what is amazon fba

A Beginners Guide To Amazon FBA

By Harriet
Reading Time: 4 minutes

If you’re interested in making money online, then you have probably heard about Amazon FBA.

So in this Beginners Guide to Amazon FBA, we’ll explain exactly what Amazon FBA is, how it works, and the opportunity that’s out there for you today.

Selling with Amazon FBA is a very popular way to earn money online.

Here are some key stats about the opportunity of selling with FBA:

  • There are over 5 million people selling on Amazon worldwide. (1)
  • Each month, more than 197 million people visit Amazon.com. That’s bigger than the size of the Russian population! (2)
  • Amazon is the leading marketplace for online shopping. (3)

And it’s very easy to get set-up as a seller.

So you could join the Amazon-FBA-party and take a bite of the FBA-pie – if you fancy it!

So what actually is Amazon FBA?

FBA stands for Fulfilment by Amazon. It’s a service where Amazon store, pick, pack, and deliver your products to customers who buy on Amazon or other online retail sites.

In simple terms:

You sell it, Amazon ships it.

That means you don’t have to take any trips to the post office to ship customer orders!

The way FBA works is:
  1. You send your products to Amazon.
  2. Amazon store your products in their warehouses.
    • On the off chance that anything gets damaged in the warehouse, Amazon will reimburse you.
  3. When a customer orders one of your products, Amazon picks, packs, ships and tracks the order for you.
  4. You get paid for the item (minus the commission which Amazon take)
  5. Amazon handle any returns and refunds
  6. It’s up to you to respond to any messages or feedback on your listing.
  7. Every two weeks, Amazon totals up all your sales, deducts your seller fees and deposits your profits directly into your bank account.

It’s a super simple process that takes the pain away from shipping customer orders.

Here are some of the benefits of selling with FBA…

  • There’s the opportunity for sales, sales, & more sales! By being listed on Amazon, you’re getting the opportunity to be seen by shoppers who are already in the buying-mindset.
  • Almost anyone can sell an item on Amazon. Whether it’s a product you’ve bought wholesale, made yourself or simply a second-hand product you no longer want – it’s very easy to get started.
  • You don’t need to spend money on advertising to get your product seen. With Amazon FBA, once you have created a listing – your product is available on the Amazon marketplace to buy. If you have an optimized listing, you don’t need to spend any money on advertising and you can still make sales. Yes, advertising might help you sell more… but it means that if you want to start small with smaller budgets, it’s very easy to do so.
  • Reach 100+ Million Prime members – Over 100 million people have Amazon Prime memberships. And if you sell with FBA, you qualify for Prime benefits. This means your listing will get increased visibility, fast-tracked delivery options, and 24 / 7 customer service. Which means that your customer will get a great experience with super fast delivery, at no extra cost to you.
  • You can easily sell globally (by selling in other Amazon Marketplaces). In the EU, one account can service 5 different marketplaces (UK, DE, FR, IT, ES). That means you can have just one Amazon account but you can sell across the whole of Europe. Amazon will handle customer service in the local language. A pretty cool way to go global with your brand!
  • Easy entry-point for a small business but with great scalability options. There are no minimum quantities for inventory levels, so you can send in as little as just one product. You pay for the fulfillment services and storage space used. This makes it easy to start small because there are no high set-up fees which other fulfillment centers might charge. It’s a great entry to test a product or niche.
  • Multi-sales channel fulfillment: You can use Amazon’s FBA services to fulfill orders which you sell on other marketplaces/websites. So if you have a Shopify store but don’t want to sell on Amazon, you can still fulfill your orders through Amazon. Just manually place the order in the backend of your Amazon account (or you can install a plugin if you’re in the US).
  • Increase customer satisfaction: Amazon has a reputation for providing excellent 24 / 7 customer service, in local language even during busy periods & handle customer returns. That eases customer’s minds, and can also lead to more sales.
  • Effortless logistics and shipping: Products are stored safely and delivered on time to your customers, with discounted shipping for your products to the FBA fulfillment centers.

One of the main beauties of Amazon FBA is that they take away a lot of the logistical pains, which allows you to focus more on growing your business.

Now we know what Amazon will take care of, you might be wondering…

What do you actually do – if you decide to start selling with FBA?

In a nutshell, the process is…

  1. Product research to find a product that people want to buy
  2. Order samples, product & packaging
  3. Organize the shipment of product (although your supplier is likely to package and ship)
  4. Create your listing – if you decide to sell on Amazon marketplace (Although you can use Amazon’s fulfillment services without selling on Amazon if you wish!)
  5. Manage your stock levels
  6. Create any advertising campaigns if you choose to do any.

Luckily, the above steps are easy to learn 🙂 And selling on Amazon is a process which you can rinse and repeat, over and over again.

If you pick a product with high demand, there’s a huge opportunity to scale your business and reach the millions of customers. As long as you can meet the demand and stock enough products, then you can grow a successful and profitable brand.

And who knows, maybe in a year or so, you could even sell your FBA business for $1 million.

Want to learn more about it? Then apply to join our eCommerce course today!

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