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Amazon FBA: what it is and how it works

Amazon FBA: What it is


Amazon FBA is a service that the platform offers sellers to improve inventory management, warehousing, shipping and customer service. The acronym FBA stands for 'Fulfillment by Amazon', and stands for the type of support offered by the e-commerce company. In this case, the company ships its products to Amazon's distribution centre, which in turn stores them until there is an order to be shipped. Once the order is received, the product of interest will be packed and shipped directly by Amazon staff.

Amazon FBA: How it works

In other words, FBA works like this: the company sells and Amazon ships. In this way, the company is able to relieve itself of the burden related to logistics and improve its management by outsourcing it to the platform. In detail, Fulfillment by Amazon develops like this. The seller sends its products directly to Amazon's warehousing centre, where they are stored and warehoused. At this point, the platform is in control of the inventory, the movements of which can be monitored through tracking.

When the end customer orders one of the vendor's products that are in Amazon's warehouses, the staff pack and organise the shipment. In this case, the e-commerce company ships the products by the method chosen by the customers and provides them with the information for tracking the parcel. Finally, Amazon staff will always take care of customer service and the handling of returns.

Not only that, the Amazon FBA service can also be extended to orders placed on other platforms or from one's own site. For all sales channels, in fact, Amazon stores inventory and manages orders in a single distribution centre.

Amazon FBA
Amazon FBA

Amazon FBA: all the advantages

In short, the service is definitely a plus for companies and offers many advantages, both from a management point of view and in terms of increasing turnover. One of these is certainly the possibility of having one's own products in the 'Prime' category. In this way, articles can be displayed before others and enjoy a whole series of benefits.

This is the case, for example, with ultra-fast shipping, which allows the user to receive the desired product within a few hours. Not only that, products are displayed earlier than others and are much more popular, as Prime members tend to spend more on average. And it doesn't end there.

Those who use the FBA service, in fact, have a higher chance of winning the Buy Box. This is the box on the product page from which the user can add the item to the shopping cart or buy it immediately. The Buy Box thus allows the user to make a choice about the product and accounts for 82 per cent of Amazon's sales.

Precisely for this reason, it is a much sought-after feature for all sellers. Another big advantage of Amazon FBA concerns the possibility for customers to take advantage of Free Shipping and freight-saving. In addition to free two-day shipping, users can take advantage of the $3.99 overnight shipping service. Not only that, thanks to this service, the seller can finally relieve himself of all after-sales activities. In fact, the only action to be taken is to send their products to Amazon's fulfilment centre. And it doesn't end there.

FBA sellers have higher conversion rates because their product is considered to be sold directly by Amazon itself and the user is led to consider it more trustworthy. Of course, Amazon FBA is a paid service with a monthly fee of EUR 39.