Decoding FBA – Fulfillment By Amazon

Fulfillment by Amazon (FBA) is one of the many unique services that Amazon offers to its online sellers. Products that come under FBA are distinguished by a Fulfillment by Amazon tag. Last year, Amazon entered the Indian market with its online marketplace and has been doing rather well since then in terms of customer features and merchant friendly services.

1. What is Fulfillment by Amazon?

Amazon is one of the largest eCommerce marketplaces in the world. It is responsible for a lot of the innovative practices involved in faster product delivery and inventory management.

Sellers who have opted for FBA get the following benefits from Amazon-

• Products can be stored in Amazon’s warehouses.
• Inventory management
• Packing and delivery of purchases made by buyers

The sellers have to ship their products to the nearest Amazon warehouse, called Amazon fulfillment centre, in the country. Currently, they are located in Bhiwandi, Mumbai and Bangalore (recently operational).

2. How does FBA work?

• Seller requests Amazon for enrollment in the FBA programme.
• Amazon does a background on the company and decides on whether the online seller fulfills the requirements.
• If approved, the seller has to register the fulfillment centre as an additional place of business for tax purposes.
• Seller lists products and quantities.
• Seller labels the products and packages, and ships to nearest fulfillment centre.
• Amazon receives and integrates the packages into the inventory process.
• When a customer makes a purchase, Amazon ships the product directly from the warehouse.

3. Pricing

The FBA programme follows a ‘pay as you go’ model and only charges for the storage space and orders fulfilled. Amazon is known for its efficiency and this arrangement ensures savings for the online seller.

Amazon India charges sellers for the following services in the FBA programme –

1. Storage of products in the warehouse
2. Increased exposure of products in its Indian website
3. Appropriate packing for the product when an order is placed
4. Shipping and delivering product
5. Customer service and returns

For additional information on Fulfillment by Amazon, please visit this link.