Amazon’s “Fulfillment by Amazon” service is one of the most famous fulfillment networks that enables third party sellers to store their products in the fulfillment centers managed by Amazon.
When a customer places an order for items sold by a FBA seller, the order is picked, packed and shipped by Amazon. Customer service for these orders is also managed by Amazon, and Amazon’s shipping rates and policies apply to these orders for shipping within the US.
Process:
Sellers’ Benefits:
- Major benefit for sellers lies in the fact that they are able to scale their businesses and reach out to more customers using Amazon’s facilities.
- Since Amazon handles customer service and returns, there is an inherent trust with in customers and hence sellers don’t have to worry about building customer relationship.
- There is no minimum requirement for the quantity of products that sellers can send, also details of inventory are handled by Amazon, saving seller’s time.
- It’s simple and cost effective. Sellers are charged for the storage space and for the orders fulfilled by Amazon. Cost of shipping is included in the subscription fee charged by Amazon.
Amazon’s Benefit:
- Generates revenue via FBA fee and from the margin of seller’s products.