover/Skin/Screen guard, Cables – Electronics, PC, Wireless, Car Cradles, Lens Kits and Tablet Cases,
- Warranty Services, Office Products, Office Electronics Products
- For Books category, closing fee will be INR 12 for item price between INR 0 and INR 250
FBA Removal Order Fees
Fees when you want to remove your goods away from the fulfillment centers and order your location. Sometimes goods are automatically removed from the fulfillment centers.
|Item Type||Self-Pickup (per unit)||Standard Shipping (per unit)||Expedited Shipping (per unit)||Disposal Fees (per unit)|
|Standard-size||INR 10||INR 10||INR 30||INR 0|
|Heavy and Bulky||INR 100||INR 100||NA||INR 0|
FBA long term storage fees
Long Term Storage Fee (LTSF) is charged every month for all the sellable inventory units that have been stored in Amazon Fulfillment Centers (FC) for more than 180 days (6 months).
|Affected inventory||Long-Term Storage Fee (per cubic foot)||Long Term storage fee (per unit)|
|Units in fulfillment centers between six to 12 months||INR 425||INR 15|
|Units in fulfilment centres for longer than 12 months (applicable to all categories)||INR 850||INR 30|
FBA Label Service fee:
|Classification||Description||First instance (Charge per unit on the first shipment)||Subsequent occurrences (Charge per unit on all following shipments)|
|Planned Labelling||Who Labels is set to ‘Amazon’||INR 1.5||INR 1.5|
|Unplanned Labelling||Who labels is set to ‘Merchant’||INR 1.5||INR 3.0|
FBA Pickup fees and charges:
|Shipment Zone||Shipping Rates % (approx.) – INR/kg*|
|0-99 kg||100-499 kg||500+ kg|
FBA Unplanned service fees:
|Problem group||Problem||Problem rate||Unit||Coaching-level and corresponding unplanned service-fee|
|Per-unit charge||Per-unit charge||Per-unit charge|
|Label Missing – Product Related||Amazon barcode missing||Unit-level||Units||INR 1.50||INR 3.00||INR 3.00|
|Other label problems – Product related||Label required||INR 1.50||INR 3.00||INR 3.00|
|Unplanned prep – Bagging||Poly bagging required||INR 3.50||INR 7.00||INR 7.00|
|Opaque poly bagging required||INR 3.00||INR 6.00||INR 6.00|
|Unplanned prep – Bubble wrap||Bubble Wrap Required||INR 5.00||INR 10.00||INR 10.00|
|Unplanned prep – Product related||Taping required||INR 1.50||INR 3.00||INR 3.00|
FBA Prep Service Fees:
|FBA Prep Activity Fees|
|Planned Fees||Unplanned Fees (Irrespective of Size)|
|Prep Activity (Per Unit Fee)||Small/ Standard||Oversize Heavy Bulky||First Infraction*||Non- Compliance**|
|Poly-Bagging||INR 3.50||INR 7.00||INR 3.50||INR 7.00|
|Bubble Wrap||INR 5.00||INR 10.00||INR 5.00||INR 10.00|
|Bagging (Opaque/Black)||INR 3.00||INR 6.00||INR 3.00||INR 6.00|
|Taping||INR 1.50||INR 3.00||INR 1.50||INR 3.00|
|Labelling||INR 1.50||INR 1.50||INR 1.50||INR 3.00|
|*First Infraction : First Instance of Unplanned Seller-ASIN combination|
|** Non-Compliance : Second and subsequent instances of Unplanned Seller-ASIN combination|
|Note: All oversize items weighing more than 30 Kg are classified as Oversize Heavy and Bulky|