How does FBA work?
Lesson 8 Chapter 1 Module 2
Please note: this process only happens after your brand has been registered and your product(s) have been fully sourced and/or developed. We take you through the whole process from start to finish in our Advanced Training Programme. The goal of the Crash Course is to get you familiar with what Amazon FBA entails and how it works.
STEP 1: SEND YOUR INVENTORY TO AMAZON
The FBA process starts when you send your inventory (products) to Amazon. There are over 40 fulfillment centres in Europe. You can contact Amazon to tell them which products you're sending, and they'll tell you which warehouse(s) your products should be shipped to.
Following the FBA guidelines, you will need to label, pack and set up a shipping plan in your Seller Central Dashboard. (Your Seller Central Dashboard only becomes available once you are a registered Amazon Seller.)
STEP 2: AMAZON RECEIVES AND STORES YOUR INVENTORY
Once Amazon receives your inventory, they sort and add it to their warehouse inventory. This step requires nothing from you. Once they've sorted your inventory, it remains safely in their warehouse(s) until they ship it out (when your customers place orders).
STEP 3: CUSTOMERS START PLACING ORDERS
As soon as an order for your product(s) comes in, Amazon handles the entire transaction. They accept the payment and will update your inventory automatically.
STEP 4: AMAZON FULFILLS THE ORDER
An Amazon warehouse worker (or robot) will pick, pack and ship your product(s) to your customer(s).
STEP 5: AMAZON HANDLES CUSTOMER SERVICES ON YOUR BEHALF
Amazon will contact your customer(s) after they received their order to make sure they're satisfied and happy with the purchase. If there are any returns or questions from the customer, Amazon will handle it too.
The only thing you are responsible for is keeping an eye on customer feedback and responding to both negative and positive feedback. This is an extremely important part of your business.
STEP 6: PAY DAY!
Amazon pays you every two weeks. They automatically deduct your associated seller fees and pay the balance into your bank account.
YOUR MAIN RESPONSIBILITIES WHEN USING FBA
SOURCING AND/OR DEVELOPING PRODUCTS
Depending on which Amazon FBA business model you choose, you will either have to source or develop and manufacture products to send to Amazon.
We'll talk about the different FBA business models in upcoming lessons.
MANAGING HEALTHY INVENTORY LEVELS AT THE AMAZON WAREHOUSE(S)
Always keep an eye on your inventory stock levels. Be proactive and make sure you never run out of stock. If you do, your business will develop a bad reputation and customers will stop buying from you. If your customers go away, your business dies. Simple as that.
MARKETING YOUR BRAND AND PRODUCTS
While Amazon handles storage, shipping and customer service; you have time to effectively market your brand. Branding and marketing are crucial to any business. People need to know about you and they need a compelling reason to buy from you.
We have extensive and intensive lessons on brand building in the Advanced Training Programme.
Next we'll have a look at what you can expect to pay for using the FBA service.