Amazon FBA Shipping 2024: Everything You Need to Know
Amazon FBA shipping (fulfillment by Amazon) continues to be a powerful tool for sellers, taking care of storage, packaging, shipping, and returns while you focus on product sourcing and marketing.
Kris Christian, Founder and CEO of the Chicago French Press stated that Amazon helped them grow significantly by about 50% from 2021 to 2022.
Studies have shown that FBA sellers enjoy 15-20% higher conversion rates than non-FBA sellers, likely due to Prime eligibility and faster shipping times.
This begs the question of what Amazon FBA is and how you use it for your business.
What is Amazon FBA (Fulfillment by Amazon FBA)?
Fulfillment by Amazon FBA is a service where you send your inventory to Amazon warehouses, and they handle storage, fulfillment, customer service, and returns.
When a customer purchases a product from an FBA seller, Amazon picks, packs, and ships the product on the seller’s behalf. This lets you offer Prime-eligible shipping, improve customer satisfaction, and scale your business efficiently.
How To Plan FBA Shipping?
When it comes to FBA shipping, meticulous planning is crucial. The key steps are:
1. Product and Sales Analysis
Consider the size, weight, fragility, and value of your products. These factors directly impact packaging, shipping costs, and potential storage fees.
Estimate realistic sales volume to gauge storage needs and avoid costly overstocking or stockouts. Use historical data, industry trends, and competitor analysis for informed projections.
2. Budget and Costs
Thoroughly research Amazon’s FBA fees, including per-unit storage fees, fulfillment fees, and referral fees. Factor these into your product pricing and profitability calculations.
Use Amazon Shipping Cost Calculator to estimate costs based on your product information and preferred shipping method. Explore alternative routes and carriers for better rates.
3. Shipment Plan Development
To best develop your shipment plan, accurately determine the number of units you’ll send to each fulfillment center to avoid unnecessary fees and stock imbalances.
Familiarize yourself with Amazon’s size and weight restrictions for individual packages and Amazon FBA palette requirements. Optimize packaging to comply with regulations and minimize shipping costs.
Research and understand Amazon’s labeling requirements, including barcodes, FBA SKUs, and other necessary information. Ensure the labels are clear, durable, and compliant to avoid shipment delays or rejections.
FBA Shipping in 8 Steps
- Research: Do a deep search into FBA fees, size/weight restrictions, best practices, and potential challenges. Use Amazon Seller Central resources and consult industry experts for comprehensive guidance.
- Prepare: Gather detailed product information, labels, and approved packaging materials. Ensure that everything aligns with Amazon’s requirements to avoid delays and issues.
- Package: Meticulously pack your products according to Amazon’s requirements. If you hope to choose a box, check Amazon FBA shipping box size for safety measures. Consider using appropriate cushioning materials to protect fragile items. Label each package clearly and securely with FBA SKUs and barcodes.
- Label: Apply Amazon-approved labels with product barcodes and FBA SKUs to each package. Double-check for accuracy and compliance to prevent shipment rejections.
- Manifest: Create a detailed shipment manifest listing product details, quantities, and package identifiers. This document is crucial for accurate inventory tracking and shipment processing.
- Ship: Choose a reliable carrier or the best Amazon FBA freight forwarder that meets Amazon’s requirements and offers competitive rates. Consider shipment size, time sensitivity, and budget when making your selection.
- Monitor: Track your shipment progress through Amazon Seller Central. Stay informed about potential delays or issues and proactively address them with your chosen provider.
- Reconcile: Upon delivery, reconcile your shipment with Amazon’s records. Address discrepancies instantly and maintain clear communication to ensure accurate inventory fee and management.
Benefits and Challenges of Amazon FBA Shipping
There are 3 benefits when it comes to Amazon FBA shipping:
- Convenience and Scalability: FBA frees up your time and resources by handling storage, fulfillment, and customer service, allowing you to scale your business efficiently.
- Prime Eligibility: FBA-fulfilled product quality for Prime shipping, potentially boosting your visibility and conversion rates.
- Improved Customer Satisfaction: Faster shipping times and hassle-free returns offered by FBA can enhance customer satisfaction and loyalty.
The challenges are:
- Storage Fees: Storage fees can accumulate for slow-moving inventory, impacting your profitability. Careful inventory management and sales forecasting are crucial.
- Minimum Order Quantities: Some FBA products under Amazon FBA minimum quantity have MOQs, which can pose challenges for smaller businesses with limited inventory.
- Limited Control: You have less control over shipping methods and timelines than self-fulfillment, potentially impacting flexibility.
Overview of Amazon FBA Shipping Methods
There are various methods when it comes to Amazon FBA shipping:
- Small Parcel Delivery suits smaller, lighter shipments, often sent via UPS, FedEx, or USPS.
- Less Than Truckload (LTL) is ideal for medium-sized shipments where you don’t fill an entire truck.
- Truckload (TL) is a cost-effective method for large shipments that fill an entire truck.
Partnering with Amazon or Independent Freight Forwarders
Amazon-partnered carriers often offer discounted rates but limited flexibility. Independent freight forwarders offer broader options like FBA shipping rapid express freight, falling underneath Air freight, Ocean freight, and land transportation.
Though some might have lower costs for larger shipments, so be sure to research and vet.
Amazon FBA Shipping Fees
Amazon FBA fee breakdown is necessary to understand overall cost:
- Per-unit storage fees: These are based on product size and storage duration. The costs are normally computed on a monthly basis and assessed on a per-cubic-foot basis for the amount of space that is occupied.
- Fulfillment fees: are set by the Amazon Fulfillment Center based on the size and weight of the items, as well as the place of destination. Amazon fulfillment fees cover picking, packing, and shipping costs vary based on size, weight, and dimensions.
- Referral fees: Paid to Amazon for each item sold through their platform.
- Long-term storage fees: Refers to the cost of products that have been stored in Amazon’s warehouses for more than a year. These fees are assessed twice a year, and their amounts vary according to the length of time a product has been stored as well as the size of the goods.
- Removal fees: If you want to remove your products from Amazon’s warehouses, you will be required to pay removal fees through FBA. These fees change depending on the dimensions and weight of the goods, as well as the location to which they are being shipped.
Third-party Warehouse vs Amazon FBA
Here’s how to choose the right fulfillment option for you:
Regarding small businesses with limited inventory and sales volume, FBA’s convenience and scalability can be highly beneficial.
Larger businesses with unique requirements, high sales volume, or specific control needs might explore third-party warehouses for lower storage costs and greater customization.
Here are the key benefits of using third-party warehouses:
- Cost savings: Third-party warehouses can help small businesses save money on storage and fulfillment services by letting them use economies of scale.
- Flexibility: Third-party warehouses can provide customized services, such as handling, packaging, and labeling.
- Scalability: Third-party warehouses can help businesses that want to grow quickly but don’t want to spend money on more infrastructure.
- Geographic reach: Third-party warehouses that offer fulfillment services in different regions or countries can help you reach new customers and markets.
- Expertise: Third-party warehouses have experience with logistics and fulfillment, which can help businesses improve their operations and save money.
Amazon FBA Key Considerations
Direct shipping from Alibaba to Amazon FBA is prohibited. Amazon requires specific packaging, labeling, and fulfillment processes that direct shipments don’t meet.
The cheapest way to ship to Amazon FBA depends on factors such as shipment size, distance, urgency, and carrier competition.
FBA Shipping or FBM
Whether you should use FBA (Fulfillment by Amazon) shipping or FBM (Fulfillment by Merchant) shipping depends on your business needs, the products you sell, and your budget. Consider these factors:
FBA Shipping:
Advantages: By letting Amazon handle shipping, customer service, and returns, FBA can save you time and work. FBA also gives you access to Amazon Prime and other perks, which can help you get more attention and make more sales.
Disadvantages: FBA can be more expensive than FBM, especially for products with low margins. FBA also has strict rules about how things should be packaged and labeled, which can make the fulfillment process harder and cost more.
FBM Shipping:
Advantages: With Amazon FBM, you can fulfill orders yourself or use a third-party fulfillment center, which can make it cheaper than FBA. FBM also gives you more control over the packaging and shipping methods used during the fulfillment process.
Disadvantages: FBM is harder to manage because it takes more time and effort to handle customer service questions, process returns, and manage inventory. FBM may also make it harder for you to use Amazon Prime and other benefits.
In the end, your business needs and goals will determine whether you should use FBA or FBM. FBA could be a good choice if you have high-margin products and want to save time on fulfillment.
FBM may be a better choice if you have low-margin products or want more control over the fulfillment process. You can also use a mix of FBA and FBM to find the right balance between cost and efficiency.
Amazon Freight Forwarder
Amazon Freight Forwarder is a service that Amazon offers to help businesses coordinate how their products get from their overseas suppliers to Amazon’s warehouses. Amazon Freight Forwarder offers full logistics services, like clearing customs, shipping freight, and delivering to Amazon warehouses.
Businesses that bring in goods from other countries can save time and effort by using this service. It can also give them better visibility and control over the supply chain. But Amazon Freight Forwarder might be more expensive than other freight forwarding services and might not work for all kinds of products.
Overall, Amazon’s FBA Shipping and Amazon Freight Forwarder are two different services that can help businesses manage their logistics and supply chain. FBA is focused on domestic fulfillment and can save time and effort for businesses that sell through Amazon.
Amazon Freight Forwarder, on the other hand, is focused on international logistics and can help businesses manage how their products get from their overseas suppliers to Amazon’s warehouses.
How To Find Amazon FBA Freight Forwarder
Here are some steps you can take to find a reliable and reputable Amazon FBA freight forwarder to help you get your products from overseas suppliers to Amazon’s warehouses:
1. Do research online: Many freight forwarders specialize in FBA shipping, so doing research online is a good place to start. Look for companies that have worked with Amazon FBA sellers before and check customer reviews and ratings.
2. Check for certifications and licenses: Make sure the freight forwarder you choose has the right certifications and licenses to handle international shipping, such as a Customs Broker License and a Federal Maritime Commission license.
3. Ask for bids: Call up a few freight forwarders and ask for bids on their services. Be clear about your needs and requirements, such as the type of products you are shipping, the number of packages you are sending, and the countries where the packages are coming from and going to.
4. Compare prices and services: Look at the quotes you get and compare the prices and services each freight forwarder has to offer. Look for a provider with competitive prices and full services, like clearing customs and shipping to Amazon’s warehouses.
5. Check references: Before choosing a freight forwarder, ask other Amazon FBA sellers who have used their services for recommendations. Contact these references to find out what they thought of the service, how reliable it was, and how the whole thing went.
By following these steps, you can find an Amazon FBA freight forwarder that fits your needs and helps you manage your logistics and supply chain more efficiently.
Amazon Freight Forwarder From China To USA
Look online for freight forwarders who have experience getting goods from China to the US on behalf of Amazon FBA sellers. Be sure the freight forwarder is authorized to deal with overseas shipments by checking their credentials.
It is a good idea to get quotations from multiple freight forwarders, compare prices and services, and verify the freight forwarder’s ability to manage logistics before hiring them.
Lastly, talk to other Amazon FBA sellers who have used the service to find out about its quality, dependability, and general experience. Using this method, you can find an Amazon freight forwarder to help you manage the supply chain and logistics of shipping goods from China to the US.
