The most important difference between online and brick and mortar marketplaces is the physical availability of buyers. In offline brick and mortar marketplaces, the seller simply needs to pack the product and hand it over to the customer. In online marketplaces the seller needs to ship the product to the customer, ensuring that it reaches without any damage. Selling on Amazon – an online e-commerce platform – is no different.
Shipping the purchased products to buyers is an important part of being a seller on Amazon. With Amazon laying disproportionate emphasis on customer satisfaction, ensuring delivery of goods in proper condition, packaging and shipping become a major part of business operations. Amazon FBA or Fulfilled by Amazon program enables you to outsource the packaging and shipping functions to Amazon itself.
FBA program was launched by Amazon in 2006 so that the sellers could concentrate only on selling the product while leaving the logistics of packing and Shipping to Amazon. here is how the Amazon FBA program works:
- You sign up for Amazon FBA through your seller account.
- You ship your inventory to Amazon fulfillment centers or warehouses for storage.
- You sell the product from your product page.
- The product is packed and shipped by Amazon fulfillment center.
Amazon charges you for storage space, packing, and shipping. if it is less than what you would spend in packing and shipping the products to the buyer yourself, it makes sense to use the trusted Amazon infrastructure through its FBA program.
Besides costs, Amazon FBA offers some other direct and indirect benefits which we will discuss now.
Concentrate only on selling
Any seller has to wear many hats – planning, marketing, packaging, shipping, customer service, etc. to name a few. With Amazon taking up the responsibility of packaging and shipping, you can focus solely on marketing and selling. Amazon also handles customer service and product returns for its FBA products. This would free up your resources further for doing market research and looking at means to improve sales.
Improved product ranking
As you might be aware, potential customers find products on Amazon through its search engine on the homepage. Amazon product search algorithm A9 works in a way different to generic search engines like Google and Bing. It considers its own parameters that would assist the customers in identifying the products that they want. One of those considerations is FBA affiliation. A9 ranks FBA products higher than the non-FBA ones.
A possibility of bagging the Buy Now box
Buy Now box is one of the most sought-after features of Amazon. The bestseller product in any category is given Buy Box on the product page, which enables the customers to buy the product in one click. Having a Buy Now box on your product page increases your visibility, establishes your credibility and tell the potential buyers that this is a product worth buying. As products listed in FBA have a much better chance of bagging the Buy Box, signing up for Amazon FBA is a good idea.
Sell in multiple marketplaces easily
Amazon FBA ships to international locations without charging anything extra. This enables the sellers to start selling on multiple marketplaces without bothering about the logistics of international shipping. This is bound to increase sales as they reach more customers.
Win customer trust
Every product fulfilled by Amazon has the FBA tag displayed against it. When customers see the FB a tag, they understand that they will be treated to Amazon’s world-class trusted shipping network and customer service. So, they are more likely to purchase an item sold under FBA as compared to products that are not sold under FBA.
Amazon FBA program is a win-win situation for both sellers and Amazon. As a seller, you get visibility and credibility, which can easily be converted to loyal customers. If you are an Amazon seller looking to make some serious money, FBA should be your chosen channel of growth.