Now, all retailers need to do is deliver their inventory to the Amazon FBA warehouse; Amazon will take care of sending the products to each client personally.
The concept behind this is to let Amazon handle the challenging aspects of running a product business on your behalf, including packaging, shipping, delivery, processing returns, and customer care.
It goes without saying that each of these services has a cost, which is frequently referred to as Amazon FBA fees. Because Amazon handles everything so well, vendors hardly feel the need to concern themselves with the nuances of their business.
Now that the entire burden is on Amazon’s capable shoulders, both sellers and merchants can concentrate on expanding and developing their businesses.
Table of Contents
Chapter 1: What is Fulfillment by Amazon (FBA)? Step-by-Step Guide
The first step in creating a shipping strategy in Amazon Seller Central is to select the products you want to ship and specify the quantity. This will allow you to choose your desired products and determine the amount. The following information should be included in your shipping plan.
1) Make a shipping strategy
The seller shipping method you select and the carrier who will manage product prep/labeling? (Amazon and you).You can choose the product you want to ship from Amazon by going to Manage Inventory. Choose the Send/Replenish Stock option from Actions in Selected. You can also use Amazon FBA shipping to create new shipping plans. It is vital to double-check the ship-from address.
This could be your home, business address, or address of a supply. This confirmation must confirm the packing type. There are two types: Individual Products and Case-Packed Products. Select Individual Products – When you’re shipping single products that are different in type, quantity, and condition, select them. If you want to send multiple identical products in a case-packed package, please choose Case-Packed Products.
2) Decide on the number of each product
After selecting Continue to ship plan, you will be taken to the next page. Here you can indicate the quantity of each item in your shipment. Amazon will have an accurate count of your entire inventory. You can either enter the quantity for each product or use the +/– buttons to adjust it. Once you’re done, select Continue.
Once you have completed this, you will be notified. This notification could contain any of the following: Information Required: Amazon requires more information regarding your product before storing it in its warehouse. Removal Required: Your product cannot be eligible and must be removed. Action Recommended Amazon will advise that the problem is fixed. Excess Inventory refers to more inventories that are allowed.
3) Assemble products
After selecting Continue on Set Quantity, you’ll be taken directly to the Prepare Products page. This page allows you to confirm your product details and additional preparation instructions.
Define who is responsible for product preparation. Amazon can help you with this. Amazon has a few products needing special handling or specific size and weight restrictions. You will also have to provide instructions if you are responsible for preparing the product. Alternatively, professional Amazon Prime FBA Prep Services can be used to reduce the possibility of errors.
This includes identifying products that need special labeling, such as Hazardous Flammable or Corrosive. Be sure to follow all Amazon FBA pre-requisite regarding how to prepare for Amazon FBA shipment. Once you’re done, choose Continue.
4) The products’ labels
The next step in labeling your products is the final. You can either print the labels yourself or have Amazon send them.
Here are three options for labeling products
An existing EAN or UPC is required for eligible products.
Include an Amazon barcode in the packaging of a product
Amazon FBA Label Service can be used to apply barcodes on your items. This is done by paying a flat fee
The tags will be generated and sent electronically if Amazon orders a label for you. After your products arrive at Amazon’s warehouse, you can either print the labels or have Amazon apply them. FBA product barcode specifications must be adhered to. These guides provide information on everything from choosing the right paper stock and printer to placing your label. Amazon Sellers often have their labels printed on their products or packaging if they sell products made by a manufacturing company.
This saves time as well as money. It is important to note that manufacturers must still comply with FBA labeling, printing guidelines, and other requirements. All items which require labels are listed on the Labeling necessary tab.
FBA Label Service should only be used if Amazon is selected in the Who Labels column. Additional fees are listed in the Label cost section. If Merchant is selected in the Who labels section, you must label the items. Now you know all the details, it is time for your barcodes. Click Print labels, and a PDF file is created.
5) Review your shipment
The final step is to inspect your shipment. This is where you will find a summary and the total number of products you send to Amazon. You can edit the shipment by going back and doing any of these steps. Once you are satisfied with the load, click on Submit shipment. After you approve shipments, the View Shipments Page will open. You have set up your shipping plan, and your package will be delivered to the Amazon fulfillment centers. Select Work on shipment to continue.
6) Prepare your shipment
Now you can do these things on the Prepare Shipment Page:
Choose a shipping company and shipping method.
Calculate the required number of shipping boxes.
Schedule and pay for a shipment.
Make labels for the boxes.
When you ship to Amazon FBA, it’s essential to adhere to all packaging requirements. While minor adjustments to your shipping plans are possible, there is an upper limit. You will need to cancel, create, or delete additional changes to your shipment.
The final step is Amazon’s FBA Shipping Process, the Summary Page. It gives a summary of your shipment. You can also use tracking tools to track your shipment and see your delivery status. After Amazon receives your product, it will go live on your Amazon listing and be available for customers to purchase. Amazon’s Fulfillment through Amazon (FBA) team will handle your order fulfillment.
Worried about how you can buy products from China and ship to Amazon FBA Warehouses? All you need to do is contact our Sales Manager and she will help you with all your inquiries and provide a free consultation.
Chapter 2: Pitfalls to Avoid When Shipping to Amazon FBA Warehouse
Amazon’s fulfillment centers are subject to strict shipping/routing guidelines. Amazon can refuse to accept inventory from freight forwarders unfamiliar with these requirements. Non-compliance might also lead to heavy fines, disposal of your inventory, and even the blocking of future Amazon FBA orders.
Let suppliers manage your shipping and logistics is not a good habit. Suppliers are responsible for procuring raw materials and manufacturing goods. They also need to follow Amazon’s shipping, labeling and documentation requirements.
Not unlike a professional freight forwarder, they don’t have the proper training in shipment reporting and export codes to help reduce costs and avoid you getting into legal trouble. Good advice will get you the best savings. Lousy advice could land you in serious trouble. Poor advice can lead to severe problems.
1) Choosing the Wrong Freight Forwarder
Arranging all logistics and shipments can complicate shipping to Amazon FBA from China. You will also need to coordinate with many people throughout the supply chain. This being the case, it is crucial to work with the right freight broker or third-party logistics company that will. You need to use a unique approach to meet all your timeline and inventory requirements, including customs clearance, FBA prep and FBA shipment.
2) Choosing the Wrong Shipping Method
If you are looking to import from China, it is essential to determine the best shipping method and lead time for your inventory to avoid stock outs. Amazon FBA’s top sellers should ensure they have enough stock to meet their needs. You will see a drop in your sell-through rate, IPI score, and restock limit.
The top three shipping methods used by sellers are listed below. You can learn more about how each way can affect transit times and costs. This option is the best for shipments exceeding two cubic meters (1.7 freight tons) and between 150-500kgs (330-1102 pounds). It is generally very fast to have your inventory delivered to Amazon FBA. Shipping standard air freight between China and the USA takes about 8 to 10 business days.
However, this comes with a higher price. The cost of general cargo from China to the US ranges between $4-8 per kilogram. Verifying rates and transit times with your freight agent is still a brilliant idea. There are always fluctuations, so it can be a better option to get your goods to Amazon on time.
The best option for goods over 2m (1.7 freight tons) or 500kg (1102 lbs). Ocean freight offers flexible shipping options, which is a benefit over air freight. You can share container space with others, also known under the name less than Container Load (LCL), or you can use an entire container called Full Load Containers (FLC). Shipping by sea is typically cheaper than air freight, at as low as $3,900 per container. In times of high demand, you may also choose to share space with other shippers. Or, you can use a full container (FLC).
Express Shipping allows you to get your goods in five days. It is ideal for shipment that weighs less than one cubic meter (.88 ton) or 150 kilograms (335 lbs). However, it can cost $5 to $9 per kg in fees. Air shipping is the best way to ship goods if speed is your priority, especially if you have a stock out. But ocean shipping will help you improve your bottom line. This is especially true if your shipment volume is large.
Heavy export seasons, such as the months leading up to Q4, can cause 30-day shipping delays. Being flexible, working closely with your freight agent, and planning using intelligent inventory management systems will help you succeed during these times.
3) Increasing Lead Times
No matter the shipping method, it’s vital to understand your supplier’s lead time so that you can track both inventory levels and orders accurately. The more time it takes your supplier for you to receive your orders, then the more units you will need to keep in inventory.
It’s important not to overestimate your lead time or make them so short that they don’t allow for any delays. Short lead times may not be ideal if you are shipping from disaster-prone countries such as China. These events can happen at any moment and can have a significant impact on your shipments.
You may also experience longer lead times that can make it more difficult to cash flow and inventory management if you have seasonal products or want to benefit from new marketing strategies that can lead to massive sales growth.
Suppose your supplier can’t meet your timeline requirements. If this happens, you may need an express shipping service to expedite the delivery. Be sure to have enough buffer stock to deal with any stock outs or delays. Once the lead time is established, work with your supplier for better cash flow control.
4) Not figuring out your estimated shipping costs in full
Is your cash flow getting less than your inventory? Be sure to estimate all shipping costs to and from China. This will allow you to plan for additional overhead expenses and ensure profitability.
Additional fees that you should not forget are:
Shipping from multiple Amazon warehouses. Amazon uses an automated algorithm to assign fulfillment centers for FBA shipping orders randomly. The algorithm uses your inventory data to identify the warehouses to that you should ship your packages. Amazon might distribute your items in certain areas to increase their proximity to customers and thus increase shipping costs.
Shipping costs during peak periods. You may be profitable in nonpeak seasons when shipping costs tend not to rise, but peak season shipping could spell doom for your margins. To ensure that your margins are healthy, ask your freight forwarder about historical increases in shipping costs. This will allow you to run all the numbers and determine if you’ll be profitable throughout the year.
US Customs and Border Protection could randomly select your shipment for inspection. It may undergo an X-ray examination or a thorough review by the Contraband Enforcement Team. Your labor and storage costs will be covered when you warehouse your cargo for random customs examination. To find out the exact price, check with US CBP. Don’t risk losing money by knowing how much shipping to Amazon FBA will cost before you place an order.
5) Procurement Orders
Businesses can outsource their order fulfillment to Amazon FBA warehouse through the Fulfillment by Amazon (FBA) programmed. Businesses transport their products to Amazon fulfillment centers, where we choose, pack, and ship orders when customers make purchases. We can process returns for those orders as well as offer customer service.
6) Insufficient Inventory Visibility
Shipping errors can happen if you don’t keep an eye on your shipments. Imagine not knowing precisely what is in production, what’s on the route, who has it, and where it’s going. Without tracking inventory, you risk missing sales opportunities and not knowing how much and when to reorder.
To improve your control over stock levels, invest in an inventory system that has an integrated inventory tracker. You can also arrange your shipping plans in stages. This way, you can easily track the progress and spot potential problems early.
7) Under-Ordering or Over-Ordering
Incorrect data could throw off your forecasting calculation. It can lead to ordering too little or too much stock, which can cause chaos. Stock outs can occur when you order too much. Over ordering can cause excess inventory and entail storage fees.
In either case, they can negatively impact your inventory performance. They can result in lower IPI scores, restock limits, and stock outs could lead to lost rankings. This will reduce the opportunity to make more money and allow you to spend more cash on regaining lost orders or eliminating excess inventory.
You should closely monitor your inventory planning and forecasting processes. If managing multiple spreadsheets is making it easier to make errors, automating Amazon inventory forecasting will help you be more precise and efficient.
Once your data is organized and extracted accurately, you can identify your stock outs (or meager sales days) and eliminate them from your future calculations. Don’t forget to factor in the days you are out of stock.
Customizable forecasting software like So Stocked allows you to include sales growth, future Lightning Deals, or seasonality in your calculations. You did read that correctly. With So Stocked, it is now possible to factor in Amazon restock limitations by storage type into forecasts.
8) Not Planning for Chinese Blackout Days
Chinese holidays such as Chinese New Year, Golden Week and Chinese New Year can cause delays in production, shipping plans and lead times. But it can also:
Raise shipping costs
Product prices should rise
It may lead to lower product quality as factories work double time to finish all pending orders before the holiday break. China’s long holiday break means it’s essential to understand when they occur so you can adjust your timeline to avoid production delays. Download the Supplier blackout dates Calendar to prepare for the Chinese national holidays.
Chapter 3: How Does FBA Works?
Ship Bob also can prepare and ship your FBA inbound shipments for free. The merchandise can then be distributed throughout FBA’s warehouse system to optimize logistics after receiving it.
1) Inbound Shipping & Receiving
If you are new to Amazon and do not have a seller profile, you will need one to use FBA. Once registered, you can send your inventory directly to Amazon’s fulfillment center via a freight forwarding service or a shipping carton.
Amazon stores, selects, packs, ships, and delivers the products to customers using this fulfillment method. Customer assistance and refunds for those orders are likewise handled by Amazon.
3) Order Fulfillment
Amazon handles all post-sale services, such as customer assistance, order return or refunds. Customers can contact the representatives of Amazon through multiple channels 24/7.
4) Customer Service & Returns
Amazon will handle, discard, or restock the handles according to your specifications. The platform also handles refund payments.
You can read about Amazon FBA in detail by clicking on the link that is given here.
Chapter 4: Get to know about Amazon FBA Warehouse Costs
Multichannel sellers must know that FBA charges higher fulfillment costs to fulfill non-Amazon orders. It adds a higher price to items in specific categories such as clothes and dangerous goods. Statista shows how Amazon logistics costs have changed over the time period.
1) Seller Fees
Amazon sells at a cost regardless of how you fulfill your orders. A professional seller account costs $39.99 monthly, but individual sellers can opt for 99c per sold item.
2) Inbound Shipping
FBA will charge you for shipping. The cost of shipping merchandise to the Amazon FBA warehouse varies according to the shipment’s attributes and origin. Amazon has negotiated shipping discounts through its partner carriers.
3) Fulfillment Fees
FBA charges for picking and packing orders, packaging them, shipping them, handling returns, customer service, and handling costs start at $3.07/unit and can rise to $200+ for more oversized items. The cost of the total charge is dependent on many factors.
Shipping speed for multichannel orders
4) Stock Removal Fees
FBA charges a removal charge to pull inventory from Amazon and dispose of unsold stock. The cost of this service varies based on weight and size tier. Prices range from $0.52 up to $7.25+
It is important to note that sellers often have problems with delayed stock removal. In other words, their inventory has remained in the Amazon FBA warehouse for many weeks or months after they paid and requested its evacuation. This causes unexpected storage costs, generating lower revenues for affected merchants.
5) Labeling Fees
Amazon requires all FBA stock to adhere to strict barcode labeling requirements. Amazon can charge you 55C per unit if the items don’t contain accurate labels.
6) FBA Prep Service & Amazon FBA warehouse Unplanned Prep Service
FBA has specific product packaging guidelines and prep guidelines. Amazon will pack and prepare your products on inbound receiving. This is a cost-effective way to avoid handling them.
FBA’s pre-service will not allow you to send products that have been improperly prepared if you don’t sign up in advance. These charges depend on the product or service type and may vary from 20 cents to $2.00 per unit.
7) Returns Processing
The fulfillment fee covers most items. However, this service doesn’t count the cost of returning goods such as accessories and apparel. FBA will bill a return processing charge equal to the original Amazon FBA warehouse Fulfillment Fee for those products. Amazon charges an additional fee for repackaging returned products for resale.
If you are interested in more Amazon FBA costs, click on the link that is given here.
Amazon offers free shipping on all orders above $25 for Prime buyers. This does not apply to FBA items. Amazon coupon offers and buyer events, such as Prime Day or Cyber Days, are the same. FBA products also qualify for these deals.
1) Prime Eligibility & Shipping
FBA has a two-day Prime shipping option for Amazon Prime subscribers. Some products are eligible for free shipping, even though the buyer isn’t Prime. It might take longer for packages to arrive for nonmembers.
FBA product listings often feature the Amazon Prime Logo, which indicates that Prime members can purchase your product with Prime Two-Day Shipping or other Prime Offers. Prime has over 200 million subscribers. Prime products have a higher number of buyers than products that aren’t Prime.
2) After-sale Support
FBA also handles all customer support-related tasks for Amazon orders. The company’s CS team has a long history of providing excellent support. It is available 24-7 via email, phone or chat, as well as live chat via the app or website.
This service level would be impossible to outsource elsewhere. The average rate of call centers in the US is about $25 to $65. Moreover, it also depends on the number of people hired. For these hours, a single employee would cost thousands and possibly hundreds of thousands each month. FBA is a highly cost-effective option.
3) Amazon’s Competitive Advantages
FBA listings receive a significant advantage over non-FBA items in Amazon’s search engine algorithm. This results in FBA products getting higher rankings in Amazon’s product search results. This is a good thing because it leads to more sales.
Amazon’s Buy Box allows you to prioritize your products. It is located at the bottom of most product listings. Clicking this button will add a selected listing to the customer’s shopping cart when you view a product sold by multiple sellers.
The platform chooses which listing “owns the Buy Box” based on seller metrics, price, shipping speeds, and fulfillment methods. The primary factor in determining Buy Box ownership?
4) A Light and Small Program
FBA’s Small and Light program allows you to reduce fulfillment costs on specific items. This increases your profit margins. According to Amazon’s product identification data, small and light pricing can be applied to products that are less than 3 lbs and must sell quickly. Qualifying merchandise must also have a minimum price of $10 and a minimum dimension of 18 x 14x 8 inches.
Certain items that require special handling–such as dangerous goods, temperature-sensitive goods, or restricted goods–don’t qualify for the Small and Light program.
These products are subject to standard storage and seller fees. Enrolling in FBA’s Small and Light program will increase your store’s profit and allow you to test out products in new markets.
5) Subscribe & Save
Amazon’s Subscribe & save feature allows customers to receive a discount and free shipping when signing up for a product subscriber, a recurring automated purchase. Furthermore, this feature will give customers a convenient, consistent delivery at their desired time and helps sellers gain repeat customers. It’s one way to earn consistent revenue with Amazon.
Selling the Subscribe & save feature does not cost anything. Merchants must meet minimum requirements like a 4.7 feedback rating or higher and keep their account active on the platform. Sellers using FBA for more than three months will be eligible for this feature.
Frequently Asked Questions
1) Do you need a business license to sell on Amazon?
You don’t need to obtain a business permit to sell on Amazon. To sell your product, you must get a business permit from your state.
You might not need a license if you are selling products sourced from other manufacturers and distributors.
2) Can you sell products directly to Amazon FBA warehouse?
You can sell directly on Amazon. However, you will need a seller account to have your product listed in the Amazon marketplace.
You must wholesale your product if you want to sell to Amazon directly. Amazon requires that you adhere to all requirements.
3) How do I submit a package to Amazon FBA warehouse?
You will need a shipping schedule and other information. You will also need to include your contact and billing details.
After creating your shipping plan, you will need labels printed and attached to your products. After creating a shipping plan, you must print your labels and connect them to your products.
4) Is shipping to Amazon FBA Warehouse free?
You will need a shipping schedule and other information. Additionally, you will also need your billing and contact information.
Once you have created your shipping plan, you need to print your labels. After creating a shipping plan, you must print your labels and attach them to your products.
Even though beginning an FBA business will require some upfront cash, the work involved won’t be nearly as time-consuming as it would be for a conventional eCommerce venture. The simple part is getting your business off the ground. Moreover, it’s harder to find ways to expand your FBA business. Utilize the tools at your disposal, and as you go, standardize your procedures.