What is FBA (Fulfillment By Amazon)?
Amazon offers their own fulfillment program, Fulfillment by Amazon (FBA) to guarantee sellers fast, accurate, and affordable shipping.
To keep it simple, FBA works like this: you sell it, then Amazon ships it.
The detailed process of Amazon’s renowned fulfillment process is:
- You send your items to Amazon to be stored in their fulfillment centers.
- After Amazon receives your inventory, you can monitor it through their tracking system.
- The customer orders your items from Amazon.
- Amazon picks and packs the sold items.
- Amazon ships your items by method chosen by customer and provides them tracking information.
- They provide customer service and return management for items.
Amazon fulfillment centers
Today we will be focusing on these warehouses, or centers as Amazon call them, to see exactly how they work. They can be a great example of how a warehouse should work. This is warehouse management at the highest level.
Across the world, Amazon has more than 175 of these fulfillment centers and over 14 million square meters of space. This is where the products are picked, packed and shipped to customers.
Here’s a quick glance at the journey that these products take within the Amazon Center:
The products enter the warehouse
At the inbound dock, products get taken off trailers by forklift or manually built into pallets. Freight is separated between that coming from another Amazon facility and directly from a vendor, such as a seller using Fulfillment by Amazon (FBA).
How your products are stowed in the warehouse
Instead of storing items as a retail store would—TVs and other electronics on one aisle, books on another—all of the inventory at Amazon fulfillment centers is stowed randomly. Even though this method might seem counterintuitive, it makes it easier for associates to quickly pick and pack a wide variety of products.
Also, robots ferry pods of products to associates at stow stations based on product size and barcodes. The stower looks for suitable space for each item and stows it into the pod, making it available for purchase on Amazon.com.
Pickers are like personal shoppers, picking from hundreds of items a day to fulfill customer orders. When the order comes in, a robot brings pods full of items to associates working at pick stations. The picker reads the screen, retrieves the correct item from the bin, and places it into a yellow plastic box called a tote.
These robots are very smart, but they aren’t competing for jobs—they’re creating them at Amazon fulfillment centers. Transporting thousands of pods per floor with millions of products stowed inside, the robots enable more inventory to pass through a fulfillment center, which means more associates are needed for handling that inventory. Since 2013, Amazon has added thousands of robots to its fulfillment centers, which translates to over 300.000 new jobs as well.
Different teams along the way ensure the fulfillment process runs as smoothly as possible. The Inventory Control and Quality Assurance team makes sure an item’s physical location actually matches what’s in the computer. The robots need support too, so Amnesty Floor Monitors (AFMs) make sure the floors are clear and reset the units when needed. Many other checks along the way verify the right product goes to the right place.
Packing the orders
Firstly, items that belong to different shipments are organized and scanned. Then they’re sent to the packing station, where the computer system recommends box sizes and a machine measures out the exact amount of tape needed. Many items are shipped in their original boxes, and Amazon works with vendors to reduce packaging. At this stage, there’s no shipping label—machines handle that down the line, protecting the customer’s privacy and keeping the process efficient.
Shipping the orders
Packed envelopes and boxes then go underneath the SLAM (Scan, Label, Apply, Manifest) machines, which deposit shipping labels with astonishing speed. For quality control, the package is weighed to make sure the contents match the order. A shipping sorter reads package labels to determine where and how fast customer orders should be sent, serving as a kind of traffic conductor.
Being almost ready to leave the fulfillment center, the packages are nudged from the conveyor down slides into the correct trailer based on shipping method, speed of delivery, and location. Each door at the shipping dock accommodates trailers from a variety of different carriers and locations.
Shortly after, the package arrives to your doorstep. This is how Amazon Fulfillment Centers work in a nutshell.
What if you’re an eCommerce seller? Is FBA right for you?
If you’re an Amazon seller who doesn’t have the room for storage, inventory management, and customer service, you may find that you enjoy using FBA. However, there are certain types of businesses that tend to do better with FBA than others.
Using Fulfillment by Amazon can be a great way to make money and learn best practices for navigating a fast-changing e-commerce marketplace. Pay close attention to profit margins to determine if using FBA is a smart move or not for a particular group of products.
These fees may be more expensive compared to fulfilling the orders yourself, as you’re primarily paying for convenience. By using FBA, your customers can get their orders within two days using Amazon Prime shipping. Buyers also have an idea of what to expect when it comes to customer service because they’re only dealing directly with Amazon.
To sum up
Fulfillment by Amazon is not necessarily just about fulfillment. It’s about leveraging Amazon’s brand and the Amazon Prime loyalty program to boost your exposure and sales on the Amazon marketplace. FBA offers nearly unmatched fulfillment rates and seamless order processing for Amazon sales. Simply put, selling on Amazon using FBA may help increase your sales and bottom line.