Amazon FBA Program
The Amazon FBA program provides a world of opportunity for third-party sellers. You can get your products in front of millions of buyers while Amazon handles the lion’s share of the logistics. Products sold via the FBA program are eligible for Prime shipping, which shoppers look to for fast, free delivery.
The unique opportunity offered by Amazon FBA makes scaling your business a reality from day one. However, like any business decision, using Amazon FBA is not free of challenges. There’s plenty to learn, whether you’re a new seller or an FBA pro. This Amazon FBA guide offers a deep dive into the program, from how it works to preparing inbound shipments and beyond.
What is Amazon FBA?
FBA stands for Fulfillment by Amazon. This program allows third-party sellers to send items to Amazon fulfillment centers to be picked, packed, and shipped to buyers by Amazon.
The FBA program launched in September 2006, allowing merchants to sell products on the world’s largest online marketplace while leveraging Amazon’s fulfillment centers and employees. Amazon FBA enables merchants to scale more quickly thanks to reliable service and predictable costs.
Amazon’s philosophy is deceptively simple: delight buyers with competitive prices and fast order fulfillment. Satisfied buyers continue to shop on Amazon, leading to more sales, which makes the marketplace more attractive to third-party sellers, who in turn pay commissions to Amazon. That’s the Amazon flywheel in a nutshell. It has created a sustainable selling model that has allowed many individuals to gain financial freedom while exploring their entrepreneurial side.
Products enrolled in Amazon FBA are eligible for Amazon Prime shipping. Amazon continues to innovate and refine processes for streamlined and quick order delivery. To get an idea of how orders can be fulfilled in 48 hours or less (and, in some cases, within an hour), check out this list of Amazon fulfillment centers in the US. With multiple warehouses, Amazon can quickly get orders of popular items to just about anywhere in the US.
Today, upwards of 59% of sales on the global Amazon marketplace can be attributed to third-party sellers. There are over 2 million third-party sellers active across all Amazon marketplaces.
Who Sells on Amazon FBA?
Of the millions of third-party sellers on the Amazon marketplace, many are established brands that enjoy the volume of sales they get from Amazon. Others are resellers, who work with manufacturers or distributors to sell products on the marketplace. Some of these resellers work with manufacturers to private label certain products, which gives those sellers a competitive advantage on Amazon because they are the only seller of that particular ASIN (Amazon Standard Identification Number). Another type of seller is the retail or online arbitrage seller, who sets up an Amazon FBA store and sends all sorts of different products into fulfillment centers, based on the availability and profitability of the item.
