Fulfillment by Amazon was launched in 2006 and has quickly reimagined the way small businesses and third-party sellers operate. The Fulfillment by Amazon (FBA) program enables resellers to ship and store items through Amazon’s own warehouse fulfillment centers. You get to make your sales without worrying about storage or shipping operations — Amazon will handle that for you! Of course, using this program comes with its own fees. You’ll want to make sure you’re still able to make a profit between FBA costs and what you’re selling products for. Buying great inventory for a good price is a part of that equation.
In this blog, we will go over:
- Benefits of the Fulfillment by Amazon (FBA) program
- How to register for FBA
- Managing FBA orders
- FBA services
- Product restrictions
- Storage limits
- What it’s going to cost
By the end of this blog, we encourage you to test out FBA for your reselling business and start sourcing inventory that you can sell conveniently and confidently!
Benefits of Amazon FBA
The main benefit is that your small or large resale business can take advantage of Amazon’s global fulfillment network. So whether your customers are in the US or the UK, or anywhere else for that matter, you have a reliable way to get your product into their hands thanks to FBA.
Amazon FBA is good for resellers for a few reasons:
- You don’t have to worry about storage space
- Shipping & returns are handled by Amazon
- They provide all customer service on items
- Easy to get started
FBA is an effective way to grow your business. If you’re not busy worrying about fluctuating shipping costs and other fulfillment logistics, you have time to focus on other important things! Such as sourcing inventory and delighting your customers.
How do you register for Amazon FBA?
Now that we’ve answered how Amazon FBA works, and the benefits it can bring to your business, here’s how to register:
- You must create an Amazon selling account
- Add whatever products you’re trying to sell to the Amazon catalog
- Spend some time on creating a product listing
- Specify FBA inventory
- Prep your items for transport (there are packing guidelines provided by Amazon)
- Ship your products to Amazon fulfillment centers
From there, Amazon will receive and process your products while they become available for potential customers!
Managing FBA Orders
Wondering how to manage FBA orders? Well, fulfillment by Amazon is a hands-free approach to selling. And since Amazon is managing a majority of your FBA orders for you there’s no need! Remember, you are letting their team handle picking, packing, shipping, customer service, and returns and/or exchanges. You can see things like the order ID, product name, SKU, sales channel, shipping information, payment status, and more, but really those are just details. You mostly want to concern yourself with your order status: pending or payment complete.
No more stress over maintaining a hectic spreadsheet with tons of required manual entry! You are just in charge of sourcing awesome inventory to sell on Amazon.
Fulfillment by Amazon has a service to meet most businesses’ needs. Regardless of how many employees or capital you have or don’t have, Amazon’s has you covered. If you’re looking to expand your business without the headache, there’s an FBA service for that.
Here is the list of different FBA services and how they work:
- FBA Small and Light: Enjoy lower fulfillment costs on certain items 12oz or less (think small and large envelopes). The fulfillment cost per unit will go up or down depending on the country you’re in.
- FBA Subscribe & Save: Get repeat customers when shoppers subscribe to receive regular deliveries of eligible FBA products—at a discount!
- FBA Pan-EU: Looking to expand across the pond? Reach customers in Prime-eligible European countries like the UK, Germany, France, Spain, and Italy with fast delivery offered by FBA.
- FBA Export: International selling without the hassle or extra costs! Make your products available to international customers when you set them as export-eligible on FBA.
- Multi-Channel Fulfillment: Amazon can fulfill orders for inventory you’ve sold through other channels or from your own website.
How much does Amazon FBA cost?
The benefits and services sound great so far, right? Well, it’s time to talk about Fulfillment by Amazon fees. Like any good service, there are a few to make note of:
- Inventory storage fees
- Fulfillment fees
- Long-term storage fees
- Removal order fees
- Unplanned services fees
- Returns processing fees
This list can seem long, but the main ones you want to concern yourself with are the inventory storage fees and fulfillment fees. Inventory storage fees are charged monthly and rates depend on daily average volume (the amount of space your inventory takes up), product type, size-tier, and time of year — check out the rate cards below.
Fulfillment by Amazon Revenue Calculator
For fulfillment fees, you will want to head over to Amazon’s nifty FBA revenue calculator to estimate and preview your inventory fees. The charge is per unit and includes the cost of shipping. Your customers enjoy Amazon Prime Free Two-Day Shipping and free shipping when eligible. However, don’t forget other fees for Selling on Amazon may apply. Below, you can see a preview of the revenue calculator! Simply search UPC or product name, and estimate package dimensions, weight, and select a category.
Some fees are avoidable altogether, such as the unplanned services fee – this is charged if/when inventory is sent to a fulfillment center without proper preparation or labeling. Pay close attention to those packing guidelines and you’re in the clear! Also, removal order fees are charged on a per-item basis if you want items returned to you or if you are disposing of any inventory in a fulfillment center.
FBA Product Restrictions
An important disclaimer: Just because a certain product is eligible for sale on Amazon, doesn’t mean it will be eligible for FBA. Before sending in an item, you must first register it. If you send an item that is not registered (or one that doesn’t match what you registered) it will not be accepted and/or disposed of. Damaged or defective units are prohibited from FBA—which may deter certain resellers who source this type of inventory to resell for parts to refurbishers or other businesses. You can sell used condition products with damage but must be specified accordingly. View the full list of prohibited products here.
Also prohibited are products deemed heat-sensitive or “meltable” — so chocolates, gummies, and certain wax-based products won’t be accepted. And if your products have a label with an expiration date, there are extra considerations. Most importantly, the remaining shelf life must be long enough for the product to be fully consumed plus an extra 90 days on top of that. So you want to ensure this inventory moves quickly if you’re buying liquidation grocery to list as FBA. Read more about how Amazon defines expiration-dated product.
FBA Storage Limits
The amount you can store in Amazon’s fulfillment centers depends on your Inventory Performance Index (IPI) — you can track your IPI in your inventory performance dashboard. Your IPI updates weekly. Individual selling accounts have a limit of 10 cubic feet – and unfortunately, that value won’t change. But since you’re probably a professional seller, don’t worry about this!
If you’re a professional seller with an IPI that meets or surpasses the required threshold, you won’t be subject to storage volume limits. Bear in mind, this applies to standard-size, oversize, clothing, and footwear items. If you’re a new seller that’s been active in the program for less than 26 weeks or hasn’t hit enough sales to receive an IPI score yet, you won’t run into storage limits either.
Professional accounts with FBA storage limits are still able to utilize a minimum of 25 cubic feet. Limits are based on factors like sales volume, seasonality, historical IPI scores, and fulfillment center storage space availability. Be mindful of your score as to not exceed the storage limit and have your inventory refused. Check your dashboard to see recommendations for your FBA business and updates on your IPI score.
For even more information about FBA features, fees, and services, head over to Amazon’s website!
Find inventory to sell on Amazon—use B-Stock!
If you’re wondering what to sell on Amazon FBA, why not get started with liquidation pallets? Registered business buyers can source liquidation, overstock, and customer returned inventory directly from retailers and manufacturers they know and trust when they shop on B-Stock. Nine of the top 10 retailers liquidate with B-Stock, making it a great place to source inventory to sell using Amazon’s FBA service. To view inventory and get a look at live auctions happening now, visit B-Stock’s Auctions page. And if you’re an international buyer, you can also find inventory to sell on Amazon when you browse B-Stock Supply Europe!
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