Looking to save time and reduce costs on inventory storage, order management, shipping, customer service, and other steps of ecommerce fulfillment? Here’s how to use Fulfillment by Amazon to launch or scale your business
Fulfillment by Amazon (FBA) can help you optimize and streamline your operations and reach a wider audience. Whether you’re new to selling online or an experienced seller, in this guide, we’ll walk you through how FBA works and how you can use it to grow sales.
What is FBA?
Fulfillment by Amazon is a program that helps Amazon sellers outsource fulfillment processes to Amazon. You can enroll inventory in FBA to store products in Amazon fulfillment centers. When customers place orders, Amazon can pack, ship, and provide customer service for the FBA items.
When you list products with FBA, the listings for qualified offers can display the Prime badge, letting customers know they’re eligible for free, two-day shipping. Here are some more perks:
- Using FBA for shipment costs 32% less per unit on average compared to alternatives
- FBA is a flexible program, letting you enroll as many (or as few) products as you’d like—you can even start with as little as one product
- Amazon’s customer service team can handle customer inquiries and process returns at no additional charge
FBA also has tools and sub-programs to optimize your operations and meet specific business goals, such as Remote Fulfillment with FBA, which lets you fulfill orders in other countries with inventory in the United States. Another example is Amazon Global Logistics, which lets you ship inventory directly from China to the U.S. and European fulfillment centers with competitive rates.
How Amazon FBA works: 6 steps
Let’s cover how to use FBA to meet your business goals—from enrolling products to sending in your first shipment.
Step 1: Decide on a fulfillment strategy
You can use FBA to fulfill all the products you sell, or some of them, depending on your needs. You can even use FBA to fulfill orders from your other sales channels, such as your own website. Learn more about Multi-Channel Fulfillment and connect to your channels with pre-built applications or directly through APIs for order automation.
Step 2: Add products to FBA
Once you’ve decided what you want to send to Amazon fulfillment centers, enroll products in FBA from your Seller Central account by one of two methods:
Option 1: When adding new inventory, select “Amazon will ship and provide customer service (FBA)” in the “Offer” tab.
Option 2: If you’ve already added products and want to convert them to FBA, hover over Inventory in the Seller Central main menu and select “Manage Inventory.” Click the “Edit” drop-down menu to the right of any product you’d like to fulfill through Amazon and choose “Change to Fulfilled by Amazon.”
Whenever you add or convert products to FBA, be sure to double check you’ve entered product dimensions correctly to help avoid inventory issues down the road.
Step 3: Prep and pack products
To ensure a smooth check-in at Amazon fulfillment centers, be sure to follow FBA packaging, prep, and labeling guidelines and have these items handy when relevant:
- Ship-from address
- Product measurements
- Case sizes
- Boxes to ship the items in
- Poly bags and bubble wrap
- Shipping scale
- Printer for labels
- Avery 5160 or 8160 paper to print Amazon barcodes’
Step 4: Ship products to an Amazon fulfillment center
When you’re ready to send inventory to fulfillment centers, follow the “Send to Amazon” workflow in Seller Central. Send to Amazon will outline next steps and provide best practices along the way to guide you through the shipping process.
Reduce costs and further streamline your shipping operations by using Amazon Partnered Carriers to ship inventory to Amazon fulfillment centers. Eligible carriers offer deeply discounted rates with costs billed directly to your seller account as an inbound transportation charge. You’ll see your Partnered Carrier options in the Select Shipping Carrier section in step two of the Send to Amazon workflow. With Partnered Carriers, Amazon provides printable shipping labels and automatically uploads shipment tracking information.
How long does it take for products to check in at fulfillment centers? During standard business, inventory takes an average of two-to-four weeks to check in, then it will be available for purchase. During peak business periods, this process can take four-to-six weeks, so always ensure you’ve properly prepped and labeled shipments to help avoid issues or delays.
Step 5: Track inventory and manage stock levels
While you’ll be notified of orders that FBA is taking care of for you, keep an eye on inventory levels as you plan your shipping strategy. You can manage and review inventory from the FBA dashboard. Find the dashboard in Seller Central by opening the main menu, hover over “Inventory,” and select “Dashboard” under Fulfillment by Amazon.
Use the “Shipments” tab to monitor shipments to fulfillment centers, or start the process of creating new shipments. Additionally, the “Inventory” tab lets you monitor, plan, and restock inventory. Managing your inventory remotely with FBA can help you start and scale your business quickly and efficiently.
Once your business is up and running with FBA, you can use the FBA Restock Inventory tool to take the guesswork out of inventory operations. It helps you plan shipment amounts and timeframes, and gives you custom recommendations based on sales history, demand forecast, seasonality, and replenishment settings. Customizing your replenishment settings can help you further streamline your business by optimizing factors like lead time, replenishment frequency, and supply chain settings.
Step 6: Look for ways to grow sales
Adding the Prime badge to listings with FBA can help boost sales by making offers attractive to shoppers thanks to free shipping and competitive delivery through FBA. According to one study, 84% of shoppers have made a purchase specifically because shipping was free.
How to become an Amazon FBA seller
To use FBA, sign up for an Amazon selling account by choosing a selling plan. Then, you can set up FBA in your account, and either create new listings or convert existing listings to FBA.
What are the requirements to be an Amazon FBA seller? Review the terms and conditions for becoming an Amazon seller, as well as requirements for adding inventory to FBA. You’ll also want to use the FBA revenue calculator to make sure the program will be a cost-effective option for your business.
FBA inventory requirements
Generally speaking, most products eligible for sale in the Amazon store will be eligible for FBA.
Some products may be eligible for sale on Amazon while not being eligible for FBA, or eligible with specific requirements. For example, alcoholic beverages and vehicle tires are not eligible for FBA. Similarly, dangerous goods, also known as hazmat, typically cannot be processed by FBA.
Also, if you sell products with expiration dates, be sure to review product-specific requirements related to shelf life before enrolling them in FBA.
FBA uses a pay-as-you-go model, with storage and fulfillment fees charged per unit and per order. There’s no flat fee for using or enrolling products in FBA.
Costs are based on inventory fulfillment and operations, which can include:
- Fulfillment cost: Based on product type, size, and shipping weight or dimensional weight.
- Monthly storage fees: Based on product size, volume, average number of daily units stored, dangerous goods status, and the month of the year. Monthly inventory storage fee rates differ between the periods of January-through-September and October-through-December.
- Aged inventory surcharges: Can apply to products stored in a fulfillment center for over 271 days. Surcharges are based on the total number of units, storage duration, applicable cubic-foot fees, and any applicable per-unit fees.
- Unplanned service fees: Charged for items that have not been properly packaged or prepped and require additional prep before check-in at the fulfillment center.
Visit Seller Central Help to learn more about Amazon selling costs.
More FBA tools and programs to help you grow
FBA Revenue Calculator
You can get a better sense of product profitability with the FBA Revenue Calculator, a preview tool that lets you compare revenue estimates for products based on what fulfillment channel you use. The calculator includes FBA fulfillment fees for items sold in Amazon stores as well as:
- Referral fees
- Variable closing fees
- Monthly storage fees
Use the calculator to quickly find which fees apply to each fulfillment option, add sales volume estimates to calculate total proceeds and per-unit sold estimates, and more.
Buy with Prime
Brands selling products on a direct-to-consumer site can leverage FBA to offer customers fast shipping and a familiar, trusted experience through Buy with Prime. Add Buy with Prime to your direct-to-consumer (DTC) channel to offer customers Amazon Prime shopping benefits—including free one-to-two day shipping.
FBA Subscribe & Save
If you sell products customers buy regularly, like toiletries or other consumable goods, you can let them sign up to receive recurring, scheduled deliveries through FBA Subscribe & Save. The program lets you offer customers discounted pricing, free shipping, and automatic deliveries for convenience.
Get started and grow sales with FBA
Enrolling products in FBA can be a great way to grow your business, whether you’re getting started as an Amazon seller, or you’re established in ecommerce and looking for new opportunities to expand. To save time, simplify your shipping strategy, and reach more customers, get started with FBA.
Learn more with the Amazon FBA course
Check out the FBA video playlist on YouTube for step-by-step instructions on getting started and sending your first shipment of inventory. You’ll also find overviews of FBA concepts, a tutorial for the Send to Amazon Workflow, and more.