Sometimes though, a product page lacks one reassuring line of text – ‘Sold by Amazon’. Instead it often says ‘Fulfilled by Amazon’, which means that you’re buying a good not from Amazon, but from a third party seller.
Fulfilled by Amazon, or FBA, selling is where a third party stores their goods in Amazon warehouses, and Amazon then uses them to fulfil listings. Amazon charges a fee to keep these goods in their warehouses, but in return sellers get the benefit of Amazon’s name, logistics services and, if something goes wrong, their customer services too. And there’s another benefit too — a survey conducted by Amazon in 2013 suggested that FBA listings sold 20% more than other listings.
But what does it take to sell your goods as Fulfilled by Amazon? Well, it’s not as hard as you might think.
This article will explain how to ship with Fulfilled by Amazon.
This one goes without saying but to sell on Amazon, you have to have an Amazon account. To be specific, you need an Amazon seller account. There are two versions — a personal and a small business version. With a personal seller account, you’ll only pay fees when you make a sale on Amazon. This is great when you want to sell a couple of textbooks, but not ideal when starting a business
Business accounts do come with a monthly fee, however, which must be paid on top of your selling fees. With extra fees come some extra benefits, like approval workflows and management for payment methods and shipping addresses.
Once that’s sorted, you have to sign up for the Fulfilled by Amazon program. You’ll have to do things like work out your nearest warehouses, and decide whether or not you would like your stock comingled with other stock around the country. That means that Amazon will use stock from the closest warehouse to fulfil orders – even if you don’t have any goods in that warehouse.
This allows you to reach more customers in better time, but you have to rely on other sellers to provide goods of an equal quality – or you get the blame.
Sign up for the Fulfilled By Amazon program
Once you have an Amazon sellers account, you'll need to make sure that you are a part of the Fulfilled By Amazon program. To sell goods as Fulfilled by Amazon, all you need to do is select “I want Amazon to dispatch and provide customer service for my items if they sell” as the delivery method when you upload your listing. If you are selling more than just a few goods, you can also upload an Excel document of your goods or use Amazon's software to communicate with your stock management program.
There's no need to worry about not having enough stock - there are no minimum requirements for stock numbers.
Get your goods
Speaking of which, you’ll need goods to sell. Whether you’re selling custom made jewellery or just light bulbs, you have to find your niche before you can start making sales.
If you want to ship as Fulfilled by Amazon, you don’t just have to pick something that people want. There are other considerations to keep in mind – like the size of your goods. Amazon charges for space in their warehouses by cubic foot, so goods that are slightly smaller than usual could make for great margins.
Likewise, it’s best to remember that you’re not going to be the only person handling your goods, so fragile items are not ideal. Amazon pickers won’t assemble an order for you either, so everything has to fit in a single box.
If you have sourced your goods from a country other than the UK, you may wish to consider shipping directly from your supplier to Amazon’s warehouses to save on shipping costs. If you do decide to do so, remember that you may have custom clearance to consider.
As with any shipment, your packaging is of paramount importance. This is doubly true when selling goods as Fulfilled by Amazon, as your items are simply passed along with some Amazon branded boxes attached. This means that it’s your packaging that protects your goods during the full process, and you are responsible for making sure that they arrive at their final destination in good condition.
Also, there are FBA specific guidelines issued by Amazon, which further complicates the issue. These include:
You’re also required to make sure that there is no hazardous material that could cause harm to Amazon employees. That means that you are still allowed to send goods like knives, but there is a requirement for excellent protective packaging if you do so.
You also have to ensure that your packaging has the correct labels, most of which will be provided by Amazon. Without these labels, your shipment will not be accepted, and you may be charged to have your goods returned to you.
Take advantage of Amazon’s cheap shipping
Amazon has a large logistics division that delivers thousands of packages a day. They won’t pick up your parcels, even if you are shipping to one of their warehouses, but they have made use of their logistics contacts to provide discounted shipping for their FBA partners.
But getting your savings directly from Amazon isn’t the only way to go – especially if you’re shipping to more destinations than just Amazon warehouses. If you have already established yourself as a business and know that you will be shipping a high volume of parcels, you can get bulk discounts from a major courier like UPS or DHL. These savings may not seem large, but become significant over the course of many shipments.
Alternatively, you can look into using a freight forwarder. Freight forwarders have agreements with the same couriers that offer bulk discounts, but since their volume is so high they can get much larger discounts than most consumers, which are then passed on. For those shipping in lower volumes, freight forwarders mean that you get the benefits of a premier courier while still saving money.
Outside the EU? Get an EORI number
It’s all simple if you’re just shipping domestically, but if you’re targeting UK warehouses from outside of the European Union, there are some extra considerations to face up to. Since goods can travel freely throughout the EU, you won’t need to worry about things like customs if you’re sending from somewhere like France or Germany – but shipping from places like China does require that you deal with customs requirements.
One vital requirement is an EORI number – an Economic Operator Registration and Identification number – which is a requirement for commercial goods to pass through customs. In order to find out more about EORI numbers and to apply for one in the UK, you can visit the HMRC website.
Aiming outside the country? Get VAT registered!
With so many orders coming in from throughout the country, it is sometimes a surprise to realise that Amazon fulfils orders throughout the EU from their UK warehouses. If you're making a lot of sales in Germany – as many FBA sellers appear to be – you may wish to move some of your stock to a closer warehouse.
That means shipping your goods to Germany – well, the German FBA warehouse, which is actually located in Poland. Because the UK is part of the EU, there's no need to worry about customs, but you'll still be selling goods in Germany, which means you will have to pay German VAT. Registering is simple – for more information, have a look at this guide1.
One other thing to keep in mind is that some international warehouses may operate differently to UK warehouses. The Polish FBA warehouse is known to be guilty of this, so be aware of that when getting started.
Keep on top of things
Amazon will be in touch with you constantly through your account, so you need to be quick on your feet. You can’t just set up your process and leave it to run, since you’re working with one of the most active online marketplaces in the world. Amazon could at any point ask you to change what warehouse you are shipping too – especially if stock levels suddenly drop – so you have to be prepared to be flexible at all times.
Part of that is ensuring that your communication with your suppliers is good and clear, and that you are not committed in advance to shipping to a specific destination. Be ready for Amazon to change things, and go with the flow once they do.
Sit back, relax, and let Amazon do the work for you
With all of that out of the way, all that’s left is for you to sit back and let Amazon do the rest. All the time that you once spent picking, packaging and sending off your goods can be spent on other things – like finding more goods to sell, or sending goods to more Amazon warehouses around the country. And since Amazon also takes care of pesky things like customer service for you, keeping your customers happy doesn’t have to make you unhappy.