Fulfillment by Amazon (FBA) is an incredible tool for small to medium-sized merchants and e-commerce vendors. Through FBA, anyone from a local mom-and-pop boutique to an online startup can augment their sales footprint. With more than 175 warehousing locations, Amazon FBA allows merchants to offer their products to a much wider range of consumers while doing the logistical heavy lifting in the process.
Countless businesses have leveraged the FBA program to their success. In fact, 91% of the platform’s total sellers use FBA for their warehousing and order fulfillment, with 57% of those retailers using the platform exclusively. With so many success stories scattered around the internet, it’s easy to lose sight of the fact that enrolling in the FBA program can be complex by virtue of the platform’s options and customizable features. Learning the ins and outs of inventory prep prior to your initial warehouse shipment can be especially challenging without some background in FBA’s rules and regulations. Below, Symbia Logistics has compiled a list of five critical tips and tricks to help ensure that your experience with Amazon FBA prep is positive and rewarding.
1. Proactive Planning for Distribution Across the Amazon Network
One of the biggest benefits of the FBA program is the infrastructure that Amazon brings to the table. Their global warehousing locations feature enough space to comfortably accommodate thousands of FBA participants, with some locations stretching the length of 28 football fields or 1 million square feet.
Amazon may have the resources to warehouse your inventory for you, but effectively offloading your logistics onto the FBA service takes strategy. To begin, you have to have an understanding of your sales footprint. Ask yourself key questions such as:
Where are the bulk of my customers located?
What items are selling well?
Do I have any dead inventory?
How often will I have to restock the warehouse?
Ideally, you want your inventory delivered to warehouse locations that are adjacent to your main client demographics. Additionally, you want to make sure the bulk of your warehoused items are strong sellers as Amazon will charge extra fees for inventory that sits prone for too long.
“A stitch in time saves nine,” as the saying goes. Effective planning for distribution across Amazon’s vast network of resources will make your entire experience more positive.
2. Establish a Clear Process Flow
The first time that you send inventory to an FBA warehouse location, you’ll understand the complexity of Amazon’s system. Don’t worry; it gets easier over time, but only via a proactive operational approach. From proper labels and packaging to the most cost-efficient shipping method, you’ll want to make sure that the complexity inherent to setting up your FBA partnership is a one-time deal, not an ongoing headache. Establishing a clear and efficient process flow is critical.
Setting up a workable inventory flow is a matter of understanding the steps involved with shipping products to an Amazon warehouse location. Once you’ve set up your account and prepared your product listing —both back-end operational tasks— you’ve got to prep your inventory for shipment to the Amazon fulfillment center. That involves:
Printing the correct product labels
Printing the correct shipping labels
Packaging your inventory
Arranging a means of transport for your inventory
The first time can be daunting. The trick is establishing a clear process for future shipments that codifies each step into a procedure. It can be valuable to work with a third-party prep partner who is familiar with the intricacies involved with each step in the process to ensure an efficient process flow.
3. Understanding of Amazon’s Fee Structure Including Peak Season Storage
Amazon thrives on fees. FBA is an incredible way to offload the majority of your business’s logistical complexity onto a powerful fulfillment partner, but Amazon’s services aren’t free.
FBA’s basic fee structure involves a flat, per-item fee assessed by size and weight. However, several extenuating circumstances can modify your costs. For example, Amazon will assess storage fees if a product sits too long at a fulfillment location. If additional packaging materials are needed, Amazon will charge you a per-item fee for that as well. During peak seasons, such as the holiday rush, those storage fees increase exponentially. Understanding Amazon’s FBA fee schedule —or employing a partner who does— will make the process that much better.
4. Staying Engaged With the Changing Landscape of Amazon and its Effects on FBA Fulfillment
Amazon is one of the largest corporations in the history of the world. Their success is due in great part to their multi-pronged business model. Amazon is continually innovating, seeking new sales avenues and business ventures. Large-scale programmatic changes to the company as a whole can reverberate through individual programs like FBA.
The FBA program itself changes periodically, especially where the fee schedule is involved. For example, the COVID-19 pandemic brought about a general fee increase between 2-3% this year. The secret to effectively leveraging FBA to your benefit is resisting the urge to rest on your laurels. If you stay abreast of changes to the company and program, you will experience a far greater level of success using the platform.
5. Factoring in UPC/labeling Requirements During Manufacturing and Co-packing to Reduce Over-labeling
One of the most time and cost-intensive aspects of prepping your inventory for FBA is making sure that your products adhere to Amazon’s strict labeling requirements. Participation in the FBA program requires you, the seller, to include proper shipping labels when initially sending your inventory to a warehouse location and proper product SKUs to track your inventory throughout the fulfillment process. Labeling during the manufacturing phase requires a good grasp of those regulations. Still, there is just enough complexity inherent to the process that many merchants choose to use a prep or co-packing service instead.
One way to improve your FBA experience is by avoiding too many cooks in the kitchen, which can, in turn, contribute to costly mistakes such as over-labeling. You can reduce inventory management headaches by completely offloading the labeling component onto an experienced partner such as Symbia Logistics. Symbia Logistics is an industry leader in the 3PL arena, providing a full suite of logistical services to customers all over the United States. For more information on our service offerings or to stay up to date on the latest supply chain news and trends, please follow us today!