One of the most basic problems that Amazon sellers have is picking which fulfillment service to use. They can handle it themselves through the Fulfillment by Merchant (FBM) technique, also known as Merchant Fulfilled Network, or they can use Fulfillment by Amazon (FBA).
What is Fulfillment by Amazon or Amazon FBA?
Fulfillment by Amazon or FBA is a fulfillment service that sellers on Amazon may use to expand their operations and reach out to more customers. Through this method, you store your things at Amazon’s fulfillment centers, and Amazon selects, packs, and ships them, as well as assists marketing and customer care.
Sellers ship their merchandise directly to Amazon, which stores it and fulfills all purchases. Although the vendors are still in charge of the sales. As a result, if Amazon has your items in stock, you won’t have to worry about anything else. Amazon FBA merchants can store as much as they want in their warehouses. Amazon operates warehouses all around the world.
Returns and refunds are handled by FBA as part of the fulfillment process, and FBA products receive the Prime privilege, making them eligible for Prime free delivery. Sellers that want to offer quick fulfillment, save time, and expand their brands should consider Amazon FBA. To utilize this fulfillment service, you must pay Amazon FBA costs.
When selling on Amazon FBA, bear in mind that the amount of profit you make is determined by the Amazon fulfillment cost. As a result, before taking the plunge, it’s critical to grasp what Amazon’s FBA fee includes.
What is FBA Inventory Placement Service?
The default distribution setting when creating a selling plan on Amazon Seller Central is Distributed Inventory Program. This implies that your package may be assigned to various Fulfilled by Amazon (FBA) centers when you establish a delivery plan.
While this technique is time consuming, it helps businesses to meet their shipment deadlines and provide consistent service. Shipping the same items to many fulfillment centers, on the other hand, may be expensive, especially when Amazon needs merchants to deliver only a few units to multiple or far-flung fulfillment centers.
The solution to this is found in the other alternative – Amazon’s FBA Inventory Placement Service. Because Amazon will deliver all quantities of a single Merchant SKU to the same fulfillment site, the Inventory Placement Service benefits merchants. In addition, most standard-sized products will be included in the same shipment. This implies that your shipment containing the same products will be sent to the same warehouse. Infact, even if you’re selling a camera bag, a lens cleaner and a photo frame – all of it will be reaching the same warehouse.
Amazon’s Inventory Placement Service has a lot of advantages. There is just one dispatch destination. This reduces transportation costs dramatically and gives the seller greater flexibility because they are no longer responsible for sending their goods to several locations, maybe across the country.
The only disadvantage to this is that there is a per-unit service price.
How much is the FBA Inventory Placement Service Fee?
Usually, this depends on the weight of the product. Inventory placement service rates for standard-size products run from $0.30 to $0.40 per unit, while charges for big items range from $1.30 to $1.50. If applicable, the taping service cost will rise from $0.20 to $0.60 for standard-size products and $0.40 to $1.20 for larger items.
For a detailed overview, visit the Amazon Sellercentral Website. Keep in mind that the costs are subject to change, so it’s a good idea to check them on Amazon from time to time.
What should you know before opting for Amazon’s FBA Inventory Placement Service?
Although Amazon’s Inventory Placement Service is one of the quick and efficient ways to go about for a seller, there are some things you should be aware of before opting for it:
- Inventory Placement Service is not available for all goods. Apparel, jewelry, shoes, and media are not included in this category. Oversize products, things that need Amazon prep or labeling, and dangerous chemicals are not tracked with a manufacturer barcode.
- When you use FBA Inventory Placement Service, your products are typically sent to a distribution center rather than a fulfillment center, which means they must then move your shipment to various locations, which can result in a delay of up to 10 days between when your products arrive and when they are actually available to be sent to customers.
- Be careful that there are no assurances with Amazon’s Inventory Placement Service, and it’s likely that if you try to sell any of these things through this service, you’ll be charged the cost yet still have to ship to several locations.
- Using an Inventory Placement Service makes the most sense. This will be the case for non-oversized products with large margins. However, because there are so many variables, this service will only save you money in a select few scenarios. Because of their connections to lower shipping rates, working with a dependable and economical transportation management provider can actually save you the same amount of money or more with Distributed Inventory.
- Always weigh the two choices before deciding on a shipping method. Check how many warehouses Amazon intends to utilize with the Distributed Inventory Service, then look at Inventory Placement to see if all items will be shipped to one place. Get an approximate sense of how much each box will cost to ship based on previous shipments and decide which choice is preferable at that time.
Selling on Amazon FBA has a lot of advantages, like quick order fulfillment, low shipping costs, and excellent customer care, to name a few. As a consequence, selling on Amazon FBA is worthwhile, but you must select profitable services like the Inventory Placement Service, and develop your brand in order to generate the most revenue.