If you're into drop shipping, you need to know about FBA! FBA means "Fulfilled by Amazon." Amazon's FBA has become one of the best dropshipping suppliers in recent years. We're going to talk about what FBA is, and also how we're going to use it. FBA is a system where people pre-purchase inventory and send it to Amazon. We're not going to do that though, but we are going to use the FBA system to our advantage. We're going to SOURCE from Amazon and sell on our own site.
Be sure to check out our completely FREE webinar on how to build a successful dropship business! (Spoiler alert: In the webinar, we walk you through our secret dropship model that destroys AliExpress dropshipping in 2020!)
There are 2 million people worldwide who sell on Amazon. The FBA program allows you to take advantage of Amazon's advanced shipping and fulfillment services. You can outsource product acquisition, quality control, shipping import duties and tarrifs, monthly warehousing fees, and monthly fulfillment costs to other businesses. You pick up the product once it has landed in the FBA warehouse, already barcoded and SKUs.
Around half of Amazon's sales come from third-party sellers. If you look at the top 10000 vendors, you will see that 66% of them use Amazon's fulfillment by amazon.
Here at DropshipUSA we work with dropshippers to help you integrate FBA solutions on your website. Let's dive into some of the finer details about Amazon FBA, and how you can use FBA to dropship.
What Is FBA & How It WorksFBA or fulfillment by Amazon is an e-commerce solution where Amazon works with you and helps you grow your e-commerce business. Here are some of the things you can expect from Amazon:
- Suppliers can send their products to Amazon.
- Amazon stores the products in their warehouses.
- Amazon picks, packs, ships, and tracks the order for the supplier.
- Amazon handles returns and refunds for the products.
- Access to Amazon's stellar 24/7 customer service.
Amazon is one of the best order fulfillment solutions out there right now because of these reasons. The company has 300 million active users and 90 million prime customers. This results in a TON of suppliers sending their product to Amazon FBA, and outsourcing the warehousing and logistical aspect of their business to lower overhead and become more competitive on price. More products means more competition. On the retail level, that means lower prices - lower source costs. You see it starting to come together?
Here is how fulfillment by Amazon works:
- Amazon has a plethora of warehouses, some a million square feet. Amazon will let you know where to send your products when you let Amazon what products you are sending.
- Amazon will store and sort out your inventory. The marketplace will sort out the products and add them to their website. Amazon will reimburse you if any product is damaged in the warehouse.
- Amazon takes care of the entire transaction process. It will handle everything from accepting payments to updating your inventory.
- FBA comes with the full shipping solutions that make Amazon fantastic. It will pack, ship, and track all your orders for you.
- Amazon has one of the best customer services ever seen, and businesses enrolled in the FBA program will have the full support of its customer service department.
- Amazon does everything for you. It sums up all your sales, deducts the seller's fees, and then deposit the money directly to your bank account.
As you can see, Amazon handles most of the work. However, there are things that you, as a seller, have to do. Here they are:
- You are responsible for selecting your niche and finding which products to sell in your store. If you're not sure what products to sell on your site, watch our free webinar and get a FREE niche guide just for attending!
- You are responsible for keeping your product stocked. Make sure you never run out of products to sell.
- You are responsible for all the advertising and marketing efforts. Make sure you market everything correctly if you want to succeed.
We avoid these issues with our DropshipUSA websites by allowing other vendors to go through that whole process for every single product, and just intercepting them at that point in the supply chain.
With a catalog of 350 million products, fulfillment by Amazon is an e-commerce retailer's heaven.
Now that you know how it works, you should look into FBA as a dropshipping program for your e-commerce store.
Fulfillment by Amazon (FBA) Benefits
We've been saying that FBA or fulfillment by Amazon is a fantastic e-commerce solution for retailers. Why do we say that? Well, here are some of the benefits of FBA:
- If you ever managed your orders, you know how hard it is to fulfill an order. Amazon offers effortless logistics and shipping solutions for its partners.
- Amazon is known for providing fantastic shipping rates for its consumers, and if you've enrolled in the FBA program, then you get to take advantage of their excellent shipping infrastructure.
- Amazon manages a host of different things like customer inquiries, return shipping labels, and reverse logistics. Even though there is a fee you have to pay, the upside to FBA managing your returns is vast.
- Amazon provides your e-commerce shops with 24/7 support via phone, chat, and email support.
- Amazon has a bunch of warehouses, which means fast shipping times.
- Amazon is known for its fantastic order delivery services, and if you are enrolled in the FBA program, you can take advantage of it and get ultra fast deliveries on your products.
- Amazon has multi-channel support. You can use Amazon's Multi-Channel Fulfillment (MCF) service and sell products on other channels while Amazon fulfills the orders.
FBA Is The Solution That Works Because We Don't Sell On Amazon, We Source From There.
We can build you a fully automated successful dropshipping business with FBA integration. No need to pre-purchase inventory, ever!
If you have any questions about dropshipping or FBA, check out our completely FREE webinar on how to build a successful dropship business! We'll walk you through the process step-by-step. Or, you can have our expert team at DropshipUSA build a fully automated USA based dropship website for you in less than three days!