The Ultimate Guide to Selling on Amazon FBA in 2023

The Satisfaction by Amazon (FBA) administration sent off in 2006 to smooth out processes that would help both Amazon dealers and clients. Since then, it has blossomed into a feature that is wildly popular because it gives users access to a comprehensive fulfillment network and helps alleviate issues with fulfillment and customer service.

The goal was to incorporate Amazon’s existing fulfillment model into the processes used by third-party sellers in order to take advantage of this infrastructure and, in the end, help Amazon customers. Not only would sellers benefit greatly from offering this service, but also their customers would benefit from faster, more dependable shipping and service from this market leader.

You’ll learn everything you need to know about Amazon FBA and how to use it to boost your sales and brand recognition while selling on Amazon in this comprehensive guide.

The When and Why of Amazon FBA

When you don’t have your own logistics team, a fleet of delivery trucks, or a warehouse where you can store your products, Amazon FBA is your go-to option. If you’re already working full-time in sales and marketing, how much more so if you also manage the business’s order fulfillment?

Because of this, Amazon FBA is a godsend for both new and seasoned sellers alike. But when and why did Amazon FBA begin?

An “all-you-can-eat express shipping” program, also known as Amazon Prime, was launched by Amazon in February 2005. The stated loyalty program’s primary objective is to increase sales and customer acquisition.

Because who wouldn’t want to receive their orders in less than two days, online shoppers took the bait. The standard transportation generally requires around 4-5 days. In addition, you only need to pay a hefty one-time fee for a year, which was initially $79. This is more economical than paying the small fee of $9.48 at the time for each order to receive two-day delivery.

Amazon is aware that continuing to bear the costs of shipping and logistics would be detrimental to their bottom line as more online shoppers sign up for Prime. As a result, Amazon FBA was established in 2006.

How Amazon FBA Works

The operation of Amazon FBA is as follows: After you sell, Amazon ships. Your deliveries will be handled by eCommerce shipping and logistics, but this comes at a cost. The Amazon FBA lifecycle, from start to finish, can help you understand it better:

• Inventory is sent by the seller to Amazon’s fulfillment centers.
• When the inventory reaches the fulfillment center, Amazon sorts it and stores it.
• The client places an order for the seller’s product through the market.
• The order is picked, packed, and shipped to the customer by Amazon.
• Amazon will take care of customer support.
• Amazon will also take care of the customer’s return of the item.

But I can also use this service from third-party logistics providers or courier companies!” We wouldn’t contend with you on that, aside from it doesn’t have advantages like client support and thing bring highlights back. But what else does Amazon FBA offer?

6 Benefits of Amazon FBA program

According to a study, more than half of third-party sellers use the Amazon FBA program. Two-thirds of the top 10,000 Amazon sellers simultaneously outsource order fulfillment to Amazon. Many people are using it because it shows how valuable and useful this service is. The following are the benefits of selling on Amazon FBA:

Top warehouse and logistics services

High-quality fulfillment centers, truck trailers, air freight, bicycle couriers, merchant vessels, and air drones are all available to you when you join FBA.

Tens of thousands of full-time associates collaborate with robots in Amazon’s one of the world’s most advanced fulfillment networks.

You can take advantage of Amazon’s facilities and workforce, as well as its decades of experience and expertise, which are recognized worldwide.

Fast and free shipping

Shipping that is quick and free is very popular with online shoppers.

Amazon was aware of this. As a result, they included express shipping as one of the program’s features when they launched Prime. Random fact: Same-day delivery is made possible by Amazon. Prime members can take advantage of Prime Now’s 2-Hour Delivery, One-Day Shipping, and Two-Day Shipping in addition to same-day delivery. This was made possible by strategically opening fulfillment centers all over the world and employing tens of thousands of FBA employees, particularly during sales and holidays.

In addition, here’s the scoop: Business Insider reports that Amazon intends to turn department store spaces that were previously occupied by Sears and JCPenney into fulfillment centers. When it comes to meeting the needs of customers who shop online, that is how aggressive Amazon is. In case you haven’t heard, the COVID-19 pandemic last year caused both stores to declare bankruptcy.

Prime-eligibility guaranteed

Amazon Prime members who are guaranteed to be eligible rely heavily on the marketplace’s quick and free delivery service. These people are willing to pay a little more for premium shipping and other benefits that are only available to Prime members.

Statista says that Prime members spend an average of $1400 per year. This is a significant distinction from non-Prime members, who only pay $600 annually. In addition, 81% of Prime members are aged 18 to 34, a demographic with greater purchasing power in today’s market.

Therefore, if you want to sell your goods to this group of generous individuals, you should join Amazon FBA to receive instant passes and qualify for Prime shipping right away.

Have a chance to win the buy box 

This benefit makes being an Amazon FBA seller even more appealing. On the product detail page, the most sought-after space is the Buy Box. Customers can quickly add items to their shopping carts in this section. 

Each vender needs the Purchase Box as it changes over into deals. Because Amazon gives them priority, if you are eligible for Prime, you can win the Buy Box.

Get the best shipping rates 

Amazon has negotiated with major carriers like UPS, USPS, FedEx, and DHL Express. These companies are known as Amazon partnered carriers. These shipping companies frequently provide Amazon with significantly reduced shipping rates.

Because Amazon handles the shipping for you, you don’t have to bargain just to save money on shipping costs if you sell FBA. Furthermore, reputable courier companies handle your cargo.

Effortless scalability

Scalability without effort, but wait, there’s more! To rapidly expand your business, you do not need to create or contemplate a business plan. You can “add-on” the following Amazon FBA programs to your existing business strategy:

• FBA Subscribe & Save = you can offer discounts on qualified FBA products to repeat customers.
• FBA Small & Light = small, lightweight, and cheap FBA inventory can get lower fulfillment fees.
• FBA Export = you can cross borders and sell your products to more than 100 countries at no additional cost.
• FBA Pan-EU = let Amazon distribute and sell your products across European marketplaces at no extra charge with faster shipping time.
• Multi-Channel Fulfillment = Amazon allows you to offer your products to third-party eCommerce sites or your site. Plus, they will pick, pack, and ship to your customers.

Amazon FBA Fees Explained 

However, you must pay for the aforementioned advantages. While it is true that Amazon does not charge a fee when an order is shipped to a customer, you need to be aware of the following Amazon FBA fees in order to effectively manage your spending:

Seller account subscription fee 

There are two options for seller plans:

•  Individual plan – has no monthly fees and costs CAD $1.49 per item. Sellers who only intend to sell fewer than 20 items per month should use it.
• Professional plan – which costs $29.99 Canadian dollars per month, is ideal for sellers who plan to sell more than 20 items per month. It also comes with additional advantages, such as the ability to create bulk listings using APIs, sell in restricted categories, use advanced reporting features, and promote your products using Amazon advertising tools, among other things.

You are able to use Amazon FBA with either plan.

Referral fees

Fees for referrals Amazon receives a commission for each product sold in their market. It might be a flat fee of 15 percent or less. After the sale has been made, the referral fees are paid. The current referral fee table is as follows:

FBA fees

The storage, packaging, and handling of your merchandise are all included in the Amazon FBA costs, which are actually four separate payments bundled into one. The calculation takes into account the item’s categorization, weight, and size.

Storage fees

You have to keep in mind that you have to deal with two types of storage fees:

Monthly storage fee

Amazon charges you for any space your inventory takes up in their fulfillment centers before the sale.

Long-term storage fee

If your inventory stays at fulfillment centers for more than 365 days, Amazon will charge you a fee of CAD $150 per cubic meter.

Removal order fees

Avoid long-term storage fee by requesting a removal order:

Returns processing fees

Customers can return items to Amazon for free, with the seller taking care of the costs. It is comparable to the product’s total fulfillment fee.

Additional FBA fees 

If your inventory is not properly labeled or prepared, you may be charged these fees. For the FBA label service, FBA prep service, manual processing service, and FBA repackaging service, Amazon charges you a fee per item.

The FBA New Selection Program: What is It?

Did you become overwhelmed by the costs you have to pay? However, if you want to sell through Amazon FBA, you might want to enroll in the FBA New Selection program.

On eligible new-to-FBA ASINs, this program provides free removals, free returns processing, and free monthly storage. Additionally, participants can receive a $100 discount on Amazon-affiliated carrier shipping.

More than 60,000 sellers are currently enrolled. This year, they have added the following benefits:

Eligibility for oversize items 

Beginning on April 1, 2021, eligible oversize items (up to 30 units per parent ASIN) will be eligible for free removals and storage for up to 180 days.

Sponsored advertising 

The online retailer will begin offering promotional credits for sponsored ads on April 1, 2021.

Limit on ASINs 

Amazon will allow an unlimited number of eligible, new-to-FBA parent ASINs beginning on April 1, 2021. Thus, the 500-ASIN limit is removed.

This program seems promising, but how do you sign up for it?

To begin, you must determine whether you qualify. Only professional sellers are permitted by Amazon. Additionally, you must keep your IPI score at or above 400. Members can also join if they are new professional sellers or have not yet received an IPI score. However, if your IPI score falls below 400, you will be dropped from the program immediately.

ASINs, in addition to seller eligibility, are evaluated. Small standard and large standard-size items are available for enrollment. In addition, check to see that the parent ASINs have not been enrolled in the past 180 days. Keep in mind that media categories and used items are not eligible. Lastly, only jewelry categories; Apparel; Luggage; Accessories, Handbags, and Shoes; or Watches qualify for complimentary return processing.

Keep in mind that Amazon must still approve your enrollment. 

How to Become an Amazon FBA Seller

This is the part of How to Become an Amazon FBA Seller that you have been waiting for. How-to instructions for becoming an Amazon FBA seller:

Step 1: Choose a niche 

Because FBA products have different requirements and restrictions than non-FBA products, choosing a niche requires careful consideration. Any one of the following consequences will occur if you do not comply:

• Return or disposal of your inventory upon its arrival at the fulfillment center.
• Amazon will block your future shipments.
• You will be charged for noncompliance or preparation.
• Possible deactivation of your selling account.

You can prevent this by avoiding the following niche or categories:

• Vehicle tires
• Alcoholic beverages (including non-alcoholic beer)
• Products with unauthorized marketing materials, such as pamphlets, price tags, or other non-Amazon stickers
• Gift cards, gift certificates, and other stored-value instruments
• Loose packaged batteries
• Meltable, heat-sensitive inventory (during warmer months).
• Products requiring AC, freezing, or refrigeration.
• Perishable or expired products.
• Items with price tags, marketing paraphernalia, or other non-Amazon stickers.
• Damaged or defective units
• Products with labels that were not correctly registered with Amazon before shipment or that do not match the registered product.
• Products that have been illegally replicated, reproduced, or manufactured.
• Products that do not comply with any agreement between Amazon and the seller.
• Products that Amazon otherwise determines are unsuitable.
• Products that require preparation but that have not been prepared according to FBA packaging and prep requirements.

That’s quite a long list! However, it would be better to follow Amazon’s rules to avoid unfortunate consequences.

Step 2: Find products to sell

Now that you know which niche you should avoid, next is searching for a product to sell within your chosen niche. Let us share with you some tips on how to find one:

• Choose small, lightweight products that only need minimum handling and shipping costs since Amazon includes the size and weight in the calculation.
• Source generic products so you can rebrand them easily.
• The product doesn’t need Amazon’s approval before selling it to save yourself from complicated paperwork and time-consuming process.
• You can sell the product all year-round, and it isn’t just seasonal.
• The product must not have a trademark or patent yet, so you can own the rights to sell it exclusively under your brand.
• It has a high-demand, marketable, and low competition.

Product research is an arduous process, but it is worth it in the end because you can avoid any hassles in terms of packaging, and you will have confidence in the product you have chosen to sell.

Step 3: Look for a supplier or manufacturer

The supplier you will choose can make or break your Amazon FBA business. Keep in mind that this is where you will be getting the products that you will sell in the marketplace. How will you know that you’ve spotted the “right” supplier? The supplier must have the following characteristics:

• They can manufacture a product in a consistent manner.
• They welcome third-party inspection to ensure the quality of the product.
• They abide by the rules and regulations of Amazon and local authorities.
• They are willing to communicate with you when needed.
• The supplier is an ethical and socially-compliant company.

Moreover, the supplier or manufacturer doesn’t mind providing sample products for every reproduction to check it for quality assurance. After you tick all the boxes, here are different ways to find a supplier:

• Subscribing and reading industry trade publications.
• Visiting trade shows.
• Mingling with business owners in an industry association.
• Registering in online wholesale directories like Worldwide Brands, SaleHoo, The Wholesaler, Price Master, Liquidation, Big Lots, The Wholesale Forums, and Tuesday Morning.
• Joining Facebook groups targeting suppliers of your chosen niche.
• Visiting online B2B wholesale websites such as DHgate, Amazon Business, Alibaba, Global Sources, and eWorldTrade.

Step 4: Establish your brand

You have to give a face or identity to your product. Otherwise, it won’t stand out in the overpopulated Amazon marketplace. A well-researched and developed brand is a valuable marketing weapon you could have.

Brand names 

You need to think of two. Why are you requiring two? One is for the name of your seller, and another is for the name of your product’s brand.

Think of a distinctive and memorable company name for your seller name if your objective is to expand into additional niches. On the other hand, you have to give each product you sell a brand name.

Brand Design

Designing a brand logo and design for your business and products is the next step. You need a logo and design that looks professional, so better to outsource this task if you’re not artistic or know nothing about graphics design.

Because there is a high probability that you will come across a seller whose design is identical to yours, it is not recommended that you use graphics or pictures from stock photo websites.

Step 5: Sign up for an FBA seller account

Before you hit the “Start Selling” button on Amazon Canada’s page, you must have the following first:

• Tax information
• Government ID
• Active credit card
• Business email address
• Business phone number
• Bank account number

The next step is to select an Amazon seller plan that is appropriate for your business strategies and goals. The Individual plan or the Professional plan are the options.

Step 6: Create product listings

Product listings, also known as product detail pages, are your “showroom” in the marketplace. Try to describe your product on this page as if a customer is actually looking at it.

Make sure the title of the product is clear enough for people buying it online. Transfer high-goal item pictures shot in various points so the clients will have visual lucidity on how your item looks.

Bullet point the advantages of your product and elaborate on them in the description section. Keep in mind that you must meet the requirements of your potential customers as well as Amazon’s algorithm, the A10. Perform Amazon SEO (search engine optimization) thoroughly to target the appropriate search terms or keywords.

Step 7: Prepare your products for packaging

Are you still with us? Great! This guide’s third and final step is now complete. Because you will be packing numerous items for shipping, this one necessitates additional staffing.

When it comes to packaging and preparing inventory, Amazon is very careful. On their website, they outline the steps you must take to prepare your products before shipping them to Amazon’s warehouses.

Case-packed products must not weigh more than 50 pounds or be longer than 25 inches on any side. Visit Amazon Seller Central for more details, and be sure to read the Amazon FBA packaging and preparation requirements thoroughly.

Step 8: Ship your inventory

Part 1: Select products to ship:

1. Register your seller account for FBA. 
2. On your Seller Central account, go to Inventory > Manage Inventory.
3. Select the products you would like to ship.
4. In the Actions drop-down menu, choose to Send/Replenish Inventory.
5. Set your Ship From Address, the location where the inventory will come from. 
6. Decide what will be the Packing Type of your inventory, either individual products or case-packed products.
7. Hit Continue to create a shipping plan.

Part 2: Shipment creation workflow

1. On the Set Quantity page, fill in the Unit per Case and Number of Cases fields per product. Then click Continue.
2. The next page is Prepare Products, where you choose who will prepare the inventory by selecting in the Who preps pull-down list.
3. On the Label Products page, set the number of labels you need in the # of labels to print columns. Then hit the Print labels for this page to start printing.
4. You will be directed to the Review Shipments page to check the details of your shipment plan.
5. If everything is correct and complete, you may now Approve the shipment plan. The page will change to View Shipments after you approve it.
6. Moving on to the next page, the Prepare Shipment, you may now choose your final delivery method.
7. Choose your preferred Shipping method and Shipping carrier under the Shipping service section of the Prepare Shipment page.
8. Double-check the contact information before proceeding.
9. Click Calculate to know how much you will be paying, and you may approve it by selecting the I agree to the terms and conditions.
10. Click the Accept charges button to proceed to the last step.
11. Select the Print box labels. This action will print the FBA shipping labels that you will put on top of each box and pallet that you ship.

Your inventory is currently on its way to Amazon’s fulfillment centers, and the product listings are now complete. What follows? introducing your new product to Amazon’s customers and marketplace.

Step 9: Launch your product 

Product launches are both exciting and nerve-wracking, especially when you’re about to unveil a new product. Don’t stress; You’re ours! To help you launch your product with a bang, we’ve created a five-step guide that’s simple to follow.

1. Optimize product detail page

Before pressing the “launch” button to ensure that your product listings contain every necessary information for customers. Make sure your product stands out from the background in high-quality photographs. When revising the description and bullet points, adhere to the writing style known as “show don’t tell.”

2. Create a buzz

Use the power of off-Amazon advertising to create buzz. Write helpful blog posts that explain how your product can benefit other people. Create accounts on a variety of social media platforms and use catchy hashtags and intriguing posts about your product to get noticed.

3. Set up PPC campaigns

Try not to underestimate the significance of the Amazon PPC crusade. Recall that you want to rank first your shiny new item according to Amazon A10’s principles. PPC campaigns, on the other hand, cost money, so you need to budget for them. You can start building your brand and connecting with online shoppers at Sponsored Brands, Stores, Posts, and Amazon Live, where you can also increase live online shopping for your products.

4. Gather organic reviews

If you use “black hat” strategies like incentivizing reviews, Amazon will take down your seller account. You can try the Amazon Early Reviewer Program for $60 to get natural reviews. You can also politely request a customer to leave a review by clicking the “Request a Review” button.

5. Launch your product!

Self-explanatory, right?

5 Amazon FBA Mistakes You Must Avoid

Five Mistakes You Should Avoid Making with Amazon FBA It’s normal to make mistakes when you’re just starting out with Amazon FBA. However, it is preferable to take the initiative because errors may result in the suspension of a seller account. As an Amazon FBA seller, you should avoid the following mistakes:

Dependent on FBA alone

The coronavirus pandemic that engulfed the global supply chain last year also impacted Amazon. Amazon imposed a number of restrictions when COVID-19 spread worldwide, such as giving priority to only essential items. Third-party sellers were forced to rush to get their shipments to the fulfillment centers as a result of this action.

Tip: Always have a backup strategy in the form of switching to a Fulfillment by Merchant (FBM) setup whenever possible. FBM is the point at which you handle the request satisfaction activities without anyone else.

Not protecting your brand 

Amazon is one of the world’s most competitive marketplaces. In order to win the majority of sales, sellers are willing to fight tooth and nail. As a result, shady individuals like hijackers and counterfeiters emerged. In order to stay ahead of the competition, they are eager to eliminate their rival sellers.

Tip: Make every effort to safeguard your brand and reputation. Get your products trademarked by enrolling in the Amazon Brand Registry.

Running out of stock

In the event that you run out of stock, you won’t be penalized. However, this will have an impact on your seller performance metrics and ranking. A listing with no inventory is also removed automatically by Amazon. Naturally, you will also miss out on potential sales.

Tip: Check your stock levels on a weekly or biweekly basis on a regular basis. In order to keep selling and earning, replenish immediately.

Not understanding Amazon’s policies

We will not gloss over this one: Reading Amazon’s rules and regulations is a daunting task. It’s no wonder sellers ignore this section. It has hundreds of pages that will make you yell, “Information overload!” However, failing to do so would jeopardize your selling privileges.

Tip: Buddy, I’m sorry, but there are no shortcuts here. You are forced to read it from top to bottom. Furthermore, take the necessary steps to adhere to the principles to try not to get restricted from the biggest web-based commercial center on The planet.

Selling on FBA gets you rich quick

No, selling on FBA won’t make you rich quickly. As an FBA seller, you can make money, but it won’t happen overnight. Many new and inexperienced sellers believe that Amazon FBA is a simple and quick way to make money. However, this is not the case, and earning your first hundred or thousand dollars on the platform will require your blood, sweat, and tears.

Tip: To be a successful Amazon seller, you need to put in a lot of effort and be dedicated. Quick fixes and magic bullets are not possible. You must put on your work gloves and get to work. There is no alternative.

Conclusion

To conclude, all it takes to gain an advantage when selling on Amazon’s vast online marketplace are four words. These must be included in your product listings:

“Fulfilled by Amazon” and “Prime” 

The first phrase guarantees customers free and prompt shipping. In addition, the latter permits you to sell your products to customers who read to buy. Enroll in Amazon FBA to quickly begin selling and expand your online shopping business if you want to kill two birds with one stone. To remain in Amazon’s good graces, all you need to do is follow the steps in this guide and be aware of the aforementioned mistakes.

Our knowledgeable consultants at HMR One are eager to assist you in getting your Amazon FBA business off the ground. Please contact us immediately by telephone or email at [email protected].