Fulfillment by Amazon, also known as FBA for short, is a high-performing online service that helps entrepreneurs outsource their product shipments to their customers more efficiently. From packaging to delivery, the Amazon FBA program handles nearly everything so you don’t have to.
For those in e-commerce, FBA is an ideal program to help entrepreneurs and both small and large startup companies get their foot in the door, make more sales and increase their online and storefront presence. By eliminating the day-to-day operations, FBA is a beneficial avenue to move mass amounts of inventory with ease.
Before you get started on your Amazon FBA journey, here are 3 things you need to know about this program and how you can use these tips to get ahead in your business.
1. There’s no sales quota for Amazon FBA
One of the best aspects of working with Amazon’s fulfillment center is that there is no such thing as a sales quota.
In other words, Amazon does not require their sellers to hit, match or exceed a sales quota to be a part of the FBA program. Since nearly every seller offers a different product, sales may fluctuate based on the demand across various industries.
Based on 2021 sales metrics, the majority of FBA sellers make anywhere between $1,000 to $25,000 per month. For this reason, you’re able to sell as much as or as little as you choose without impacting your ‘Seller Central’ status with Amazon.
For those looking to spike sales, here are some great tips to get you moving:
- Optimize your Amazon product listing using keyword research
- Invest in professional product images
- Grow your product reviews
- Set a competitive price for your product
- Run and optimize Pay-Per-Click (PPC) campaigns
2. Storage fees may be costly
Let’s face it, storing inventory can be a costly expense. Although the FBA program is a convenient service, it comes with a price tag.
Inventory storage fees are charged to sellers on a monthly basis and calculated based on the space required to store inventory. In other words, storage rates depend on product type, size tier and time of year. It’s important to note that Amazon will charge extra with long-term storage fees. Although, for most high-performing entrepreneurs and e-commerce companies, this isn’t a problem since the intention is to move products quickly!
The question is, is it still a cost-effective method?
In short, yes. While the storage fees may deter many entrepreneurs from utilizing the Amazon fulfillment centres, there are numerous pros to using FBA services that outweigh this fee.
Benefits of storing inventory with Amazon:
- Increased inventory management opportunities
- Products are eligible for the free two-day shipping offer (i.e. Amazon Prime)
- Customers have access to 24/7 support from Amazon representatives
- Long term storage fees may encourage more efficient product movement leading to increased sales
If you’re still not sure, there is a New Seller Incentive that offers you credits, bonuses and so much more just for launching your business with Amazon.
3. You can save money by choosing one of Amazon’s partnered carrier options
For those looking to cut back on costs, you’ve come to the right place. Without a doubt, one of the best ways to save more money and improve your sales margin is by utilizing a third-party carrier to help facilitate shipments.
When it comes to Amazon shipments, trust and oversight are both key features to helping you maintain a smooth-running business.
That’s where ForwarderOne comes in!
ForwarderOne is a leading freight forwarding service helping companies all over the globe ship their products from China to the USA. Specializing in e-commerce businesses, ForwarderOne gives companies a more economically efficient and affordable option to ship cargo overseas.
In the pursuit to simplify the freight forwarding process for every e-commerce business operator, ForwarderOne offers total transparency, trust and commitment.
Here are just a few ways ForwarderOne can benefit your business:
- Reliable freight forwarding services using convenient shipment status tracking technology
- Full transparency of costs using an instant quote breakdown for all shipment information and requests
- Customer-focused services that guarantees all packages and cargo arrive on time in excellent condition
The Bottom Line
Selling on Amazon can be an incredibly rewarding and lucrative business strategy. Without wasting time, money or storage space, Amazon FBA gives entrepreneurs excellent ‘pack and ship’ convenience that you can’t find anywhere else.
Among the many things you need to know about fulfillment by amazon, the lack of any sort of sales quota, inventory storage fees and partnered carrier options are three of the top points to keep in mind when running a successful FBA business – especially in the e-commerce industry.
We want to hear from you! Comment below for your best tips when starting up an Amazon FBA business.