How does Amazon FBA shipping work? Similar to any outsourced process, you’re essentially paying another company to handle part of your business. The benefit is that outsourced work can be more efficient, thanks to your partners’ expertise.
As a small business owner, you need to lean into your strengths when starting a business. If you spent years in online advertising, for example, you might handle more of the marketing for your company rather than look for agencies or freelancers to partner with.
However, unless you have a background in shipping, warehousing, and customer service, along with the resources or connections to run those processes internationally, you should probably consider using Amazon’s FBA model. Here’s everything you need to know about how it works.
Amazon FBA Shipping: Step By Step
Fulfillment By Amazon (FBA) puts the work of packaging, shipping, returns, and customer service in Amazon’s hands and allows you to grow your business to international customers.1
The entire process boils down to five steps:
- Set up FBA through an Amazon selling account.
- Create your product listings on Amazon through your seller account.
- Ship your products to an Amazon fulfillment center, where Amazon will store and keep track of your FBA inventory.
- When a customer buys your product, Amazon handles the whole transaction, from purchase and payment to packaging and shipping.
- Amazon sends your sales profit directly to your bank account every two weeks.
That’s the gist of it. Let’s dive into each step so you can better understand how Amazon FBA shipping works.
Step 1: Set Up Your Amazon Seller Account For FBA
Recently, Amazon has made it simple to use its FBA service. If you already have an Amazon Seller account, all you need to do is go to your dashboard and select “Register for FBA.”
If you’re just getting started as a seller, you’ll need to set up an Amazon Seller account first. Go to https://services.amazon.com, scroll down and click “Become an Amazon Seller,” and fill out the necessary information about your business.
Step 2: Create Your FBA Listings
Amazon listings allow your potential customers to discover your products. But before your customers can see the listing, you have to make sure Amazon has your products ready to ship.
First, make sure Amazon has your products ready to ship. Next, using your Amazon Seller portal, create a product listing. Next, upload images, fill in item descriptions and add details to each listing to entice your customers.
Then, convert this listing to FBA within the portal so that Amazon knows a shipment is on the way to an Amazon fulfillment center. Once a listing is created and Amazon has your items in stock, the listing can be converted to the buyer’s database (aka be visible to customers). Once this listing is created and the first shipment is received, you can restock as necessary.
Step 3: Send Your Products To Amazon’s Fulfillment Center
Once you’ve created a listing that shines, it’s time to send your FBA shipment to Amazon for handling. Here’s how to do it:
- Label – For your products to be properly received and stored, you’ll need to label the item with an Amazon product label. Each label comes with a unique barcode, helping fulfillment center workers identify and store each item. You can print these labels right from your home before shipment.
- Package – Amazon recommends that your products be “e-commerce ready.” Essentially, this means your products should be packed as if you were shipping directly to the customer. Amazon provides its FBA sellers with a handy guide to help ensure their items are ready for shipment.
- Ship – Print out a shipment label using your Amazon seller portal and apply it to your package before shipment. You will then have to make arrangements to get your goods to the warehouse. If you are shipping internationally, this will include organizing compliance documentation and an IOR.
Once Amazon receives your shipment, it’ll update you through your FBA seller account.
The good news? Every step from here on out is on Amazon’s to-do list.
Step 4: Transaction and Shipment Management
When a customer adds your item to their cart and selects “Proceed to check out,” the entire transaction is in Amazon’s court. Amazon warehouse staff selects, packs, and ships your product to its soon-to-be-satisfied customer. Meanwhile, you’re free to source more inventory, dream up new business ideas, or relax in a bubble bath.
Step 5: Get Paid
Every two weeks, Amazon will deposit your profits into your preferred bank account. It’s as simple as that.
Bonus: Refunds, Returns, and Customer Service—Covered
Not only does Amazon simplify the shipment process for sellers, but the company offers some extensive customer service and inventory management that can go a long way in helping you focus on your business.
Amazon FBA shipping provides:
- Inventory warehousing before the sale,
- Individual product packaging and shipping plans to the end customer,
- Ownership of the customer service process, including lost or damaged shipments,
- And management of product returns.
What’s Still On Your Plate
Amazon streamlines much of the selling and shipping process, but it’s important to keep in mind what’s still on your plate as an FBA seller:
- Source the Products – Amazon FBA can help you get your products to your customers, but sourcing the products is still your specialty. It’s your job to make or choose the products you want to sell.
- Product Listings and Marketing – You know your wares best, which means you’re best equipped to create the product listing and advertise your product to strategically maximize your profit.
- Maintaining Inventory – When it comes to inventory, Amazon will keep you in the loop, so it’s even easier for you to know when to replenish your products when stores get low. However, Amazon will not help you with getting your goods to their warehouse.
- Paying Fees to Amazon – This service takes a lot off your plate, but it does come at a cost. While the warehouse-to-customer shipment is covered, you must cover the shipment to Amazon and the FBA plans themselves. Plans range from the Individual plan which will cost $0.99 per unit sold to the Professional plan which costs $39.99 per month (but it stays that way no matter how items are sold).
Frequently Asked Questions About Amazon FBA
At this point, Amazon FBA is probably starting to sound like a pretty enticing option for your business. But you might still have some questions—and we have answers.
How Much Does Amazon FBA Cost?
Luckily, Amazon has several resources to help you figure out whether FBA makes sense for your burgeoning empire. Whether you are selling fruit loops or furniture suites, working out how selling methods will affect your product cost is crucial.
Here are a few of the fees you can expect when considering FBA:
- Storage fees based on how long your stock is held – This fee covers picking, packaging, and shipping orders from the warehouse to the buyer and can be predetermined from pricing tables available on Amazon seller pages. You’ll need item details, including product type, dimensions, and weight. This order fulfillment fee starts as low as $2.16 per unit for small and light items.2
- Storage fees based on the season – Similar to the fulfillment fee, you can determine the pricing based on your inventory details: product type, dimensions, and weight.
Storage fees are charged by their daily average volume in the Amazon warehouse plus the time of year. In an Amazon FBA warehouse, this cost is higher from October to December, at $2.40 per cubic foot of space, versus $0.75 from January to September.
- Specialty product fees – There are additional charges if your products include lithium batteries or are classified as dangerous goods.
The FBA calculator on Amazon Seller Central is a helpful tool in estimating FBA costs and comparing them to Fulfillment by Merchant (FBM).
Does Amazon FBA Pay For Shipping?
There are two stages of shipping involved with Amazon FBA. The first is shipping inventory from its source (your business or your supplier) to Amazon warehouses. You will have to arrange everything here and pay this charge.
If you’re shipping inside a single country, arrangements will be under Amazon’s courier accounts and thus at their lower-than-retail shipping rates. If you’re shipping to an Amazon warehouse in another country, the import costs and logistics of getting your inventory to its destination are entirely your responsibility.
The second and final shipping stage is from the Amazon warehouse to the customer. Who pays for this step is a little trickier. While Amazon will pay the actual cost at the time of shipment, you will have paid a preset fulfillment fee.
How Do I Ship Inventory To An Amazon Warehouse Within The United States?
For this process, the Amazon seller interface walks you through identifying products as FBA inventory and sending it to them by creating a shipping plan for your goods. Once you’ve provided the details they need, you’ll move on to the “work on shipment” stage that includes:
- Selecting either UPS or FedEx as the courier,
- Weighing and measuring your case(s),
- Calculating shipping charges that you’ll pay,
- And printing out labels.
And finally, you’ll need to drop your case or cases off at a local FedEx or UPS depot.
How Do I Ship Inventory To An Amazon Warehouse In Another Country?
A commonly asked question is How does Amazon FBA shipping work internationally? If you are using the FBA model, you can store your stock in any warehouse around the world and sales will be managed locally in the usual way. However, Amazon will not assist in getting your products to the facility.
A particular point of consideration is your import compliance. Import compliance is a specialty area, dealing with laws and regulations of multiple jurisdictions, all while depending on relationships with international freight and local courier services. You (or your import logistics partner) will need to provide:3
- An Importer Of Record (IOR) in the destination country,
- A correct and detailed commercial invoice,
- Offloading/loading of products between carriers and ports,
- A carrier for transport to the exit port,
- Clearing of products through customs for export,
- A carrier for transport to the destination port,
- Clearing of products through customs for import,
- Payment of taxes, duties, and fees,
- And a carrier for transport to the Amazon warehouse.
If international selling is new to you, this may seem overwhelming or beyond your business reach—but it’s not! You may be wondering what some of these things are like, “What is Importer of Record?” Amazon will not act as either the EOR or the IOR in this process; leaving you with the responsibility of getting your stock to their warehouse door. This is where the need for an Amazon Importer Of Record arises.
Just as Amazon FBA is a partner that connects you to the biggest marketplace in the world, a trusted Import and Compliance partner like Zee can help you scale up your business and reach new countries no matter your business size.
How Do I Avoid Extra Storage Costs Through Amazon FBA?
Balancing the timing of sourcing your inventory and getting it into the hands of Amazon is an integral part of making Amazon FBA work for you.
Amazon wants its warehousing and shipping process running smoothly, with products in and out of the door. If your stock is sitting on the shelf after 365 days, you may be assessed a monthly charge of $6.90 per cubic foot or $0.15 per unit, whichever is greater, in addition to regular storage fees.4
Avoiding long-term storage fees is a must for successful sellers. You can do this by:
- Managing your stock – Keep an eye on your Amazon seller inventory performance dashboard and pay attention to the advice on restocking and what to do with older inventory. Review your Inventory Health and Recommended Removal reports and look out for emails notifying you of aging stock.
- Selling more aggressively – Lower the price and special offers are a good way to get your inventory to move. Remember, if worse comes to worst, the cost to store old stock could be more than you can recoup in sales, so figure out when to cut your losses.
- Use Amazon advertising or sponsorship – Boost your product’s visibility with a “sponsored product” banner and use Amazon advertising resources to achieve a higher rank in product search results.
As the last resource, you can choose to return the product to your location or to have the warehouse dispose of it. Both options incur fees, so do the math to decide if one of these routes benefits you in the big picture.
Is Fulfillment By Amazon Worth It?
There is no one answer here. The best method depends heavily on you and your strengths and weaknesses. However, for many, it is a lifesaver, especially when operating in a different country. Nearly half of 2020 sales on Amazon were from third-party sellers, and almost 70% of those sellers are using FBA shipping. That’s more than 2 million sellers!5
Unless you’re looking to reinvent the wheel and introduce a whole new way of managing storage and shipping, it makes sense to take advantage of the opportunities FBA offers you.
Ready to Grow Your Business?
If you are looking at using the FBA model outside of your own country, you might also want to look at an all-in-one import partner you can trust to get your goods overseas safely.
Zee is ready to help you cut through the red tape faced when shipping your inventory to an international Amazon warehouse.
We can ship your goods from your headquarters to warehouses in Australia, Canada, the EU, the UK, and the USA, Japan, Mexico, and Singapore. We’ve cultivated strong relationships with freight partners across the globe to offer cost-effective rates to our clients. Bonus? Zee can even act as an Importer Of Record (IOR) to guarantee shipping success.
Our customer service team is available 24/7 to help your business thrive across the globe. And trust us, when it comes to shipping we know everything from A to Zee. Get in touch with us today and take your business to the next level.
- Amazon. Fullfilment By Amazon. https://sell.amazon.com/fulfillment-by-amazon
- Amazon. Let’s Talk Numbers. https://sell.amazon.com/pricing
- Amazon Seller Central. Using Fulfilment by Amazon for International Orders. https://sellercentral.amazon.co.uk/gp/help/external/help.html?itemID=201468510
- AMZ Finder. Amazon Long Term Storage Fees: 5 Tips FBA Sellers Should Never Miss. https://www.amzfinder.com/blog/amazon-long-term-storage-fees-5-tips-fba-sellers-never-miss/
- Big Commerce. Leveraging Amazon FBA for Your Online Sales Success. https://www.bigcommerce.com/blog/amazon-fba/#the-evolution-of-fba
- AMZ Finder. How To Ship Product To Amazon FBA Warehouse. https://www.amzfinder.com/blog/ship-product-amazon-fba-warehouse/