Did you know that Fulfillment by Amazon (FBA) isn’t just for Amazon sellers? If you sell on eBay or your own web store, you can also take advantage of Amazon’s fulfillment network.
Using FBA could allow your business to grow by giving you access to immense logistical expertise, but it does come at a price. Amazon charges premium rates for FBA and, if you’re not careful, it can be expensive—especially if stock doesn’t sell.
Order fulfillment is a major headache for multi-channel sellers. Getting it right is crucial if you want to succeed. There are benefits to using FBA—but does the service and its costs suit your business?
We break down the practical implications and discuss the pros and cons of mastering eBay fulfillment by using Amazon FBA. We’ll also look at how the recently changed prices of multi-channel fulfillment will affect online sellers.
How does an eBay seller go Amazon FBA?
You’ll need an Amazon Seller Central account to begin. Once you’re registered and logged in, follow these steps:
- Go to Multi-Channel Fulfillment in the FBA settings.
- Submit your order fulfillment requirements with either a simple online form, upload a bulk file or integrate Amazon with your web store.
- Lastly, ship your inventory to an Amazon fulfillment center.
There are no minimum requirements and you can send as many items as you want. It is worth noting that as this is not a product sold through Amazon. Customer service will be handled by you.
Amazon decides which fulfillment center you use based on factors like size, product type and storage needs, as well as location. You can select your own courier or use Amazon’s discounted service.
When your item is received, Amazon scans the FBA barcode sticker. These stickers are inexpensive and can be purchased easily. When you get an order and place it with Amazon, the company picks, packs and ships the item. You can monitor its progress using Amazon’s online tracking system.
What does Amazon FBA cost?
The cost of FBA is passed to the seller. Prices vary based on the product and shipping method. Charges include order handling, pick and pack, and weight handling.
Amazon’s official multichannel fulfillment charges
As of Aug. 30 2017, Amazon adjusted FBA fees in the U.S. to reflect the changing costs of storage, fulfillment, transportation and customer service. Here’s a summary of the changes:
- Reduced pricing in 2-Day and 1-Day shipping: online sellers will see significant drops in Expedited and Priority shipping, which will drop by as much as 15-32 percent.
- Discounted fees for larger orders: the more online sellers send, the bigger the discount they will receive from Amazon.
- Consolidation of fees: Amazon fees used to consist of individual order handling, pick and pack, and weight handling costs, but these have been simplified into one single fulfillment fee per unit.
- New product tier: Sizes are now broken down into Small Standard-Size, Large Standard-Size, Small Oversize, Medium Oversize, Large Oversize and Special Oversize.
To find out more information on the updated prices, check out Amazon’s multi-channel fulfillment page or check the prices below.
Amazon packaging—but not from Amazon?
The fact that FBA comes in Amazon packaging may encourage customers to check the price of the item on Amazon. When a customer buys an item from eBay, they may not expect it to arrive in Amazon packaging. This confusion could be addressed by adding a custom note for the buyer or choosing to ship in non-branded packaging. This service comes at an additional cost of $1 per item.
If the item is available for less on Amazon, that can be a problem for eBay sellers. (Of course, it’s the customer’s responsibility to do their research in the first place.)
What’s the downside?
To many buyers, the FBA stamp represents fast delivery and consistent service. To others, Amazon may be an unwelcome interference when they have decided to buy from eBay or a seller’s web store.
It will cost you, unless…
Additional storage fees apply for inventory stored over six months. However, Amazon will notify you when you have reached the six-month mark, you will not be charged until you surpass 365 days. You still have to manage your stock carefully and it can become very expensive if items aren’t selling. Remember to check Amazon’s stringent rules for issues like shipping labels, packaging and restricted products. Mistakes will impact your completion times.
Remember, when you use FBA you’re only paying Amazon to do the fulfillment. You still have to pay to add insurance and signature verification and to have returns shipped back to your Amazon inventory.
Ultimately, Amazon wants you to sell on its marketplace because the company makes more money that way. Amazon is happy to handle your fulfillment—for a price. Fulfillment is more expensive for items not purchased on Amazon. FBA order handling is free for Amazon sellers and $1.90 for others.
Does eBay do fulfillment?
Kind of. eBay and its fulfillment arm eBay Enterprise demerged in 2016. eBay Enterprise only offers fulfillment to enterprise clients, but they do does offer a limited Global Shipping Program for US sellers who ship international orders. On the other side, Amazon is a giant internet retailer with a global fulfillment network. Despite its best efforts, eBay struggles to compete with Amazon’s logistical supremacy. In short, eBay is an e-commerce marketplace that currently can’t offer the fulfillment services that small and medium businesses need.
To sum it up…
- FBA gets your product to the customer quicker.
- No minimum inventory requirements.
- Amazon handles the storage, packaging, pick and pack, and shipping.
- FBA can provide a consistent customer experience.
- Faster delivery leads to greater customer satisfaction.
- Scale your business faster with the delivery power of FBA.
- Access to a global fulfilment network.
- Across the board, the new fees introduced have decreased for sellers.
- Fulfillment is more expensive for items not purchased on Amazon.
- It’s expensive , especially if stock doesn’t sell or for large, heavy items.
- Insurance, signature verification and returns are additional costs.
- Amazon packaging may cause customer confusion.
- It may drive customers away from your online store.
- Less control over inventory.
FBA is a viable option for eBay sellers, but whether it suits your business or not, we’ll let you make that decision.
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