Fulfilled by Amazon (FBA)

Overview

Fulfillment By Amazon (FBA) is a service provided by Amazon that allows sellers to ship their merchandise to an Amazon fulfillment centers, where items are stored in warehouses until they are sold. When an order is placed, Amazon employees physically prepare, package, and ship the product(s).

Benefits of FBA

  • Having your products eligible for Amazon Prime Free Two-Day Shipping and Free Shipping

  • Your customers will get Amazon's trusted customer service and returns

  • Having access to tools that help you manage your business: Choose from optional services including product preparation, labeling, and repackaging, and Amazon partnered carrier options.

Downsides to FBA

  • Product handling issues by Amazon: Sometimes inventory can get lost or damaged in the fulfillment process. Some cases might go unnoticed, during which inventory is damaged and sellers’ money is lost. You should keep records of your shipments in case Amazon short receives inventory.

  • Complicated and precise product guidelines: Amazon has specific requirements for certain products (i.e. poly bagging and bubble wrapping) to ensure they arrive at Amazon fulfillment centers in optimal condition. You can also choose to have Amazon do the prep for a per-item fee.

  • Stickerless commingling: Amazon’s default inventory setting is to commingle the same products together from a manufacturer. You can face the risk of having low-quality products from less reputable sellers pooled together with your products, which can lead to fraud and account suspensions.

  • More returns: you may experience higher return rates once customers understand how simple it is to return a product on Amazon.