With its “Amazon FBA” program, the online marketplace Amazon offers a service that can make daily business much easier for retailers. But what exactly is it, what advantages does it bring and how can I use it as a merchant to earn (even more) money? These are exactly the questions we will address in the following text.
What is Amazon FBA and how does it work?
FBA stands for “Fulfillment by Amazon”, literally means “fulfillment by Amazon” and means the complete handling of packaging and shipping of the goods by Amazon. If a merchant participates in the Amazon FBA program, he has the option of sending his complete products directly to Amazon. There, the goods are then stored in one of the logistics centers and, when ordered, packed and sent to the customer. The retailer can therefore hand over his entire merchandise management to Amazon.
But the service goes even further: in addition to storage, packaging and shipping, Amazon also takes care of customer service and possible returns. This enables the retailer to concentrate even more intensively on its core business.
But how does it work exactly?
As a participant in the FBA program, the retailer first sends his goods to an Amazon logistics center. If the retailer is also the manufacturer, he can also deliver the goods directly. Amazon then stores the goods for the merchant, regardless of the number and size of the items. If an item is purchased, Amazon prepares the shipment, packs the item and finally sends it to the customer.
Making money with Amazon FBA – What are the advantages?
As we could already see above, Amazon relieves the merchant very much through the FBA offer, by taking away virtually a complete area of the company (the logistics) and managing it independently. But how does this help me as a merchant to generate more sales and ultimately earn more money?
Well, for one thing, as a merchant I have more time to focus on more essential parts of the business: buying the merchandise, quality, presentation, marketing, etc.
On the other hand, Amazon offers merchants who participate in the FBA program many other benefits aside from logistics. For example, they get a better listing of their products, which in turn leads to them being noticed faster and by more potential buyers. Furthermore, FBA merchants can sell across Europe, which extremely increases the area for potential customers. The merchant does not have to worry about shipping to other European countries here either, everything is taken care of by Amazon.
In addition, all items receive Prime status as well as the “Shipping by Amazon” banner. These two things offer an invaluable advantage over the competition. On the one hand, there are millions of Amazon Prime customers who are explicitly looking for items with the “Prime” logo, and on the other hand, products with the “Shipping through Amazon” banner are subconsciously preferred by customers because this label suggests fast shipping, good customer service and uncomplicated returns. This leads to the fact that buyers will prefer these products to the goods of other retailers and ultimately increases the chances of sales.
Another advantage is that products from FBA merchants are preferred for the so-called “Buy Box”, which in turn provides increased sales opportunities. Moreover, in this case, the “Buy” button on the mobile website is placed directly under the product image. In this day and age, when the most eager-to-buy generation browses and stores almost exclusively with their smartphones, this is a great advantage.
Summary – Why can I earn (more) money with an FBA store?
We have now seen what is behind “Fulfillment by Amazon” and how it works. But how can I earn money with it?
In summary, we can say that with an FBA store, the sales opportunities compared to a normal online store increased enormously and thus the turnover can be greatly increased in a short time. Since Amazon additionally takes care of all logistics, packaging and shipping, the merchant saves costs, since no large storage areas have to be bought or rented, no costs for packaging material are incurred and, of course, no staff has to be paid to take care of all these things in case of doubt. As a retailer, I can therefore take better and more intensive care of the purchase, sale and presentation of the goods and drive the growth of my business.
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