What You Need To Know About FBA: FBA Dropshipping Explained

What Is FBA & How It Works

  1. FBA or fulfillment by Amazon is an e-commerce solution where Amazon works with you and helps you grow your e-commerce business. Here are some of the things you can expect from Amazon:Suppliers can send their products to Amazon.
  2. Amazon stores the products in their warehouses.
  3. Amazon picks, packs, ships, and tracks the order for the supplier.
  4. Amazon handles returns and refunds for the products.
  5. Access to Amazon’s stellar 24/7 customer service.
  • Amazon has a plethora of warehouses, some a million square feet. Amazon will let you know where to send your products when you let Amazon what products you are sending.
  • Amazon will store and sort out your inventory. The marketplace will sort out the products and add them to their website. Amazon will reimburse you if any product is damaged in the warehouse.
  • Amazon takes care of the entire transaction process. It will handle everything from accepting payments to updating your inventory.
  • FBA comes with the full shipping solutions that make Amazon fantastic. It will pack, ship, and track all your orders for you.
  • Amazon has one of the best customer services ever seen, and businesses enrolled in the FBA program will have the full support of its customer service department.
  • Amazon does everything for you. It sums up all your sales, deducts the seller’s fees, and then deposit the money directly to your bank account.
  1. You are responsible for selecting your niche and finding which products to sell in your store.
  2. You are responsible for keeping your product stocked. Make sure you never run out of products to sell.
  3. You are responsible for all the advertising and marketing efforts. Make sure you market everything correctly if you want to succeed.

Fulfillment by Amazon (FBA) Benefits

  • If you ever managed your orders, you know how hard it is to fulfill an order. Amazon offers effortless logistics and shipping solutions for its partners.
  • Amazon is known for providing fantastic shipping rates for its consumers, and if you’ve enrolled in the FBA program, then you get to take advantage of their excellent shipping infrastructure.
  • Amazon manages a host of different things like customer inquiries, return shipping labels, and reverse logistics. Even though there is a fee you have to pay, the upside to FBA managing your returns is vast.
  • Amazon provides your e-commerce shops with 24/7 support via phone, chat, and email support.
  • Amazon has a bunch of warehouses, which means fast shipping times.
  • Amazon is known for its fantastic order delivery services, and if you are enrolled in the FBA program, you can take advantage of it and get ultra fast deliveries on your products.
  • Amazon has multi-channel support. You can use Amazon’s Multi-Channel Fulfillment (MCF) service and sell products on other channels while Amazon fulfills the orders.

Fulfillment by Amazon (FBA) Disadvantages

  • FBA is a costly program. Amazon charges you for both storage fees and fulfillment fees. So you have to be very savvy to make a profit.
  • The long term storage fees for FBA can become crippling. If your products don’t sell a lot, your products’ storing charge can eat into your operating expenses.
  • Because Amazon makes it very easy for people to return products, you may see an increased number of returns on your orders.
  • Preparing your product for shipping can become a hassle with the strict guidelines that Amazon sets. It can be especially tricky if you are starting your e-commerce business.
  • Since you are not storing your products, tracking the inventory for your products can be very tough. Finding out what you need to order and what’s not selling when you don’t have easy access to the warehouse makes it a tricky option.
  • Sales tax collection for you can be a hassle with Amazon. If Amazon sells your products in one state, then the entire process is simple, but you might find it a problem if you sell to more than one state.
  • Amazon offers you commingling or pooling with the same products from other buyers to increase your efficiency. However, that might mean you send out counterfeit or damaged products. That can increase your chances of getting bad reviews and hurting your business.

FBA Is The Solution That Works Because We Don’t Sell On Amazon, We Buy From There.



Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Arshad Amin

Arshad Amin

Freelance Writer | Entrepreneur | Digital Marketer