Why of Amazon FBA
Amazon FBA is your go-to solution when you do not have your own logistics team, a line of delivery trucks, and a warehouse where you can store your products. Selling and marketing is formerly a full-time job — what further if you also handle the order fulfillment side of the business?
That is why Amazon FBA is heaven-sent for amateur and veteran sellers alike. But when did Amazon FBA start, and why?
In February 2005, Amazon launched an” all-you-can-eat express shipping” program, which is also known as Amazon Prime. The primary purpose of the said loyalty program is to attract more customers and drive more sales.
Online shoppers took the bait because who wouldn’t want to get their orders in lower than two days? The standard shipping generally takes around 4-5 days. Also, you only have to pay a hefty one-time fee ( initially, it was$ 79) for a year. This is further cost-effective than paying a small price ($9.48 at the time) for two-day delivery per order.
As further online shoppers join the Prime bandwagon, Amazon knows that it would hurt their nethermost line if they continue to shoulder shipping and logistics costs. Hence, the birth of Amazon FBA in 2006.
How Amazon FBA Works
This is how Amazon FBA works you sell, also Amazon ships. For a better understanding, then is the lifecycle of Amazon FBA from start to finish.
- Seller sends inventory to Amazon’s fulfillment centers.
- Amazon picks, packs, and ships the order to the customer.
- Amazon will handle customer service.
- Still, Amazon will also take care of it, If the customer wants to return the product.
“ But I can also avail myself of this service from courier companies or third-party logistics providers!” We wouldn’t argue with you on that matter, except it does not have perks like customer service and item return features. But what else can you get from Amazon FBA?
6 Benefits of Amazon FBA Program
Further, half of the third-party sellers use Amazon FBA based on a study. Contemporaneously, two-thirds of the top Amazon sellers entrust its order fulfillment operations to Amazon. It shows how valuable and useful this service is, and that is why many are using it. Below are the reasons why you should become an Amazon FBA seller
Top-notch logistics and warehousing facilities
Once you join FBA, you’ll have access to Amazon’s high-end fulfillment centers, truck trailers, air freight, bike couriers, merchant vessels, and air drones.
Amazon owns one of the most advanced fulfillment networks in the world, which has tens of thousands of full-time associates that work alongside robots.
It isn’t only the facilities and workforce you may take advantage of but also the years of experience and expertise Amazon possesses, which is known worldwide.
Fast and free shipping
Online shoppers LOVE free and quick shipping.
Amazon realized this. That is why when they launched Prime, express shipping is one of the features they included in the program. Fun fact Amazon is the brain behind same-day delivery service. Besides same-day delivery, Prime subscribers can also enjoy Prime Now 2-Hour Delivery, One-Day Shipping, and Two-Day Shipping. The online retail giant made this possible by strategically putting up fulfillment centers worldwide and employing tens of thousands of FBA staff, especially during holidays and sales.
Also, here is the inside scoop Amazon is planning to convert department store spaces preliminarily occupied by JCPenney and Sears into fulfillment centers, according to Business Insider. That is how aggressive Amazon is when it comes to fulfilling the demands of online shoppers. However, both stores filed for ruin as it was hit by the COVID-19 epidemic last year If you have not heard the news.
Amazon Prime subscribers calculate heavily on the fast, free delivery service offered in the marketplace. These peeps do not mind splurging a little to get ultra-expensive shipping and other perks exclusive for Prime members only.
According to Statista, Prime subscribers spend an average of$ 1400 each year. This is a stark difference to-Prime members who only shell out$ 600 yearly. Either, 81 of Prime members are between the age bracket of 18 and 34, which has further buying power currently.
So, if you want to sell your products to this group of generous people, you better join Amazon FBA to get instant passes and become instantly qualified for Prime shipping.
Have a chance to win the buy box
Being an Amazon FBA seller just gets sweeter and sweeter because of this benefit. The Buy Box is the most coveted space on the product detail page. It’s the section where customers can quickly add items to their shopping carts.
Every seller wants the Buy Box as it converts into sales. You can win the Buy Box if you are High-eligible because Amazon gives precedence to them.
Get the best deals on shipping rates
Amazon made an agreement with major carriers similar to UPS, USPS, FedEx, and DHL Express, and they’re called Amazon partnered carriers. These shipping companies frequently grant Amazon deeply discounted shipping rates.
Still, you do not need to negotiate just to save on shipping fees because Amazon does it for you If you are an FBA seller. Plus, your cargo is taken care of by estimable courier firms.
But stay, there is further! You do not have to formulate or suppose a business plan to scale your business quickly. Amazon has several programs under FBA that you can” add on” to your current business strategy, as follows.
- FBA Subscribe & Save = you can offer discounts on qualified FBA products to repeat customers.
- FBA Small & Light = small, lightweight, and cheap FBA inventory can get lower fulfillment fees.
- FBA Export = you can cross borders and sell your products to more than 100 countries at no additional cost.
- FBAPan-EU = let Amazon distribute and vend your products across European marketplaces at no extra charge with faster shipping time.
- Multi-Channel Fulfillment = Amazon allows you to offer your products to third-party eCommerce sites or your site. Plus, they will pick, pack, and ship to your customers.