The Amazon FBA complete guide: How does it work, and how can you maximize sales in 2023?

Amazon FBA 2023.

Amazon is a great e-commerce platform, isn't it?

If you want to start an online business, the platform gives you an approachable and popular place to sell your products.

It's fantastic, but can you imagine Amazon itself helping sell and deliver your products?

With Fulfillment By Amazon, they'll pick, pack and deliver your orders. Sounds great.

But how does it work, and how can you use this service to upgrade your sales?

Keep scrolling through this article; we'll give you all the answers!

Also, look at our Amazon Optimization Listing guide 2023 to expand your knowledge.

CodeDesign is a leading digital marketing agency ranked #1 in Lisbon, Portugal. You could work with us to accelerate your business growth.

What is Amazon FBA?

As we stated previously, FBA stands out for Fulfillment by Amazon. This option allows you, as an online seller, to use Amazon's warehouses to store your products, and the company will deliver these. Have a proper digital marketing funnel in place.

But how can this service help you? Well, picture this!

You've been selling on Amazon for quite a while, everything has been going well, and some of your products have increased in sales. You want to augment your stock, but you don't have the space to store it.

See where it goes? Now with FBA, you have a space to store it all; even more, they deliver it for you!

This process is so carefully streamlined that customers won't notice if they're buying from a third-party seller or using Fulfillment by Amazon. When they buy from you, they'll see the exact delivery, return and refund policy and receive their products ASAP.

As you can see, this option can save a lot of time-consuming duties for you and be very profitable. Nevertheless, there are some previous steps you have to do to make this work, so let's see...

How does Amazon FBA work?

How's the deal? What do you have to do?

First, you need an Amazon selling account - the obvious step #1 - to add your products to the FBA section. 

To get started, you have to:

• Choose your products: As you see, Amazon deals with "heavy work," so you have to research and know what you want to sell.
• Prepare your products: Ensure your products are transported according to  Amazon packing guidelines and shipping and routing requirements. 
• Update your inventory:  The online selling platform lets you know when your stock levels are low. You have to renew it when it's necessary.
• Create your product listings and market them effectively: This should be familiar if you have had some time selling on Amazon. You must write compelling product listings and titles to grab buyers' attention. Check out these
   9 Amazon Listing Optimization tips to succeed in this.
• Create your shipping plan: Once you're ready to send your products, make sure to create a plan where you specify the following:
  • Products you want to send to Amazon.
  • Quantity of each product
  • Shipping method and carrier details
  • Whether or not you want to prepare and label your inventory yourself or have Amazon do it.

It sounds great, but you can be suspicious; it sounds too good to be true. Well, let's see what Amazon does in this process:

1. When you send your products to Amazon's warehouses, the platform will tell you which ones you can send them.
2. They store your products safely in their places.
3. Customers purchase through the web, and Amazon takes charge of transactions, payment and updating your inventory.
4. They pack and deliver your products. At the same time, they take charge of any return or refund.
5. Amazon deposits your sales profit directly to your bank account every two weeks.

It's a game changer for your business and a solution that removes a heavyweight from your shoulders.

Nevertheless, the company charges a fee for the Fulfillment by Amazon service. Still, the costs are competitive, and the postage savings are significant. These fees are:

• Inventory storage fees: This fee depends on the size of your products. There are two categories for this fee which are non-apparel and apparel. Non-apparel depends on your product size and the peak rate, ranging from $3.07 for small products to $16.11 for oversized ones. In the apparel case, the prices are similar, ranging from $3.43 to $16.11. For more information on how to calculate it,
  click here.
• Long-term storage fees: The platform will monthly evaluate all items in a warehouse stored for more than one year (365 days). The fee will be $6.90 per cubic foot or $0.015 per unit, depending on which amount is more significant. If you want to avoid this, keep your inventory in good order.
• Fulfillment fees:  These charges refer to everything that has to do with logistics, from picking and packing orders to shipping and even returning products. Use the 
  FBA revenue calculator to estimate fees and see how to preview them. 
• Unplanned services fees: Amazon charges this fee when any inventory arrives at a center without proper preparation, so they have to do extra services to make it happen.
• Removal order fees: Amazon can dispose of your inventory in a fulfillment center for any per-item fee.
• Returns processing fees: Charged on orders with free return shipping.

Check these companies adapting to cultural differences examples.

Now that we know how Fulfillment by Amazon works, let's see its actual benefits.

Source: YouTube.

Benefits of Amazon FBA.

When you have Amazon as an ally, it should be enough to fulfill your expectations. Still, if you are trying to convince yourself about FBA, this service has other benefits. 

Check them out!

Lower cost shipping.

Are you hiring a shipping team? It doesn't seem so helpful, and it can be costly too. But letting Amazon do all this shipping job at a lower cost is a deal!

The main FBA's benefit is getting your products to customers at a lower cost, and with its discounts on your fulfillment fees, you can earn more profit per order than if you'd do it yourself. Check this article on how e-commerce influences supply chain management.

The best part is that you don't have to pay extra for the two-day shipping Amazon provides to Prime members. If you get a Qualified FBA listing, Amazib puts the prime logo for customers to know that the company handles packing, delivery, customer service and returns.

Faster shipping

FBA will help you with your savings but also help customers with their finances, as FBA products are eligible for free shipping. Then, if they're prime members, they can get the free next or two-day shipping we previously mentioned. As you see, this is a faster delivery service and more efficient than having your own warehouse with employees.

In a Boosted article, we found that by 2019 over 85% of the top U.S. Amazon sellers offered Prime shipping (up from 56% in 2016). As you can see, appealing to prime members can exponentially augment your sales, and more so because they spend more than non-members. The same article shows that a Prime member can spend up to $1,400 a year while a non-member just $600. Read this guide on what’s a good CPC.

Unlimited storage space

If things keep going well for your Amazon business and you want to augment your storage even more, FBA offers unlimited space while storing it with high security. Then, for any slow-moving products, the platform will assist you with its management system to track your inventory so you can see how long it has been sitting.

Test international expansion on Amazon

Whether you're already selling products internationally or not, FBA makes it easier for you with order fulfillment and exporting your orders to other countries. With Amazon Global Selling, you can ship your products to the countries you wish to list, and the Amazon FBA centers in those countries will facilitate the process for you. This option is perfect for businesses that want global recognition by delivering their products to new frontiers.

Source: YouTube.

Keep your Amazon Seller Account healthy.

Like any online community, large companies will not trust any vendor who decides to join. You must meet some standards so that you're more reliable in the eyes of the company.

The aspects that Amazon uses to evaluate you as a seller range from:

• Cancellation Rate
• Late Shipment Rate
• Valid Tracking Rate  
• On-Time Delivery Rate.

Getting around all these inconveniences being a seller on your own can be cumbersome, but luckily, Amazon FBA got your back on this.

Even if Amazon causes any delay or inconvenience, this won't be reflected in your score as an account. Ultimately, Amazon protects its trusted sellers!

Here is a complete guide for you on developing a business development strategy.

Check out how voice search optimization could affect your marketing strategy.

Keep your Amazon Seller Account healthy.

Like any online community, large companies will not trust any vendor who decides to join. You must meet some standards so that you're more reliable in the eyes of the company.

The aspects that Amazon uses to evaluate you as a seller range from:

• Cancellation Rate
• Late Shipment Rate
• Valid Tracking Rate  
• On-Time Delivery Rate.

Getting around all these inconveniences being a seller on your own can be cumbersome, but luckily, Amazon FBA got your back on this. Even if Amazon causes any delay or inconvenience, this won't be reflected in your score as an account. Ultimately, Amazon protects its trusted sellers!

How to maximize sales with Amazon FBA?

Now that we know what Amazon FBA is about and its benefits, it is time to take full advantage of this business model to increase our sales on the platform.

Start small.

Well, while Amazon FBA is quite helpful, make no mistake, the service can be expensive.

Therefore, it is vital to select those products that we know have already sold lies and bet on them when entering the FBA. As sellers, we can know which products tend to market faster. Even so, betting on not-very-popular products can make you a pioneer within these niches.

The idea is to bet on what is safe from the beginning and then move forward as you progress in sales. 

Check this article on Google Bard.

Use Multi-Channel Fulfillment for all sales channels.

Recommended by Amazon FBA, the platform invites you to offer your customers a "Prime-like delivery experience" where you include orders placed on channels like your website, social media shopping sites and other places where you engage with your customers. Expanding your e-commerce realm to all these channels.

Source: YouTube.

Register your brand.

Not registering your trademark puts you at a disadvantage, so what are you waiting for?

For any buyer within Amazon, a branded product will always look more reliable than a generic one. Branding differentiates you and makes you a unique product. In addition, you can miss many benefits by not being registered, such as using videos, posting longer and more detailed descriptions, and using ads on the platform.

Update photos and images.

You see, if there's something common among consumers, it is that they all prefer the visual aspect more. 

It's very strange that someone wants to buy something after only reading its description and what it does. Yes, it can be compelling and persuasive copywriting, but if consumers don't see what they'll buy, they'll look for someone else to show them more. 

So if you want to boost your FBA sales, make sure to use all the slots with photos that enhance the qualities of your product, that is, high-quality images (try to partner with a good photographer for this). Then, if you're already registered, don't miss the opportunity to add video since it is one of the most consumed forms of media in the world, and it is like the final hook to catch your users' attention. Amazon's algorithm loves this practice and favors those who fully utilize all spaces to promote their products. 

Make sure your main image is the most attractive among all the photos. For an excellent main idea, follow these guidelines: 

• White background around the entire image
•  2000 x 2000 pixels Square image
•  Approved image file type (.jpg or .png is best). 
• Use proper file name (no special characters) 

As an extra tip, use images or videos of people using your merchandise so that consumers can project themselves into them when they see them.

Get Familiar with Promotions.

Although there are few ways to promote a product on Amazon, by knowing what the platform offers, you will have enough to boost your sales. First, ensure that your profit margins are good enough to place offers that can give them a boost.

Among the available promotions you have:

• Launch a coupon: These are one of the easiest to launch and will probably give you results quickly.
• Lightning Deals and 7-Day Deals: Running This form can help you generate sales quickly. Lightning deals run for 4 to 12 hours and are promoted by Amazon through its deal pages and even sneak into Amazon Mobile. For their part, the seven days deals are announced on the page for a whole week and are limited to registered brands.
• Prime exclusive discount: These are effective as it shows your complete price list and then show the lower, better Prime-only pricing more prominently. Combining this with a coupon can be an excellent strategy to generate more sales.

Conclusion.

Amazon is a business emporium and one of the largest e-commerce companies due to its ability to expand and renew its business to make life easier for its users.

And just as Amazon seeks to collaborate with its clients at Codedesign, we aim for this goal with ours. If you need someone to advise or help you with Amazon FBA or your business, contact us to give you the tools and strategies exact for your specific case. Tell us about your business and its situations to help you take it to the next professional level. Contact us, and let's talk business!

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