Amazon FBA Guide 2022
Amazon, being the largest e-commerce platform, is continually growing. Amazon has been making strides over the past few years to be the one-stop-shop for building a brand and converting customers with an impressive success rate to engage with customers at all stages of the funnel and is currently working with more than 9.7 million sellers worldwide, of which 1.9 million register sales and have been actively selling on the marketplace. In addition, sales for independent businesses selling on Amazon grew exponentially, offering new opportunities to earn money online.
Amazon’s net sales from third-party sellers grew 57% year-over-year in 2020, heavily contributing to Amazon’s $386 billion annual revenue. The year 2020 is the most profitable for Amazon Sellers as their profits increased by 62% and the saga continues in the year 2021 with 85% of Amazon sellers registered profits
Amazon deals with every product, and when it comes to the figures, then it has sold over 75 million products in 2021. Amazon has been working for years to provide a high-quality experience not only to its customers but also to sellers. The average third-party sale of Amazon was around $80.44 billion in 2020.
Although many sellers in the USA are looking forward to joining hands with Amazon – the great e-commerce platform, they might not be well-equipped with the logistics and supply chain facilities, leading to the non-delivery of products to the customers on time. These include having their own logistics team, a fleet of trucks for delivering goods, and a warehouse to store their products.
It is where the Amazon FBA program (Fulfillment By Amazon) comes into the picture. Here, we will walk you through Amazon FBA Guide 2022, helping you to know what Amazon FBA is and how you can use it for maximum benefits.
Both the Amazon sellers and customers will be getting benefited from The Fulfillment by Amazon (FBA), which was launched in 2006 as it is working towards streamlining the processes. It is steadily introducing many more successful features which are immensely useful from then onwards as that will surely help to mitigate fulfillment and customer service challenges while providing access to a comprehensive fulfillment nexus at the same time.
It’s a good idea if Amazon’s existing fulfillment model is integrated into third-party seller processes as it will reflect as a benefit of this infrastructure, and this will ultimately benefit customers of Amazon. When this service was first introduced, sellers are bestowed with many benefits and customers would be receiving faster, more reliable shipping and service from Amazon.
Table of Contents
- What is meant by FBA/Fulfillment By Amazon?
- What are the benefits of the Amazon FBA Program?
- What does Amazon FBA New Selection Program offer?
- What is the procedure to become an Amazon FBA Seller?
- What are the new Fee changes for 2022 for FBA?
What Is Amazon FBA?
FBA (Fulfillment by Amazon) is a program that was originally designed to streamline the processes providing benefits to both Amazon sellers and customers. It is basically a service offered by Amazon to the sellers or businesses, especially small-business owners helping them to take benefit of the extensive logistics and distribution system of Amazon.
Since 2006, millions of small business owners have been using the Amazon FBA program to sell their products all over the world without investing in transportation and distribution systems.
Sellers registered under the Fulfillment by Amazon program can offer their products for sale on this platform, and it is Amazon that will fulfill the inventory.
Sellers can ship their products directly to the fulfillment center of Amazon. It is a warehouse where all the products are stored. Whenever any customer makes an order with Amazon, it will be the responsibility of Amazon’s team to pick, pack, and ship the products to the desired destination.
Now with Amazon FBA, sellers need not worry about storing or shipping their products. All they need to do is monitor their inventory and focus on framing strategies for marketing and optimizing their listings.
What are the benefits of Amazon FBA Programme?
It is a known fact that the Amazon FBA program is utilized by more than half of third-party sellers, and about two-thirds of the top 10,000 sellers registered under the FBA program have entrusted their order fulfillment operations to this platform. Following are the key benefits accruing to you if you become an Amazon FBA seller:
- Premium logistics and warehousing facilities
- Quick and free shipping of products
- Greater credibility and conversions for the brands of sellers
- Effortless and quick scalability
Premium logistics and warehousing facilities
Once the seller is registered under Amazon FBA, she can access the top-notch fulfillment centers and different modes of shipment (fleet of trucks, air freight, bicycle couriers, air drones, and merchant’s vessels). Amazon is well-equipped with the most advanced fulfillment networks all over the globe, where more than tens of thousands of candidates, along with robots, work on a full-time basis.
Quick and free shipping of products
It is a known fact that online shoppers live for fast and free shipping. And it is Amazon who realized it first and thus, facilitated quick and free shipping of the products listed on the FBA program. Apart from same-day delivery, the subscribers of Prime can also benefit from Prime Now 2-Hour Delivery, One-Day and Two-Day Shipping.
Greater credibility and conversions for the brands of sellers
Now that Amazon is dealing with more than three hundred million active users, setting up the businesses under the FBA program will allow the sellers to grow their businesses faster. When online shoppers shop for the products from your Amazon store, they will realize that Amazon backs your products, and thus, it will build trust between both parties.
Effortless and quick scalability
Now, sellers do not need to invest their funds in capital or staffing to grow their businesses. All they need to do is register under the FBA program and access the wide array of services that are designed to help them scale their businesses. Here are the most prominent services included in Amazon FBA:
- Multi-channel Fulfillment
- FBA Small and Light
- FBA export
Multi-channel Fulfillment: This specific service allows the sellers to sell their products using any other e-commerce platforms such as e-bay, Flipkart, but it will be Amazon’s responsibility to pick, pack, and ship the products.
FBA Small and Light: As Fulfillment costs on the low-valued, lightweight, and small FBA inventory under control, leading to higher profit margins for the sellers.
FBA Export: Now, sellers can take their FBA business to more than one hundred countries without paying additional charges and without having to face any complexities in exporting products.
What does Amazon FBA New Selection Program offer?
If you feel that the fee you must pay to access the Amazon FBA program is high, you should consider enrolling in the FBA New Selection Program. This program provides access to free services, including monthly storage, returns processing, and removals on eligible new-to-FBA ASINS. Also, partners in the FBA New Selection Program can get a discount of $100 on Amazon-partnered carrier shipping.
Till now, more than 60,000 sellers have enrolled themselves in this program. In Q1 2022, Amazon increased FBA fees for the fulfillment, removal, and disposal.
FBA Disposable & Removal order fee changes with effect from 2022:
The adjusted removal and disposal order fees shown below take effect on January 18, 2022.
*Special handling items include shoes, apparel, jewelry, watches, and dangerous goods.
Note: Refer to Amazon’s official website for an overview of all 2022 US selling fee-related changes.
FBA New Selection Program offers the following benefits to the sellers:
Oversize item eligibility
Amazon offers free storage (for 90 days) and free removals (for 180 days) on the eligible oversize items (up to 30 units per parent ASIN – Amazon Standard Identification Number) under this program.
Promotional credits for the sponsored advertisements can be provided.
Sponsored Ad Promotional clicks will get $200.(New FBA sellers only)
Amazon declared that it would allow an unlimited number of eligible, new-to-FBA parent ASINs under the FBA New Selection Program leading to the removal of the 500-ASIN limit.
What is the procedure to become an Amazon FBA Seller?
The steps you should follow to enroll in this program are:
- Select a niche
- Find products to sell on this platform
- Search for the product’s suppliers or manufacturers
- Establish your brand
- Sign up for an FBA seller account
- Create the product listings
- Prepare the products for packaging
- Ship the products to Amazon
- Launch and market your products
Select a niche
Now that there are different requirements and restrictions as specified for the FBA products compared to the non-FBA ones, the sellers or businesses need to choose a niche after proper research. In case you fail to comply with selecting the appropriate niche, it can result in the following:
- Return or dispose of the inventory after reaching Amazon’s fulfillment center.
- Amazon can block your future shipment.
- You must pay a fine for noncompliance.
- Amazon can also deactivate your selling account.
You must choose among multiple niches, but it is always best to choose one specific niche. The most appropriate way to select the niche is to opt for the area you want to pursue most and are enthusiastic about.
Find products to sell on this platform
Now that you have determined the niche you have to work in, it is time to search for the products you can sell within the selected niche. Here are the tips you can consider while selecting the products:
- Consider choosing the small and lightweight products requiring minimum handling and shipping charges as both sizes, and weight of the products are evaluated while calculating the handling and shipping charges.
- Opt for generic products that can be easily rebranded.
- Do not go for seasonal products. Choose the ones you can sell all year-round.
- The products can get a patent at a later stage so that you can easily own their rights.
Search for the product’s suppliers or manufacturers
Once you have selected the niche and products you are going to sell on Amazon; you must look for the suppliers or manufacturers that can provide you with qualitative products. It is necessary to look for these characteristics in suppliers or manufacturers:
- The manufacturer must have an efficient production system so that there is a consistent manufacturing process.
- The suppliers or manufacturers you are going to choose must follow the rules and regulations as specified by Amazon.
- The suppliers must welcome third-party inspection to make sure that the products are qualitative.
After you select the product manufacturers, evaluate the products. Ask for the samples so that the quality of the products meets the specifications.
Establish your brand
Products you are going to sell on Amazon need an identity or face. Therefore, your next goal should be to produce a recognizable and identifiable brand. Here are steps to create a unique brand:
- Name the brand:When naming your brand, consider the future goal of your business, covering both your current as well as future business plans. The most suitable brand name for your business can be set after searching on Google for an appropriate Brand name and you can pick the most suitable one for your business.
- Create brand design:A brand logo is necessary as it will go with the images of the products and items. The brand logo chosen must be simple enough to remember. Apart from the brand logo, also pick the brand color and attractive tagline.
- Registering the brand name and logo: Once the brand name and logo are set, the next step is to get them registered.
Sign up for an FBA seller account
To sign up for an FBA seller account, you must first have an Amazon seller account and then follow the steps given below:
- Tax information
- Active credit card
- Government ID
- Business email address
- Amazon Seller Business account number
- Amazon Seller Business email address
Now you are ready to choose the right Amazon seller plan to suit the strategies and goals of your business. You can either go with an individual plan or a professional plan.
Create the product listings on Amazon
4 steps to create your product listing on Amazon:
- You must visit ‘Amazon Seller Central.’ Then click ‘Add Product’ displayed under the inventory drop-down menu.
- Select ‘Create a New Product Listing’ and select the category of products you are going to deal with.
- Next, you must fill in the necessary details, including title, description, brand, manufacturer, price, and UPC of the products (Universal Product Code).
- Finally, you can click on ‘Save and Finish’.
Prepare the products for packaging
After you create a product listing, now is the time to pack your products and ship them to Amazon’s warehouse. Remember that Amazon is very meticulous and thus, has laid down rules for the packaging of the products. You need to follow the same when packing products.
Packaging And Preparation Requirements:
Each FNSKU (Fulfilment Network Stock Keeping Unit) must be packed in a single package, such as a polybag or box. In case the final product requires the assembly of different pieces, all pieces should be packed in one box. Amazon does not accept products requiring the assembly of multiple separate pieces at their dock.
Clubbing multiple FNSKUs (Fulfilment Network Stock Keeping Unit) in a single polybag in a shipment may lead to receiving errors, if not labeled correctly. If a carton contains multiple unique FNSKUs, then ensure that the FNSKU label on each unique listing is visible.
To ensure that your products are prepped correctly, please go to the categories under ‘Packaging and Prep Requirements’ on the left-hand side.
If your ASIN is a pack of units, then ensure that only one FNSKU label is present. For example, if your ASIN is a pack of 3 bottles, then there should only be one FNSKU label (links to this ‘pack of 3’ ASIN) visible for the entire pack.
You must affix a single printed MRP label to each unit of the product and the label must have all the existing details needed for products that require MRP labels. A single combined MRP label would suffice on the outermost package in the case of combo packs.
In the case of ASINs weighing less than 10 kg, it is a good idea to tie them together (with the help of tape) and packed inside 5 plied corrugated boxes.
As with ASINs weighing more than 10 kg-dumbbells, they must be packed in 5 plied corrugated boxes & next be packed by a woven sack.
You must affix with “Heavy lift with care” label on the four sides of the box.
The seller must use any FNSKU (Fulfillment Network Stock Keeping Unit) that will correspond to one unique product, including assortments as each assortment type should have a unique FNSKU.
On the outside of each shippable unit of the product, all products must fulfill labeling with a proper scannable FNSKU (Fulfillment Network Stock Keeping Unit). The UPC, ISBN, or EAN numbers must be clearly readable by humans and should be included on the label. The product must have the Label on the exterior which should be in an easily accessible and scannable location.
Make sure that there are no Multiple Scannable Barcodes (MSB). If there are MSB, then Amazon may charge you for this defect under label issue.
For FBA or box labels, make sure that you use A4 size paper, the right printer, and ink quality to avoid rejections or delays while in-warding at the fulfillment center.
If you do not have a thermal printer that can print on A4 size papers, then use a LaserJet printer and make sure that the quality of ink keeps the barcode intact.
Sellers should use sticky sheets as the paper quality is of a high standard and impressive. If you do not have access to sticky paper, you should make sure that the FBA label is covered neatly with transparent tape so that the barcode is intact and is in good condition. Price tags, pamphlets, or other non-Amazon stickers are prohibited as they are considered unauthorized marketing materials. Amazon won’t accept pre-priced labels and such products.
Please go to Unplanned FBA Pre Services to avoid unplanned prep and package-related defects.
Safety: There should be adequate safety measures to be taken by you as you should use safety knives with covered blades when packing and distributing Amazon deliveries, like sharp objects, such as blades if accidentally left in products and cartons are liable to cause injuries to Amazon customers and Amazon Associates.
Sharp or hazardous, or damage-prone items:Sharp or hazardous, or damage-prone items: Amazon makes it a point to highlight specifications regarding certain products that need additional packing requirements. Amazon reserves the right to mention additional protective packaging throughout the fulfillment process to preserve the integrity of the product.
Products sensitive to dust, dirt, or humidity need extra protection by packing in transparent poly bags. If such a product having these attributes is delivered to the Amazon fulfillment center with insufficient or inadequate or non-compliant packaging subjected to outright refusal and must be repackaged by Amazon at the seller’s expense and are likely to be subjected to non-compliance fees.
Ship the products to Amazon
After packing, next, it is time to ship your products, and for this, you need to create a shipping plan, print the shipment ID labels as specified by Amazon, and ship the products to Amazon’s fulfillment centers. It is Amazon that determines the warehouse where your products should be shipped.
Launch and market your products
Lastly, you need to produce an effective marketing plan to launch your products in the market. Here are the key steps that will help you launch your items with a bang.:
- Optimize your product detail page
- Create a buzz using off-Amazon advertising.
- Set up Amazon PPC campaigns.
- Try to collect organic reviews
- Launch your products on Amazon.
What are the New Fee Changes for 2022 for FBA?
On June 18, 2022, Amazon FBA fee were restructured across all categories of products:
- Up to 7.5% increase for small standard size items
- Up to 2.8% increase for small oversize items
- 12.1% & 7.8% increase for medium & large oversize items
- Approx. 10% increase for apparel items
Although some of the fulfillment fee increases may seem small, these changes could put some sellers in tough positions and at risk of a decline in sales, especially if you’re already dealing with thin margins.
Recent Storage Fee changes by Amazon for a month
Effective from February 1st, 2022, Amazon is contemplating increasing off-peak monthly inventory storage fees and it will be applicable from January to September onwards. Amazon Storage Fee will be set as $0.08 per cubic foot for standard-size products, whereas $0.05 per cubic foot for oversize products as they are revised during 2022.
In case you do not have a proper distribution system, do not worry. Amazon is here to help you out. This renowned online seller provides a well-established distribution and supply chain system and other benefits under the Amazon FBA program. All you need is to know about Amazon FBA Guide 2022 so that you can be aware of the importance of having these four words on your products- “Fulfilled by Amazon” and “Prime.”