Updated: Jul 26
You may have heard of the term Amazon FBA and heard a few things about the subject but may not be super familiar with the overview of what is Amazon FBA. This guide will help you learn what is Amazon FBA and how it works. In addition, you will discover what's involved in the process and how much it costs to start selling on Amazon. Lastly, you will know what's required of you to sign up and why they need that information.
What is Amazon FBA?
Amazon FBA (Fulfillment By Amazon) is a service that amazon provides to its qualified 3rd party sellers that allows sellers to ship their inventory to amazon fulfillment centers where amazon will carry out the fulfilment with prime shipping. Essentially, the stuff you are selling or plan to sell can be boxed up and sent to an amazon warehouse. Once your stuff has been received, amazon will sort it, relocate it, and make it available for purchase with free 2 day, 1day, or same day shipping. Once a customer buys it, amazon will handle any returns and customer service related.
How does Amazon FBA work?
Third party sellers send their inventory to amazon, by enrolling their inventory into the FBA program during the listing process, which will be received and sold with amazon packaging, shipping, and any customer service needed. Sellers can track their inventory through seller central or the amazon seller app and see what items are in stock, being received, and sold through the amazon fulfilment network. For more details on this process, you can learn more about how amazon works.
How does Amazon track your inventory?
Amazon can track any item in its fulfillment method by a special barcode used by amazon called an FNSKU, or Fulfillment Network Stock Keeping Unit. The FNSKU is created when an item is enrolled into the FBA program and contains information that links the items, condition, seller, price, and other details to that item so it can be tracked at all times during its time within the fulfillment network.
Can you really make money with Amazon FBA?
Yes, Amazon FBA offers a great outlet for entrepreneurs and businesses to sell their goods with a huge audience with the trust of amazon. Although you may have seen a Tik Tok that makes selling on amazon seem like a pipe dream, it is true that you can make money selling on amazon. It's not something that will make you rich overnight, but it can provide a steady income for serious sellers and become a valuable cash flowing asset.
Is Amazon FBA good for beginners?
Yes! Everyone has start somewhere, and the FBA program makes it easy for new sellers to handle fulfilment in cases where the seller doesn't have room or time to commit to shipping items several days a week. When I began selling on amazon, I sold exclusively through MFN, or merchant fulfilment network, which is where I would package every order and ship it as it came in. This worked until I had about 400 books in my apartment. Then I decided to make my first FBA shipment. It was nerve wrecking because I didn't want to mess anything up and I was unsure of the process but I got through it. And once you get through your first one you will build confidence.
How much does it cost start selling through Amazon FBA?
It costs $39.99 per month for a professional selling plan through amazon although you can opt in for an individual selling plan for free by paying $0.99 on every item sold. Whether you have an individual plan or a professional plan you can opt in for the FBA program. If you are selling more than 40 items per month, you should upgrade to the professional plan which will save you on the per item fee and allow you to use more professional tools to grow your amazon business.
Other associated costs of FBA include the FBA fee which is the fee for handling the fulfilment, the cost to ship your items to amazon, and the cost of your inventory. The FBA fee will vary from item to item and its primarily determined by size and weight. The shipping to amazon will usually be discounted through a partner carrier and usually comes out to about 25 cents a pound when shipping a 40 pound box. Shipping can be much cheaper when sending pallets but your just a beginner so lets pace ourselves. And the cost of your inventory will vary depending on what you sell, and how good you source inventory.
How can I start selling on Amazon?
To start selling on amazon you must sign up to be seller on amazon seller central. This allows you sign into the amazon seller dashboard, list inventory, manage returns and all the other functions a seller needs to be able to offer products on the marketplace.
What do I need in order to sign up to sell on Amazon?
Amazon requires sellers to provide sensitive information such as name, address, tax id or social security number, license, and banking information. They also require proof of residency in the form of a utility bill (gas, electric, water) that matches your name and address. They may also require a video chat or phone call to verify your identity. Note that it is important that addresses match, and name spellings match across the board on your license, utility bill, bank account and any other relevant information requested.The same applies to a business signing up. Signing up to sell on amazon seems like half the battle but it is worth it.
Why does amazon need all of that information?
Amazon has not always been a titan of industry and along the way people have found ways to game the system. There were tons of products sold on amazon that were stolen and counterfeit and amazon had enough complaints to do something about it. In addition, once accounts were kicked off, bots were creating accounts in attempt to get new accounts for these sellers that were banned from selling on amazon. And after sometime, this is how amazon verifies the sellers now to protect the customers.
Now you understand what Amazon FBA is and how it works. You now know what's involved in the process to start selling on Amazon and how much it will cost you to start. Lastly, you know what information you need to sign up to start selling. So go forth and pursue this journey because you are the only one who can create change in your life!