It’s on…this is the game changer we’ve all been waiting for!
Amazon “FBA” just launched for Australian entrepreneurs.
Wondering what FBA is and why it’s such a big deal?
For many 3rd Party Sellers, this is Amazon’s ‘defining moment’ in Australia.
Prior to FBA, Amazon provided one half of a successful business equation to 3rd Party Sellers – the customers. Many marketplaces such as eBay, Shopify and Etsy already do this, albeit to a lesser extent. But what they don’t do is 3rd Party Seller fulfillment.
The introduction of FBA however is a massive game changer if you’ve been thinking about selling products online.
What is FBA?
FBA (Fulfillment By Amazon) is the process by which Amazon allows you as a 3rd Party Seller to utilise it’s logistics capabilities – warehousing, picking, packing, delivery and even returns.
It was first rolled out in the US in 2006 and in 2016 Amazon through FBA delivered an eye watering 2 billion products. Call me a geek, but I needed to get my calculator out and figure out what that meant in terms I could understand … it’s basically more than 63 product deliveries per second every single second of the year.
The Australian Launch
On 27th February 2018, Amazon launched FBA in Australia. Amazon has essentially rolled out the red carpet for anyone that wants to start a business on-the-side by leveraging its enormous resources and customer-base.
We’re talking about the type of resources that are beyond the reach of any small to medium sized business – tens of thousands of square meters of warehousing space utilizing automated and sophisticated picking and packing systems, a substantial labour force and an army of dispatch vehicles.
This is a REALLY big deal because it helps level the playing field for you as an online seller against massive global retailers.
It means you will now have access to best-of-class logistics capabilities without having to invest in infrastructure or a time consuming labour intensive fulfillment system.
If you were doing this yourself, it would involve significant cost and take up a large part of your time which in our opinion defeats the entire purpose we choose to become Amazon Sellers … to free up our time!
FBA Is More Than Just Fulfillment …
- Here are a number of other huge advantages to using FBA:
- FBA ships incredibly quickly, sometimes within the hour. This increases customer satisfaction and therefore sales.
- Amazon offers multi channel fulfillment – in other words you could be selling on eBay but storing your products on Amazon and they will fulfill your eBay orders!
- Amazon also offers multi-country fulfillment –they will ship your products almost anywhere in the world
- Amazon handles customer complaints and product returns
- FBA products get additional exposure through Prime promotions
The Prime promotions above refer to Amazon Prime’s membership scheme which for US$99 a year (that’s the US pricing, Amazon Prime Australia is expected to launch mid 2018) provide members with TV, video, games, music and fast shipping at no additional cost. Shipping times are typically 1 to 2 days and in some cities for some products, deliveries are as fast as 2 hours (Amazon’s record delivery from order to doorstep is 13 minutes!).
Prime members also get access to a variety of discounts but they relate only to products that use FBA. This is yet another way in which using FBA can boost your product sales.
The Cost of FBA
Here’s what else FBA means for you in dollar terms:
- Free delivery for orders over $49
- 1 to 2 day free delivery for Prime members
- Amazon charge $7.76 to pack and send an item up to 3 kg (this is cheaper than Australia Post and they don’t pack it!)
- You pay a monthly fee of $49.95 to sell on Amazon
- Commissions between 6% – 15% depending on the product
Imagine your cost savings by leveraging Amazon’s infrastructure – retail rent, utilities, manpower, storage, transport etc.
And I haven’t even started to talk about Amazon’s biggest value add – the fact that they bring the customers to you!
I’ve said this before and I’ll say it again – there REALLY couldn’t be a better time to become an independent Amazon Seller.Back to Blog