7 Aug-2015

For Newbies: FBA 101 – Introduction to Fulfillment by Amazon

Introduction to Fulfillment by Amazon
by Patrick McDaniel, Amzaar.com

Maybe you’re new to selling on Amazon and have been hearing a lot about this thing called “FBA”. Or perhaps you’ve been selling on Amazon for a while and you’re ready to use FBA but aren’t exactly sure how it works. FBA stands for “Fulfillment by Amazon”, which is a service, just as it implies, that fulfills your orders for you. That’s right, you send your things to an Amazon warehouse and they ship out all of your orders for you. Advantages of using this service include:

1) No more storing all of your stock in the garage, spare bedroom or a storage unit that you are renting

2) With Amazon packing and shipping all of your products it leaves you more time to focus on the big picture of your business

3) If you and your company are located abroad, FBA ships your items domestically from within the US so buyers won’t be put off by international shipping rates

4) Not only does Amazon manage the orders but they also manage customer service and returns

5) FBA related problems do not negatively affect your seller rating as Amazon accepts responsibility for shipping issues

6) You can also sell things on other marketplaces, such as Ebay, and Amazon will ship the item to that buyer as well via manual fulfillment

There is of course an additional fee for FBA services in addition to the standard Amazon commission structure. At the time of writing there is a flat fee of $1.04 per item plus a $1.00 order handling fee plus another fee based on the dimensions and weight of the item. The last fee can range from $0.50 for an iPad case to over $100 for an exercise bike. Learn more about the fees here. Based on the extra costs associated with FBA, you have some calculations to make to see if it’s cost effective based on what you sell and how much you sell.

Getting Started with FBA

Having Amazon take over your shipping operations is easier than it sounds. There are basically 3 steps: convert your inventory to “fulfilled by Amazon”, label your items and send your inventory to Amazon’s warehouse.

The first step is essentially telling Amazon that you would like them to fulfill your inventory, or a portion of it. This is done by converting your inventory to FBA. In Seller Central go to your inventory page. Select the box next to the items you would like to change to FBA. Click the “Action on x selected” button on the top left corner and select “Change to Fulfilled by Amazon”. On the next screen click “Convert” or “Convert and Send Inventory”.

Important Note: Sometimes Amazon will deem your items to be potentially hazardous and will not accept them until they are inspected. This could take up to a week. We’ve had clocks and coffee makers flagged as hazardous so it’s not always obvious what’s going to get held up.

The next step is labeling your products with Amazon’s unique bar codes that were created just for you and your products. These bar code labels are needed because Amazon’s warehouses are massive and every single item that comes in is scanned and organized so they know what belongs to who. There are two ways to print item labels. The first is to click the box next to your item(s) on the inventory page and under the “Action on x selected” button select “Print Item Labels”. The other way to print labels is while creating a shipment, which is the next section. Also note that labels can be printed to label sheets and Amazon lets you select the size of labels that corresponds to the labels that you have. If you do not have self-sticking labels, it is also possible to just print them out on a piece of paper, cut each individual barcode out stick it to the item using clear packing tape. Amazon will remind you but it’s also imperative to cover any existing barcodes on the item packaging as these are NOT the same as the barcode labels Amazon gives you.

Lastly, you have to let Amazon know what exactly you are going to send over and when. This is done by creating a shipment. To create a shipment select the box next to at least one of the items you plan on sending to FBA. Under the “Action on x Selected” button select “Send/ Replenish Inventory”. From this screen, select “Create a New Shipping Plan”, make sure the address you are shipping from is correct, select the packing type and click “Continue to Shipping Plan”. On the following screen, you enter how many items you are sending and you can also add more items to the list. On the following screen select the prep that will be required, usually you will prepare your own items for shipping and sale so you can just click “Continue”. The following screen is also where you can print item labels. Once you print the labels and stick them on the products, move through the screens and you’ll name your shipment, tell Amazon how many boxes you are sending and how much they weigh and eventually you will print out the box labels if you choose to use Amazon’s UPS account, which you should because it’s cheap. Once you click “Complete Shipment” Amazon will consider your items shipped. If you use Amazon’s UPS account, the shipping is prepaid so you can just drop them off at a UPS Store or schedule a pick-up.

After shipping, it usually takes 7-10 days for your items to show up for sale. Make sure to check your shipment records for any discrepancies between what you sent to Amazon and what they received.