Fulfillment by Amazon: How FBA Works

(chiming) – With Fulfillment by Amazon or FBA you can put one of the most advanced fulfillment networks in the
world to work for your business. After watching this series you should have a basic understanding of
the process, including; what exactly FBA is, how it
can benefit you as a seller and how to get started. Let’s dig in. First off, some of you may be wondering, what is Fulfillment by Amazon? To put it simply, with
Fulfillment by Amazon you store your products in
Amazons fulfillment centers and we ship your orders,
handle customer service and take care of returns. That allows you to spend your
time growing your business. That’s not the only reason
to get started with FBA, here are a few more. Our customers absolutely
love free shipping and FBA gives you a cost
effective and easy way to offer free shipping on your products. When you use FBA, you can sell more. On Cyber Monday in 2015 customers ordered twenty three million
items from FBA sellers. Through FBA your products
may be included in innovative new programs,
such as same day delivery, which is now offered to prime members in 1,000 cities, across 27 metro areas. How about a few more stats
from 2015 before we move on. More than twice as many
items ship with Amazon Prime than with Free Shipping. Over 80% of the total physical units sold during the holiday season
were from Amazon Sellers. The number of active FBA Sellers worldwide grew 50% year over year. And in the holiday season
we saw over a 60% increase in the number of FBA
units shipped worldwide. So, how does FBA work? The first step is for you to identify the products and quantities
you’d like to fulfill using FBA and send them our way. Once we get your products,
we’ll receive them into our fulfillment network, storing them in the
Amazon Fulfillment Centers and making them available to customers. As orders come through, we
will pick, pack and ship your products on your behalf. Amazon will also provide
customer service for these orders and manage any customer returns. With FBA managing your
day to day operations you’ll have more time to focus on other areas of your business. There are three primary types of fees that will apply with FBA. Fulfillment Fees include order handling, pick and pack charges and weight handling. The fees can vary based on the size and weight of your products. Inventory Storage Fees are charged monthly and are based on the
size of your products. We use the product dimensions
to calculate the volume of the product and that is applied to the storage rate to
determine your fees. Your only charged for
the actual space used and will see a pro rated
charge if we hold your products for less than a full
month before shipping out. We also offer a variety
of Optional Services including preparing or
labeling your products and removing or disposing of inventory. Once you’ve converted an item to FBA you’ll see a fee preview
in Seller Central. Clicking on the drop down will give you a detailed break down of the fees. You can also click on
the bottom of the window to generate a report for
all of your FBA items. The FBA revenue calculator is a great tool for understanding FBA fees, as you can search for your specific item or similar items being sold on Amazon. Once you enter cost information
for fulfilling the item on your own, you can compare with what it would cost through FBA. And there you have it, an
overview of what FBA is and how it works. Next we’ll dive into how
to get started with FBA including registration and
converting your products. (chiming)

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