Fulfillment by Amazon

How does Amazon FBA work?

What is Fulfillment by Amazon?

As a partner of Amazon, you have the option to choose for in-house fulfillment, where you take care of the logistics process yourself, or Fulfillment by Amazon (FBA). If you choose for FBA, you can take advantage of the marketplace's highly advanced logistics network, infrastructure, and delivery service. 

All you have to do as a partner is make sure that the products you want to sell are delivered to Amazon's warehouse. From this point, Amazon takes care of the rest. They handle the shipping, customer service, refunds, and returns, while all FBA inventory can be tracked through Amazon Seller Central.

If you are looking for a way to save time and scale your business or need an end-to-end solution for inventory storage, shipping, and returns, along with handling customer service on those orders, then FBA may be the right option for you.

Want to know if this fulfillment option is relevant for your business? Our consultant Imco is happy to advise you. Click on the arrow below and fill out the contact form.

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Brandsom specializes in selling on marketplaces like Amazon. If you want to know more about the best Amazon strategy for your brand, you can read more in our extensive Amazon blog!

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Cost of Fulfillment by Amazon

 

With Fulfillment by Amazon, you only pay for the services you use. You don't pay a fixed monthly subscription unless you specifically choose this option.

Their subscription plan gives you the option of paying per item sold or a fixed monthly amount. You can change or cancel the subscription at any time.

Listed below are some of the costs for various services you can choose from with Amazon. 

    • Amazon's Fulfillment fees
      Fulfillment fees are calculated based on a fixed amount per unit. Variables such as product type, dimensions, and weight are taken into account. The cost includes packing, packaging, shipping, and fulfillment of orders.
      Customer service and returns are also included with these costs. FBA is clear and transparent. Costs for FBA are based on the size and weight of the package, and the website the end customer ordered the product from.


    • Amazon's Storage fees
      Partners pay for the space to store their products in Amazon's fulfillment centre. Storage fees are calculated according to the average daily volume in cubic feet per month. 

      Different rates apply for the low season and high season, as it's always a lot busier around the holidays. 

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What are the options when choosing for FBA?

 

With Fulfillment by Amazon, there are three different options to choose from:
- Multi-Country Inventory (MCI)
- European Fulfillment Network (EFN)
- PAN-European FBA

Which option is relevant to your brand depends very much on your specific goals. Listed below are the differences between the three options.

    • European Fulfillment Network (EFN):
      The EFN option is a good choice to start with, especially if your goal is to expand primarily to one European country. You decide which country you want to sell in. This is also where the warehouse will be located.

      Before choosing a country, take a good look at how efficient this particular location is for you as a seller. Obviously, you want to choose a country that has the best market for your products. Selling in other countries is still possible, but remember that cross-border fees can cut into profits.

    • Multi-Country Inventory (MCI):
      If you are thinking of selling all over Europe, then the MCI option might fit your strategy better. This allows for your products to be stored in warehouses located in different countries across Europe. Strategically choosing multiple countries to sell your products in makes it easy for a lot of customers to buy your product, while no cross-border fees are to be paid. 

      The distribution of your products is taken care of by Amazon. All you have to do is send them to one location and Amazon will take care of the rest.

    • Pan-European FBA:
      This option gives you the opportunity to distribute your products across 6 countries in Europe, making sure your products are with customers as soon as possible. This certainly is an interesting option if you want to conquer all of Europe with your brand and products.


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When should you choose for FBA?

Fulfillment by Amazon is a great solution if you're a brand owner that likes convenience. Amazon takes a lot of work off the hands of entrepreneurs and lets partners benefit from the familiarity, reach, and reliability of the brand. All you have to do is choose the right storage and transport methods that best suit your expansion strategy.

 

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Are you interested in advice on implementing the best sales strategy on Amazon, or looking for help with registering on the platform? Click on the arrow below to get in touch with one of our consultants.

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Also interesting

Other Brandsom pages with information on the best Amazon strategy for your brand:

Selling on Amazon

Amazon A+ content

Amazon Promotions

Or check out one of our blog posts:

Get in touch with Imco

Our Amazon specialist Imco is ready to answer all of your questions. Fill out the form to find out what Brandsom can do for you!

Imco van Elk, Bol.com specialist, Marketplace consultant