What is Fulfillment by Amazon?

FBA stands for Fulfillment by Amazon and translates to fulfillment by Amazon. This service enables Amazon retailers to outsource the entire logistical order processing - from goods receipt to storage, picking and shipping to returns management - so that there is virtually no physical contact with their own products.

Retailers and brands that are active in the e-commerce business can no longer avoid the online mail order company Amazon. Its extraordinary reach and great importance for customers offer the opportunity for successful business. However, there is also enormous competitive pressure on the platform. Therefore, it is important for retailers to proceed carefully and use a targeted strategy. This is where FBA comes into play, a service from Amazon, which is a possible strategy for retailers in order not to get lost among the offers of other sellers.

You sell, Amazon takes care of the rest

To make use of FBA, Amazon merchants only need to meet a few requirements. In this context, it is only essential to be actively active as a merchant. The basic procedure is as follows:

1. the merchant sends its goods to an Amazon fulfilment centre for storage.
2. as soon as an order is triggered, Amazon removes the respective product from stock and dedicates itself to packaging and shipping it to the end customer.
3. in the course of after-sales activities, Amazon takes care of returns processing and customer service.

Merchants benefit from FBA in many ways

FBA offers many advantages for Amazon merchants, because there is hardly a more uncomplicated way to sell their own products. It offers optimal solutions for logistics processes that sellers would otherwise have to handle themselves. For this reason, important resources, such as labour or storage space, can be saved, which at the same time leaves more time and money to take care of the advancement of one's own business elsewhere.
In addition, the awareness of Amazon can be a driver for the development and expansion of one's own business. Incidentally, the possibility of selling in all EU markets creates the opportunity for new customers.
But that is by no means all. Further advantages are, for example, the 24/7 customer service in the local language, the easy monitoring of stock levels or that products are put into Prime status, i.e. Amazon Prime customers benefit from free shipping.

Who is FBA suitable for?

In general, there are no limits to the use of FBA and the service can be used by all Amazon merchants. However, it is particularly worthwhile for beginners in e-commerce, as there are only few prerequisites and the implementation is possible with a low start-up capital.
For merchants with bulky products or products with a long storage time, an alternative solution is probably more attractive because the storage costs are calculated according to cubic metres and duration and can be correspondingly high.

Differences to classic fulfilment
With classic fulfilment, retailers are usually responsible for the entire supply chain themselves. It is possible to outsource various processes to external service providers. In the case of FBA, Amazon assumes complete responsibility for processing from the moment the online retailer has handed over its goods to an Amazon logistics centre or an Amazon fulfilment centre.