Fulfilment by Amazon (FBA) can make fulfilment easier, faster, and less expensive. It can also help you increase sales and reach customers around the globe.
Whether you’re new to selling online or an experienced seller, we’ll guide you through how FBA works.
Whether you’re new to selling online or an experienced seller, we’ll guide you through how FBA works.
What is Fulfilment by Amazon (FBA)?
Fulfilment by Amazon (FBA) lets you outsource order fulfilment to Amazon. Enroll products in FBA to:
- Store products in Amazon’s global fulfilment network
- Offer customers free, two-day shipping through Prime
- Have Amazon handle packing, shipping, returns, and customer service
- Help lower your costs, increase sales, and get more time to focus on your business
You might also be interested in extending FBA services through Multichannel Fulfilment (MCF). With MCF, you can outsource fulfilment for orders placed on your websites or another sales channel.
What are the benefits of FBA?
FBA takes fulfilment off your plate and offers a suite of tools and programs to help you optimize and grow your business.
- Increase sales: Offering reliable two-day shipping to customers through FBA can be a great way to maximize exposure and sales in the Amazon store. Programs like Subscribe & Save also help you secure repeat sales by offering customers regular deliveries of everyday essentials.
- Save time: Instead of spending time processing orders, handling customer inquiries, and managing returns, FBA lets you stay focused on developing new products and growing your business.
- Expand your reach: FBA can help you reach customers across borders with programs like Remote Fulfilment with FBA, which lets you sell in Canada, Mexico, and Brazil using your US inventory.
Interested? FBA is a flexible program, letting you enroll as many (or as few) products as you’d like. New sellers who sign up for FBA can also benefit from inventory and storage incentives.
Next, we’ll cover costs to help you determine if FBA is right for you.
Next, we’ll cover costs to help you determine if FBA is right for you.
Did you know?
You can get started with $70,000 CAD in incentives
Ready to sell with Amazon? As a new seller, you can take advantage of a series of incentives:
- 10% back on your first $70,000 CAD in branded sales, then 5% back through your first year until you reach $1,350,000 CAD
- Up to $1,250 CAD credit to create Sponsored Products ads
What does FBA cost?
FBA costs depend on the products you sell and the services you decide to use. FBA uses a pay-as-you-go model, with storage and fulfilment costs charged per unit and per order.
Costs can include:
Costs can include:
- Fulfilment costs: Covers picking and packing your orders, shipping and handling, customer service, and returns. It’s based on the product’s price, weight, and dimensions.
- Monthly storage costs: Based on the space your inventory occupies in Amazon’s fulfilment network (calculated based on your daily average volume in cubic feet).
- Aged inventory: Charged monthly for all items stored in a fulfilment centre for more than 181 days. Pro tip: maintaining sound inventory health can help you avoid this cost.
What is the FBA Revenue Calculator?
Understanding your costs and how they impact your profit is an important step in determining your fulfilment method.
A helpful tool that can remove some of the guesswork is the FBA Revenue Calculator. Use it to quickly compare estimated costs and profitability for FBA and your own fulfilment method to determine if FBA is right for you.
A helpful tool that can remove some of the guesswork is the FBA Revenue Calculator. Use it to quickly compare estimated costs and profitability for FBA and your own fulfilment method to determine if FBA is right for you.
How to become an Amazon FBA seller
To use FBA, first sign up for an Amazon selling account by choosing a selling plan. Then you can enroll products in FBA and either create new listings or convert existing listings to FBA.
What are FBA inventory requirements?
Many products eligible for sale in the Amazon store will be eligible for FBA.
Some products may be eligible for sale in the Amazon store while not being eligible for FBA, or eligible with specific requirements. For example, dangerous goods and products with expiration dates might have special requirements.
Some products may be eligible for sale in the Amazon store while not being eligible for FBA, or eligible with specific requirements. For example, dangerous goods and products with expiration dates might have special requirements.
How Amazon FBA works: 6 steps
Let’s cover how to use FBA to meet your business goals—from enrolling products to sending your first shipment to the Amazon fulfilment network.
Step 1: Decide on a fulfillment strategy
You can use FBA to fulfil all the products you sell, or some of them, depending on your needs. You can even use FBA to fulfil orders from your other sales channels through Multichannel Fulfilment and connect your channels with pre-built integrations.
Step 2: Add products to FBA
Once you’ve decided what products you want to send to Amazon fulfilment centres, enroll products in FBA from your Seller Central account using one of two methods:
- When adding new inventory, select Amazon will ship and provide customer service (FBA) in the Offer tab.
- If you’ve already added products and want to convert them to FBA, hover over Inventory in the Seller Central main menu and select Manage All Inventory. From the action menu to the right of a product, select Change to Fulfiled by Amazon.
Whenever you add or convert products to FBA, be sure to double check you’ve entered product dimensions correctly to help avoid inventory issues down the road.
Step 3: Prep, label, and pack products
To create your first FBA shipment, you’ll start by prepping, labeling, and packing your products. Proper preparation can ensure your products get transported safely and securely, and will make your items available to customers quicker.
To ensure a smooth check-in at Amazon fulfillment centres, be sure to follow FBA packaging, prep, and labeling guidelines and have these items handy when relevant:
To ensure a smooth check-in at Amazon fulfillment centres, be sure to follow FBA packaging, prep, and labeling guidelines and have these items handy when relevant:
- Ship-from address
- Product measurements
- Case sizes
- Boxes to ship the items in
- Poly bags and bubble wrap
- Shipping scale
- Printer for labels and barcodes
Based on product type and quantity, required prep could include steps like labelling, bagging, and boxing.
Step 4: Ship products to Amazon using the Send to Amazon workflow
When you’re ready to send inventory to Amazon’s fulfilment network, follow the Send to Amazon workflow in Seller Central. Send to Amazon helps sellers who use FBA or MCF get products to the Amazon fulfilment network more efficiently. The workflow guides sellers step-by-step through shipment creation and can help simplify the replenishment process.
The Send to Amazon workflow offers the following benefits:
The Send to Amazon workflow offers the following benefits:
- Save time by creating reusable case pack templates: When shipping single-SKU boxes to the Amazon fulfilment network, you can save time by creating and reusing case pack templates.
- Easily select the best shipping option: You can choose to ship products as small parcel delivery or in pallets with less than truckload delivery. You can also use both these shipping modes via multi-mode shipping.
- Access discounted shipping rates: You have the option to use an Amazon partnered carrier to ship inventory, which offers discounted shipping rates.
To monitor shipments or start the Send to Amazon workflow, hover over Inventory in the main menu of Seller Central and select Shipments. Log in to Seller Central to get started with Send to Amazon.
Step 5: Track inventory and manage stock
Managing your inventory with FBA can help you start and scale your business quickly and efficiently. It’s also important to keep an eye on your inventory levels to ensure products stay in stock and avoid long-term storage costs.
You can manage FBA inventory from Seller Central by hovering over Inventory in the main menu and selecting FBA Inventory. Here you can monitor, plan, and replenish inventory.
Another helpful resource in Seller Central is the FBA dashboard, which provides summaries of sales, shipments, and more.
Some best practices for managing inventory include:
You can manage FBA inventory from Seller Central by hovering over Inventory in the main menu and selecting FBA Inventory. Here you can monitor, plan, and replenish inventory.
Another helpful resource in Seller Central is the FBA dashboard, which provides summaries of sales, shipments, and more.
Some best practices for managing inventory include:
- Regularly checking inventory levels
- Setting replenishment alerts
- Keeping about 2 months of inventory at fulfilment centres
- Increasing stock limits using marketing and promotions
- Sending products you know will sell
Once your business is up and running with FBA, you can also use the FBA Restock Inventory tool to take the guesswork out of inventory operations. It helps you plan shipment amounts and timeframes and gives you custom recommendations based on factors like your variable costs and estimated future demand.
Step 6: Look for ways to grow sales
Offering fast, reliable shipping with FBA can help boost sales by making offers more attractive to shoppers. Beyond FBA, Amazon offers several ways you can increase sales. From using sponsored ads and other advertising options, to creating and building your own brand through Amazon Brand Registry, you have many options that can help boost your bottom line.
Get started and grow sales with FBA
Enrolling products in FBA can be a great way to grow your business, whether you’re getting started as an Amazon seller or you’re looking for new opportunities to expand your ecommerce business. Save time, simplify your shipping strategy, and reach more customers. To learn more about entering the world of ecommerce, check out this guide to selling with Amazon for beginners.
Frequently Asked Questions: FBA
Can you make money with Amazon FBA?
FBA can be a lucrative option for your business. FBA can help attract customers by offering fast and reliable delivery, and it can help you save time, money, and resources as you scale.
How do you make money with FBA?
Sign up for a selling plan, then enroll products in FBA and ship inventory into Amazon’s fulfilment network. Calculate your margins and be strategic when you set prices to ensure you’ll be able to turn a profit. To learn more, explore strategies for building a business.
How much should beginners invest in FBA?
Use free sales estimators like our Revenue Calculator to calculate your potential costs, profits, and margins for FBA. Then enroll products in FBA based on your budget.
How many products should I start with FBA?
It depends on your business goals and strategy. You can enroll as little as one product in FBA, or enroll your whole catalog. Balance your sales goals with potential expenses and check out our guide to selling online to learn more.
Can anyone become an FBA seller?
You can use FBA with either an Individual or a Professional selling plan. Before enrolling products in FBA, make sure you review FBA policies and requirements.
How much does it cost to send inventory to FBA?
The cost of shipping inventory into Amazon’s fulfilment network can depend on the type of products you want to sell, the amount you send to FBA, and the shipping methods you use. Learn more about FBA costs.
How much inventory should I send to FBA?
In general, we recommend keeping about two months of inventory available for sale in FBA storage. For a new product, consider sending a small batch at first to gauge demand. Use our Restock inventory tool to view recommended replenishment quantities and ship dates based on your lead time and other factors.
How do I handle returns through FBA?
Enroll products in FBA, and we’ll handle returns automatically. If a buyer returns a product, we return it to your inventory if it’s sellable. If it’s unsellable, create a removal order requesting that we dispose of the product or return it to you. You can also set up automatic removals and monitor your selling account for charges or reimbursements related to returns.
*A Professional selling account is $29.99/month CAD + selling fees. Learn more
