How Does Amazon FBA Work In 2021?

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Is your business booming in 2021? Are you struggling to keep up with the rising demand for your products? Amazon FBA might be the best solution for you and your burgeoning company. 

Fulfillment by Amazon (FBA) is an Amazon program that allows companies to expand their reach, reduce overhead, and optimize their delivery infrastructure. Using this shipping model, you can store your company’s products in Amazon’s fulfillment centers. Amazon then packs and ships your products and provides continuing customer service. 

Research shows that 79% of successful businesses have high-performing supply chains. But how do you decide whether Amazon FBA is right for your company? And how does Amazon FBA work in 2021? This blog answers those questions and more.

SellerMobile guides Amazon sellers on their eCommerce journey from start-to-finish, giving them access to software and advanced data analytics that improve brand awareness and expand your business into emerging markets. 

Our industry experts developed the Amazon Seller Mobile app using extensive industry experience. We started as an Amazon seller, which means that we understand the challenges businesses face in the emerging eCommerce business environment. Continue reading to learn how Amazon’s FBA can benefit your business.

What Is Amazon FBA?

Amazon’s FBA program enables you to store your products at Amazon’s warehouses and even handles all of your shipping needs. It is one of the most advanced fulfillment networks worldwide and helps you scale your business to reach more customers and new markets. Amazon’s FBA lets you grow your business without investing thousands into storage facilities and staff. 

An effective way to illustrate this process is to consider the following scenario: your business is thriving and you want to increase the inventory of a few products that have been performing well. Still, you’re uncertain of how you should approach the expansion. 

You experience added stress because you simply don’t have the space to expand. Should you give up on increasing your inventory? No. With Amazon FBA, all you need to do is shift your perception of inventory and storage. 

The beauty of FBA is that you get to spread your brand awareness while maintaining impeccable customer service, all without expending an ounce of energy or money. When you use Amazon FBA, your customers also associate Amazon’s efficiency with your brand. 

However, like any innovative business solution, Amazon FBA takes some effort and time to implement. So, how can you maximize the benefits you get from Amazon FBA?

How Amazon FBA Works

The good news for those considering Amazon FBA is that you can use your standard seller account to get started. Cost-effective storage and shipping solutions are only a few clicks away, and Amazon makes the instructions simple and easy to follow. 

Amazon Step-by-Step 

Getting started with Amazon FBA is surprisingly simple. As an Amazon seller, all you have to do is: 

  1. Send your products to the Amazon FBA warehouse. 
  2. Amazon stores your inventory.
  3. Customers purchase your products. 
  4. Amazon FBA handles all of your packaging and shipping. 

Let’s look at a more specific breakdown of what Amazon handles and what you have to do as the seller. 

Amazon’s FBA Responsibilities 

The following responsibilities are the FBA components Amazon handles.

  • They store your products. 
  • They handle the shipping transaction from start-to-finish.
  • They handle any reimbursements or refunds. 
  • They deposit your money into your specified bank account. 

Your FBA Responsibilities

When you use Amazon FBA, your responsibilities essentially boil down to product marketing and deciding which products you want to move. You can outsource virtually everything else. 

Amazon’s FBA gives you the chance to increase your inventory without having to worry about inventory and distribution logistics. Additionally, using tools such as Seller Mobile’s Amazon Restock, you can track and optimize all of your FBA shipments, restock inventory when needed, and reduce lost cash flow. 

Tools such as Amazon Restock take nearly all of the logistical legwork out of your distribution process. It prevents your inventory from ever getting lower than demand. In turn, it protects your company from overpaying for FBA storage fees. 

The only thing you really have to take care of with your Amazon FBA account is writing compelling product listings and handling your product marketing. Without targeted marketing and enticing product descriptions, your products won’t gain the attention they need to move. 

The Benefits of Amazon FBA

The primary benefits of Amazon FBA deal with saving sellers money on storage and shipping, but there are other indirect benefits to this strategy. 

Support and Scalability 

Expanding your business can be a logistical nightmare. Amazon FBA takes the guesswork out of this process. It lets you forget your worries about delayed shipping and lost profits from inefficient storage methods. 

You won’t have to pay steep fees for storage facilities, and if you experience rapid expansion, you won’t have to try to strategize about extra shipping. You only have to restock your Amazon FBA account with the right goods. 

Fast and Free Shipping With Amazon Prime

Amazon changed consumers’ shipping expectations. Now, everyone expects the products they buy to appear on their doorstep within 24-hours. Amazon Prime has deepened this sentiment in consumers. 

When you join Amazon FBA, you automatically qualify for Amazon Prime. With Amazon’s thousands of fulfillment centers, you don’t have to worry about a thing once you send your goods. You enjoy top-to-bottom logistics and the most efficient delivery methods. 

Higher Rankings and More Visibility 

Using the FBA program gives your products a boost in rankings on Amazon. When your products have a higher ranking, they appear for more users. When your products appear for more users, you sell more products. 

Products listed by non-FBA sellers include the product’s total cost (product cost + shipping). As an FBA seller, your products only get listed by price, which puts them at the top of the user’s search results. 

Reduced Overhead 

When you don’t have to worry about storage prices, employees, and administrative losses, you can reduce your overhead by a significant amount. Because you’re not strategizing about saving on storage and employees, you can devote more attention to marketing campaigns and increasing your bottom line. 

Increased Productivity 

If you’re primarily an eCommerce seller, Amazon FBA can displace most of your customer service, returns, storage, packing, and dispatch, placing it in Amazon’s hands. This outsourcing gives you the time and resources to spend on building SOPs that increase your supply line’s  efficiency and productivity. 

Run Your Business From Anywhere 

Using Amazon’s FBA takes away any geographical components from storage and shipping. If you use local or regional shipping companies, you confine yourself to a limited area. 

If you’re considering shipping internationally, you have to understand regulations and shipping tariffs. Countries also have different laws that you need to know if you want to sell your product there. 

Additionally, finding ways to store your product in different countries requires your employees to familiarize themselves with local customs and languages. Amazon Global and FBA can give your business a viable alternative to these international regulations, shipping tariffs, laws, and obstacles.  

Who Is a Good Fit For Amazon FBA?

Amazon FBA works best for companies that have smaller products with high turnover rates. They work best for these businesses because Amazon FBA isn’t free and it also requires you to keep tabs on your inventory. 

If you have an extensive inventory or your products have special storage requirements, you may require more specified storage solutions. When deciding whether you should use Amazon FBA, it is also important to consider how much value you place on branded packaging. 

When you use Amazon for your shipping, their label appears on your packaging, which conflicts with your marketing strategy. If you value a personalized approach to packaging, Amazon FBA may not work for you. 

FBA works best for companies who experience rapidly-increasing product demands and who need fast, efficient shipping solutions. 

Take a closer look at Amazon FBA fees here.

How To Optimize Amazon FBA

Amazon FBA isn’t an instant solution. You need to make sure you have a fully realized strategy before you start your Amazon FBA account. The following guidelines will help ensure the success of your Amazon FBA launch. 

Products and Reviews 

Before sending your inventory to Amazon, make sure all of your products have product inserts (a card that goes along with your product). Product inserts should adhere to the following best practices: 

  • Ask for honest reviews that show you care about your customer. 
  • Ask your customers to share images of them using your products on social media. 
  • Your product insert should relate to the customer that they can count on your business to solve any issues that arise. 
  • The product insert should give tips on how to use your products. 

After showing your customer they can contact you if they have any questions, you should set up an email follow-up to further your customer service confidence. 

Email Follow-Ups

Email follow-ups on Amazon are a great way to improve brand recognition and customer retention. Part of the issue consumers have with Amazon is that it is difficult to reach the companies that sell the products. By making your brand more accessible, you can increase your brand awareness. 

Consumers value Amazon seller feedback. Email follow-ups increase your brand visibility by improving your customer service and getting you more customer reviews. 

Conclusion- How Does Amazon FBA Work In 2021?

As consumers desire increasingly fast delivery, businesses have to respond with equally rapid supply chain solutions. Amazon FBA gives rapidly growing companies the opportunity to unload their shipping responsibilities. With over 73% of US Amazon sellers using Amazon FBA, isn’t it time for your company to make the switch and take advantage of Amazon’s unmatched logistics?

Implementing Amazon FBA for your business requires diligence and planning. You need to make sure your company has the correct inventory analytics and profit and cost analysis in place. 
At SellerMobile, we understand how to get the most out of your Amazon seller account. We use Amazon automation to maximize your profits, increase your brand reputation, and ensure that you use the right methods to expand your business. Register today to learn more about how SellerMobile can ease your transition into the Amazon marketplace.

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