Let’s get into this real quick. This article is going to discuss everything you need to know about Amazon FBA and what is more is that you will enjoy every second of this informative read. We do not need to re-emphasize at this point Amazon is the world’s largest e-commerce company and soon becoming the largest search engine too (you read it right).

Amazon has come up with insanely innovative ways to sell and bring products straight to the door step of their wonderful customers. Amazon even has a system which enable third party sellers also sell on their website – Pause! This is where it gets interesting.

WHAT IS AMAZON FBA?

Amazon FBA

We are going to touch down on this in a minute but what you should know first is that FBA here stands for Fulfilled By Amazon and it is a special program by amazon to partner with 3rd party Sellers. Let us stop there for a bit and examine something.

JANE’S STORY

Jane is big on commerce and she has been selling on sites like eBay for a while now. Her business has been going great but not easy. She makes about $1,500 in profit every month and she would like to expand her business but there is a tiny problem… she cant. She needs a bigger warehouse in order to store more goods and that is more cost than Jane is willing to take on right now.

One day, something magical happens and Jane runs into her old friend Shirley. Shirley is ecstatic to see Jane and she introduces something to Jane after hearing of Jane’s predicament. Shirley says that Amazon FBA can help her and even though Jane already knew that people like her self could sell on Amazon, she never really considered it.

“So what is Amazon FBA” Jane asked.

Shirley broke it down to such a level which got Jane to sign up immediately afterwards.

Here is Shirley’sexplanation.

1. You source for the product you want to sell on Amazon

2. You add the product to Amazon.com listing

3. You prep the product or items (depending on how many they are) to be send to the Amazon warehouse

4. You ship your items to Amazon

5. Amazon gets your parcel, unpacks it, and stores it for you.

6. Your items are listed on amazon for all to see

7. Your products are then featured on Amazon Prime (we will explain this in a bit)

8. An Amazon customer spots your product and buys it

9. The guys at Amazon find your product and sends it off to the customer

10. Your product arrives in time

11. You are all happy.

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And that is Fulfilment by Amazon (FBA) in a nutshell.

On hearing this. Jane could not believe it. You mean I can send as many products to amazon and I don’t have to stock them in my own warehouse? It sounded too good to be true. Now Jane had always n Amazon Prime on the Amazon.com but she never got it. Now she was beginning to.

The mind-blowing thing is that Amazon Prime would feature her product and do all that marketing with no input from her at all. Jane felt as though she had been living in a rock all this while. Amazon prime members get their shipments in Just two days and Prime members are going to buy more quickly from those on the FBA program than those who are not.

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THE STRATEGIES TO EARN

Jane was fully on board but she still had questions. For example:


Question: Why would someone buy from me as a 3rd party seller when Amazon themselves have the same product for cheaper?

Answer: That was a beautiful question and Shirley replied. “By having your products on Amazon, they become first pick when Amazon runs out of stock – that is assuming of course that all the buyers who showed up for that product were not Prime members (and this is highly unlikely).


Question: Where do I get new products to sell on Amazon?

Answer: You could ‘flip’ them. Flipping means buying low and selling high. Start by going online or to a retail store and look for products which are discounted enough for you to make good profit on Amazon.


Question: How do I know I will make a profit using amazon FBA?

Answer: Go to the store with a smart phone and make sure you install a scanning app on it. What happens is that the barcode scanner in your phone will scan the product and lets you know how much it is going for on Amazon (I know right?) Then you can enter your price into the app and it will calculate if you stand to make profit and if so, then how much profit.


Question: What if I do not have the scanning app?

Answer: Well there is an online FBA Profit calculator (sellercentral.amazon.com). When you get there, you enter:

  • The price the item is selling for on Amazon
  • Shipping cost to get to Amazon
  • Click “Calculate”

The amazon FBA calculator is a great tool in helping you know what your selling price should be and how much you stand to gain on each sale.


AMAZON FBA FEES

It is important to know the kind of fees which await you as you begin this business. Amazon charges you on the following

  • Order handling per order
  • Pick and pack per unit ordered
  • Weight per pound
  • Storage per cubic feet per month

Using a small item like a DVD, it would cost less then $2 to fulfil but that same order would cost you about $3 to fulfil if you were running your own e-commerce site.

These prices are constantly changing so if would be safe to look them up on the FBA amazon website

There are other scenarios where additional costs may come into play. Examples are:

  • Over sized Items with special handling
  • Inventory stocked for 6 months and above
  • Store rates per cubic feet

WHAT YOU NEED TO GET STARTED

To begin doing this business, it is important you have the following items:

  • Computer
  • Smart phone
  • Scanning App
  • Printer
  • Labels

It is also required to create an Amazon’s seller account before you can use FBA Amazon.

CONCLUSION

After seeing all this, there is no way Jane could turn down the offer and the opportunity. The amazon FBA calculator was a handy tool and amazon FBA fees were affordable. There was practically no down side to the arrangement.

So there we have it. An all in one guide to doing business with Amazon FBA and no longer will you ask the question what is amazon FBA? Rather you would be the one spreading the good news to your contacts about this fabulous new opportunity.

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