Fulfillment by Amazon (FBA) possesses the potential to revolutionize any internet business. However, to unlock the true potential of the service provided by Amazon, one needs to have a thorough and complete knowledge of the secrets of the service and the advantages it offers in boosting up the sales of any internet business.
Looking over few years back, internet selling business relied on the simple method of shipping items to customers one at a time which not only consumed precious resources of a company but was also quite cumbersome and lengthy procedure. Moreover, as the sales of the business increased companies had to hire more employees and had to store their products in larger warehouses. Fulfillment by Amazon (FBA) managed to provide a solution to all these problems in a single sweep.
The service of FBA can be considered as an intermediary between your business and clients. Instead of shipping products yourselves, all you have to do is to ship your entire catalogue of products to Amazon in bulk and then Amazon would take care of all the deliveries by packing and shipping each individual order for you.
What makes FBA different from other such services?
There are a number of fulfillment centers out there who provide the service of shipping orders for your business. So what is it exactly that differentiates FBA from other such services and makes it special?
Simple answer to this question is the sales bump that your business would get from using FBA.
One of the biggest reasons for increase in sales through the service of Fulfillment by Amazon is that the products of your business can get qualified for the Amazon’s Free Super Saver Shipping which means that Amazon offers free shipping on orders exceeding $25. AND to add icing on the cake Amazon offers its Prime members free two day shipping on their products.
Service that is 24/7
Fulfillment by Amazon (FBA) works 24 hours a day to make sure that all your orders reach intended clients as soon as possible.
You can go out on vacation when you have your orders placed upon Amazon Fulfillment Center and still be assured that your business would continue to run smoothly without any glitch of any kind. The orders would continue to pour in and Amazon would continue to ship them out without your input of any kind.
Manage your business at home through internet
In the past businesses would hire employees and expensive warehouses space to ship out their products which led to waste of precious resources. But with FBA you can simply work from home and let Amazon take care of all your troubles.
Amazon provides the offer of shipping imported products directly to fulfillment centers of Amazon.
This type of business model has tremendous opportunities for growth and success.
Secret Advantage of Successful FBA Sellers
One “secret” advantage of successful Amazon FBA sellers is to drive down their operation al expenses. In driving downing operational expenses they can compete better on price by offering lower sales price and still be able to obtain a reasonable profit. When you are ready to order your items in larger bulk you will definitely want to consider shipping your goods by SEA instead of by AIR from your overseas sourced suppliers. Simply put shipping by SEA is bar far the cheapest way to send you goods into FBA from overseas. Now there are certainly pros and cons in choosing between sea versus air shipping such as costs, capacity, reliability and speed but the savvy FBA seller with proper time and risk planning will always win in terms of cost to ship there goods. These shipping costs will translate into there bottom line profits and allow them to price their sale items more competitively.
See this chart comparing four modes of shipping. Although this data is 2002, the costs between the four modes likely remain the same for more recent data. In our case of shipping products from overseas only the water and air chart applies. And as you can see the cost for water transport mode trounces the air mode.1,2
Sea shipping can be logistically more challenging, but don’t worry. You can work with Forest Shipping and they will help you with a smooth process in getting your first sea shipment schedule for direct FBA delivery.
Over time, this blog will aim to introduce other “secrets” and techniques other successful FBA sellers use when gaining a cost competitive advantage in lowering their overall cost of goods. Feel free to reach out to Forest Shipping for any questions on how to save on your cost of goods sold with FBA shipping.
Footnotes:
[1. The total costs for shipping freight in 2002 are provided in a Department of Transportation study.][http://www.ops.fhwa.dot.gov/freight/freight_analysis/econ_methods/lcdp_rep/index.htm#Toc112735358]
[2. The total ton miles shipped for each of the four modes are provided in another Department of Transportation study. (PDF)][http://www.rita.dot.gov/bts/publications/commodity_flow_survey/2002/united_states/pdf/entire.pdf]
