Fulfilment by Amazon (FBA) is a process whereby Amazon stocks a seller’s goods and lists them for sale at their site, as well as taking payment for orders and delivering goods to buyers.
A major benefit of using FBA for sellers is being able to save time by not dealing with payment and fulfilment, customer after sales service and refunds, meaning time can be channelled into sourcing and testing new products and consigning them to Amazon.
Further benefits include:
• Knowing a product will be despatched by Amazon increases buyer confidence and has a favourable impact on sales.
A recent survey by Amazon UK reported 85% of sellers enjoyed an increase in sales after beginning with FBA, with more than half of those people reporting upwards of 20% more sales.
• Product owners can sell across Amazon’s European Marketplace. On eBay, sellers maximise exposure by listing separately on multiple country eBay sites.
• Continuing selling while you are on holiday. But, as happens on eBay, there’s no need to tell prospective customers you will be out of action for a specified period. On Amazon, products are fulfilled no matter what is happening at your end, as long as sufficient stock remains in storage.
This is how FBA works:
– You prepare your goods to Amazon’s specifications, by naming and describing goods and providing reference labels and saying who will deliver your goods to Amazon.
– Amazon stocks other people’s products and charges sellers for space used.
– When it sells, Amazon picks and packs your product and delivers it to your buyer.
– Amazon handles after sales queries, including refunds, and keeps you updated on sales, returns and refunds and how much you have earned.
There is much more you need to know, all of it available inside a comprehensive PDF guide to download from Amazon here.
Now it’s time to find a product that’s just perfect for maximising your sales and profits and minimising Amazon’s share.
Let the following tips help guide your product choices…
• Choose something similar to other bestselling products on Amazon. Make your product different by creating eye-catching packaging for a private label item or by adding other items to the mix.
• The best products are – usually – small and lightweight. That’s because Amazon charges sellers for space required to store their goods. So a small, lightweight product is likely to consume a lower portion of seller profits than a large, heavy item with a similar price and profit margin.
Examples of small and lightweight products: jewellery, small collectibles, gloves, Christening spoons.
uring the listing and pricing process Amazon shows what they will earn from products of specific weight, size and price, and how much is left for you. Sellers can adjust prices for their products to maximise their own share and minimise Amazon’s.
• Product should be unique to its seller or have low seller rivalry. Numerous people marketing an identical item leads to constant price reduction wars just to remain competitive and win the coveted buy box. In extreme cases, that has led to Amazon claiming all the profits and sometimes more.
• Product bundling is just one way to acquire exclusivity and careful product selection can annihilate price wars and benefit the seller in search returns.
– Same product bundles, such as providing three units where most sellers offer one, make it easy for buyers to compare unit product prices manually. But mixed product bundles make price comparisons difficult for prospective buyers.
– Many sellers are lazy and unimaginative and won’t attempt creating their own unique product bundles.
• Items with all-year selling potential and requiring regular replenishment can turn a first time customer into a regular buyer, generating lifelong profits from just one well-researched product. Examples: soap, perfume, personalised stationery, dog and cat food and over-the-counter medicines.
• Higher prices are often achieved on Amazon for similar products offered on eBay. Experts say it’s because Amazon has more buyers with high disposable income than eBay. So you can research sales figures and prices for specific products on eBay – do it at www.goofbid.com – and then you either buy stock on eBay to sell at higher prices on Amazon or look for an alternative reliable supplier.
• Private label products reduce excessive rivalry for many brand name products and allow sellers to set their own prices and be unfettered by recommended retail prices. Private label products, sometimes called white/unlabelled/unbranded products, are provided by manufacturers who allow resellers to add their own labels. It’s almost as if the product is yours alone – and in the buyer’s mind it probably is.
• Choose products matching high frequency search terms for similar branded products. You can’t use brand names or trademarks, of course, but benefit words and phrases like ‘free’, ‘fast’, ‘amazing’ and ‘new’ are okay.
• Select products that are unlikely to break in transit. That way they are unlikely to arrive damaged and be returned for refund.
• Build a brand around products, leading to repeat customers and multiple product orders. Create your own distinctive new packaging and a name that’s easy to remember when time comes to re-order.
Examples: beard care products, greetings cards, unusual artwork.
FBA is certainly more costly than doing everything yourself – but it does saves sellers having to bother with low-value tasks, allowing you to focus on more profitable matters.