Navigating the world of eCommerce can be daunting, especially when you're starting out. If you're looking to simplify the process and maximize efficiency, using Amazon's Fulfillment by Amazon (FBA) service could be the key to unlocking your store's potential.
Here in Canada, Amazon is the top online shopping platform, with two in three Canadians purchasing from Amazon in the past year.
This guide provides a comprehensive introduction to starting with Amazon FBA step-by-step, the benefits and drawbacks of the service, and the associated costs. Whether you are an eCommerce novice or an entrepreneur expanding your reach, this Amazon FBA beginner's guide will equip you with the knowledge to launch your Amazon FBA selling journey.
What is Amazon FBA?
Amazon FBA, or Fulfillment by Amazon, is a service that allows you to leverage Amazon's robust logistical infrastructure for your online store.
By using FBA, you send your merchandise to Amazon’s fulfillment centers, and Amazon then takes care of storage, shipment, customer service, and returns for these items. This model enables you to focus on scaling your business rather than getting bogged down with logistical concerns.
Pros and Cons of Selling With Amazon FBA
Selling with Amazon FBA comes with several advantages and disadvantages that you need to consider before diving in:
Pros:
- Logistical Support: Amazon's world-class logistics team handles your inventory management, warehousing, and shipping processes.
- Prime Eligibility: FBA items are eligible for Amazon Prime, which provides free shipping to customers which can significantly increase your sales.
- Increased Exposure: Products fulfilled by Amazon often rank higher in search results, increasing visibility.
- Streamlined Operations: Amazon handles customer service and returns, reducing the burden on you and allowing you to focus on other aspects of your business.
Cons:
- Costs: Although FBA can help increase sales, the fees can be substantial. Understanding the full cost structure is crucial before starting. You can learn more about all of the costs involved later on in this blog.
- Inventory Management: Sending inventory to Amazon's warehouses requires careful planning to avoid long-term storage fees.
- Less Control: Relying on Amazon for fulfillment reduces your direct contact with customers and can complicate quality control.
Amazon FBA Setup Guide for Canadian eCommerce Business Owners
Selling with Amazon FBA can be a streamlined process if followed correctly. Here’s a detailed guide specifically tailored for Canadian sellers getting started with Amazon FBA:
- Create Your Amazon FBA Selling Account
Account Type: Choose between an Individual plan and a Professional plan based on your business needs. The Individual plan has no monthly fee and is suitable if you plan to sell fewer than 40 items per month. The Professional plan, at $39.99/month, offers additional tools and is better suited for higher volume sales.
Registration: Register your account by providing your business name, legal information, and tax details. Canadian businesses will need to provide a GST/HST number. Amazon will verify your information, which may include a request for additional documentation to confirm your identity and business legitimacy.
Bank Account and Payment Setup: You need to be ready to get paid! Link a bank account where Amazon can send your sales proceeds.
- List Your Products
Identify products that not only have a high demand but also less competition. Here are our top 15 tips to help you choose a successful product when selling with Amazon FBA.
Make sure that your listings include high-quality images, detailed and engaging descriptions, and keywords that improve search visibility. Consider using bilingual listings to cater to both English and French speakers in Canada.
- Prepare Your Products for FBA
Amazon has specific requirements for packaging items to prevent damage during storage and shipping. This includes using durable packaging and sufficient padding.
You can either label your products yourself or use Amazon's Label Service for a fee. Labels must be placed on items and boxes per Amazon’s guidelines to facilitate easy scanning and sorting in their warehouses.
- Ship Your Products to Amazon
In your Seller Central account, create a detailed shipping plan that includes which items you are sending, how many, and which Amazon warehouse they should go to. Amazon might split your shipment among multiple warehouses based on their logistical needs.
While consumers rarely look beyond the cardboard box on their doorstep, merchants understand the reality of shipping to Amazon FBA. It’s relatively easy, but it takes work and requires an awareness of and compliance with Amazon’s strict guidelines.
Here at eShipper, we created Smartelogistix exclusively for Amazon sellers who store their products and fulfill their orders with Amazon FBA. With this service, you can ship your packages and pallets to all Amazon FBA facilities in North America. Our in-house Amazon experts have the knowledge and experience to make the shipping process run smoothly. Learn more about how we can make this process even easier!
Make sure you track your shipments to Amazon's fulfillment centers using the tracking options provided by your carrier. Once received, Amazon will check in your products, which will then make them available for sale.
- Manage Your Inventory on Amazon
It is important that you are regularly checking your inventory levels on Seller Central and replenishing stock as needed to avoid stockouts, especially during peak shopping seasons like Christmas and Black Friday.
You can utilize Amazon’s detailed reports and analytics to monitor how well your products are doing, which can help you make informed decisions about pricing, promotions, and inventory management.
Based on customer feedback and sales performance, you should continuously improve your listings. This might involve updating product descriptions, adjusting pricing, or running promotional campaigns.
- Optimize Your FBA Experience
Amazon offers advertising options, such as Sponsored Products to increase visibility. These ads appear in search results and product detail pages, helping to drive more traffic to your listings.
Encourage customer reviews by following up with customers post-purchase. Positive reviews can significantly influence buying decisions and enhance your product's credibility.
Costs of Getting Started with Amazon FBA
The costs associated with Amazon FBA are varied. To learn about current up-to-date costs, take a look at Amazon’s Fulfillment Overview. Altogether, you can expect costs to include the following:
- Account Fees: Depending on your plan, Amazon charges a monthly fee ($39.99 for a Professional account or $0.99 per item sold for an Individual account).
- Fulfillment Fees: These are based on the size and weight of your products and include packing, shipping, customer service, and product returns.
- Storage Fees: Inventory storage costs are charged monthly based on the daily average volume. Keep in mind these storage fees can vary depending on the season and whether your goods are classified as dangerous.
Conclusion
Launching an Amazon FBA business in Canada offers a robust pathway to grow your eCommerce store with the backing of Amazon's extensive network.
This Amazon FBA beginner's guide should help you understand and navigate the setup process, costs, and management of FBA.
However, the process can still seem overwhelming, we know! That’s why we’ve tailored a service just for those like you. Reach out to us here at eShipper today to get the support you need in successfully starting your Amazon FBA adventure!
