4 Ways You Can Benefit from Amazon FBA

Article by: Becky Trowbridge [Guest Contributor]

October 12, 2020

• Operations

Utilizing the Amazon FBA program (Fulfilled by Amazon) is a smart way to grow your business faster. You can trust Amazon to provide the quality customer service and quick fulfillment experience buyers have come to expect. That same consistency also pays off when it comes to maintaining your own seller health.

Whether you’re a long-time Amazon seller or just getting started, let’s explore four ways you can benefit from fulfilling orders with Amazon FBA.

What are the Benefits of Amazon FBA?

1. Turbo Charge Business Growth
2. Test International Expansion on Amazon
3. Keep Your Amazon Seller Account Healthy
4. No Warehouse Needed

1. Turbo Charge Business Growth

Amazon has built an incredible audience of millions of loyal Prime members. Enrolling your products in FBA makes them Prime-eligible, which is commonly used as a filter by Amazon shoppers who expect to receive their orders fast. Amazon fulfillment centers are equipped to get your orders on the way to buyers quickly, which benefits you in several ways.

For one thing, you can sell more products without needing additional staff to pick, pack, and ship orders. Shipping products to Amazon and managing FBA inventory is much simpler than managing inventory in your own warehouse unless you have a full-time operation and plenty of staff to ensure that products get out the door on time.

With FBA, you can add more products to your line without the need for extensive internal training. You can even pay an additional fee to have your inventory prepped, packaged, and/or labeled at the fulfillment center. Outsourcing these tasks makes it easy to continue to focus on building your business, because you can rest assured that the daily operations are running smoothly. Amazon has invested extensive time and money into developing an exceptional customer experience, and your business can reap the rewards.

2. Test International Expansion on Amazon

If you’re not already selling your products internationally, Amazon makes it easy to get started. For instance, the FBA Export program allows you to list your products on Amazon or your own site. Order fulfillment is a snap as Amazon exports your orders directly to customers in other countries.

You can also list and sell your products on several Amazon sites in other countries with Amazon Global Selling. Ship your products to the countries you want to list them in, and Amazon fulfillment centers in those locations will fulfill the orders for you.

If you’re located in North America, you can sign up for a North America Unified Account. Conveniently toggle between the Amazon.com, Amazon.ca, and Amazon.com.mx marketplaces to list products and manage orders. You can use FBA to fulfill your orders.

These options all provide an opportunity to test your products in other countries. This is particularly helpful for brands looking to increase recognition and reach wider audiences. Selling internationally through FBA Export or Amazon Global Selling is an easy way to dip a toe into new marketplaces to get an idea of demand and start to determine whether it makes sense to commit to truly building your brand in another location.

3. Keep Your Amazon Seller Account Healthy

Amazon doesn’t trust just anyone to sell products to its customers. As an Amazon seller, you are expected to meet and exceed Amazon’s expectations to provide a consistently positive experience for buyers. After all, many Amazon shoppers don’t even realize they are purchasing items from third-party sellers. Fulfilling orders with FBA helps you keep your seller account healthy by making it easy to meet Amazon’s performance standards.

Assuming there are no issues with the quality of your product, your main challenge is getting orders to buyers quickly and damage-free. Several of the performance metrics considered for your overall account health are only applicable to orders you fulfill outside of FBA: Cancellation Rate, Late Shipment Rate, Valid Tracking Rate, and On-Time Delivery Rate.

Another key measurement of your account health is the Order Defect Rate, which encompasses negative feedback, A-to-z Guarantee claims, and credit card chargebacks. You are less likely to receive any of these when fulfilling orders with Amazon FBA. If you do receive negative seller feedback for an order that was fulfilled by Amazon, the feedback may be struck through and will not affect your overall seller feedback score.

Shipping, professionalism, and customer service are all components of Amazon seller feedback which Amazon manages if you are using FBA to fulfill orders. In short, using Amazon’s logistics to ship your orders is one way to ensure that buyers consistently receive good service and get their orders quickly.

4. No Warehouse Needed

One of the main benefits of Amazon FBA is the ability to store your inventory at Amazon’s fulfillment centers. When you send in your shipment, Amazon will have you ship stock to different locations to ensure that your products can be delivered in a timely manner.

Selling products via FBA isn’t quite a “set it and forget it” process, though, which brings us to the importance of inventory management. Staying in stock without overstocking is key to your success. After all, Amazon charges a variety of fees for the services provided by FBA, including long term storage fees for items that haven’t sold in the past 365 days. You must have a good understanding of supply and demand to manage your Amazon inventory effectively.

Amazon’s warehouses are not meant to be long term storage facilities for products that don’t sell. Ideally, your products are selling steadily or experience increased sales due to seasonality. It’s important to keep your Amazon IPI healthy, which means avoiding excess inventory, maintaining good FBA sell-through and in-stock rates, and managing stranded inventory right away.

While you may need a large garage or local inventory storage facility to store additional inventory that is not yet needed at the fulfillment centers, you can save a lot of time and money by stocking the bulk of your inventory at FBA warehouses. Whether you’re renting or purchasing, maintaining your own warehouses can get very expensive, especially when repairs are needed or if property taxes are high in your area. You can scale faster without purchasing real estate by leveraging FBA to grow your business.

Get Growing with Amazon FBA

Amazon is an exciting platform with numerous opportunities but navigating all that it has to offer can be challenging. The team at Orca Pacific can help you with everything from FBA consulting to Amazon account management. Combining Amazon’s FBA services with expert guidance can help you grow even faster.