Fulfillment by Amazon (FBA) is an ecommerce fulfillment platform that comes with a valuable incentives program and, of course, seamless Amazon compatibility. You can handle multi-channel fulfillment and offer free shipping for your orders without any extra effort. By looking at the good and the bad, let’s find out if FBA is the right service for you.
Fulfillment by Amazon Compared to the Best Ecommerce Fulfillment Options
Fulfillment by Amazon is perfect for Amazon sellers, but it’s certainly not the only ecommerce fulfillment option on the market today. If you want some quality alternatives or options that work for non-Amazon channels, read our full post on the best ecommerce fulfillment platforms and examine our top picks below:
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Fulfillment by Amazon: The Good and the Bad
Ecommerce fulfillment services all accomplish the same thing but have different pros and cons to them. You’re bound to find variations in shipping carriers, fee structures, compatibility with platforms and channels, and more. Below, we’ll break down some elements that make FBA stand out in good and bad ways.
What Fulfillment by Amazon Is Good At
Obviously, Fulfillment by Amazon is well-suited for Amazon sellers. Still, FBA presents some real benefits that go beyond its ability to help you manage fulfillment from the same platform on which you sell.
Seamless Amazon compatibility: Let’s get the most obvious point out of the way first. FBA is the best fulfillment service for any Amazon seller. All you need to utilize the FBA platform is an Amazon seller account, which you can set up in a matter of minutes and add the fulfillment platform from there. This also means your online store is compatible with Amazon Prime, Amazon Business, and Amazon Advertising—making it easier for your business to get all the benefits in one seamless interface.
Incentives program: Amazon offers up to $50,000 in potential benefits for any new seller. For FBA incentives alone, any first-time seller can receive 90 days of free storage on 50 units, 120 days of free storage for apparel and shoes, $100 off inbound shipping within the Amazon Partnered Carrier Program, and $200 off fulfillment fees with Amazon Global Logistics.
Free shipping: FBA offers multiple benefits, but one of its most valuable is its free two-day shipping. All FBA products automatically receive Amazon Prime benefits and will display the Prime logo, so your customers can have peace of mind knowing that Amazon will reliably and swiftly handle all the packing, delivery, customer service, and returns at no extra cost to you or the customer.
Subscribe & Save offering: Not only can you impress your customers with free shipping, but FBA gives you the option to offer your customers a way to regularly receive deliveries of products they frequently buy. FBA’s Subscribe & Save program helps you maintain repeat customers with ease.
Easy order management: FBA gives you the freedom to manage all of your transactions in one intuitive interface, where you can easily view all your products, search for SKUs, view and sort by offer status, and take action on low-stock items. If you’ve been an Amazon seller for a little while, you’ll find the FBA interface similar and familiar, eliminating any issues of learning a new platform just to handle order fulfillment.
Support for non-Amazon channels: FBA integrates with over 100 other tools, including other ecommerce platforms. So, you can decide to sell from your site or another channel but continue to use Amazon’s picking, packing, and delivering processes. In any combination, use FBA’s multi-channel fulfillment to pool your inventory, create a streamlined workflow, and track all of your orders with ease.
What Fulfillment by Amazon Is Lacking
While Fulfillment by Amazon offers a well-rounded set of features for ecommerce fulfillment, there are still drawbacks. Read on to find if any of these areas for improvement serve as a dealbreaker for you and your fulfillment needs.
Complicated fees: Fulfillment by Amazon has more fees to pay attention to than most of its competitors. If you decide to fulfill your orders through FBA, charges are incurred in areas such as inventory storage, peak versus non-peak fulfillment, product removal, unplanned services, and returns processing.
While you’re likely to find many of these pop up with other fulfillment services, Amazon’s fee structure is dense and complex. It can be hard to predict and truly understand what orders will cost to fulfill each time. A few user reviews also claimed that these fees are constantly subject to change, so that’s something you always need to keep in mind.
Manual tax calculations: Unlike most fulfillment services, FBA doesn’t automatically calculate tax during the fulfillment process. That falls on you, which can be time-consuming and inconvenient. FBA doesn’t even include tax estimations in its fee calculator, which is another added inconvenience.
Strict label requirements: You’ll find in many reviews that Amazon has strict labeling requirements for all packages. According to Amazon, you must print all package labels in black and white, with non-reflective material and removable adhesive. You also need to ensure that the labels fall within specific size requirements, depending on the type. There are also rules regarding barcode placement and other packaging norms, and if you don’t abide by these requirements, Amazon will charge you an additional fee.
Fulfillment by Amazon Options and Pricing
Amazon’s FBA service is an easy add-on to your Amazon Seller account, and Amazon also offers a couple of other relevant and ecommerce-related services worth knowing about, too. Let’s run through the costs, fees, and features that come with each.
Fulfillment by Amazon
The base functionality of Fulfillment by Amazon is simple enough to understand, but there are a lot of attendant costs to be mindful of as well (as we mentioned in the section above on FBA’s drawbacks).
Let’s start with the simplest factor. You’ll need an Amazon Seller account to tap into FBA (even if you’re not really planning on selling on Amazon itself).
This comes in two straightforward options. The Individual plan is perfect for infrequent or low-volume sellers (Amazon suggests a threshold of moving less than 40 units per month). That option gets charged per transaction at a rate of 99 cents per item sold.
Of course, that would get costly at higher volumes. That’s where the more common Professional plan comes in. For $39.99 per month, you get a lot of features lacking in Individual, such as inventory management, advertising tools, and promotions.
With either plan, you can add FBA to your Amazon Seller account for no additional charge. However, there are charges galore to be mindful of in terms of inventory storage, pick-and-pack, and shipping.
To run through all of the fee structures and rates would double or triple the length of this post, so we’ll just run through some common ones so you can get a general feeling for what FBA actually costs on a per-order basis.
- Small standard packaging (15” x 12” x 0.75”): $3.07 – $3.98 fulfillment fee, depending on weight and season
- Large standard packaging (18” x 14” x 8”): $3.72 – $6.60 fulfillment fee, depending on weight and season. Items over three pounds incur an additional per-pound fee.
- Small oversize packaging (60” x 30”, up to 70 lbs.): Starts at $9.39 + $0.40/pound for each additional pound above the first pound
- Medium oversize packaging (108” on the longest side, up to 150 lbs.): Starts at $13.37 + $0.46/pound for each additional pound above the first pound
- Special oversize packaging (over 108” on the longest side, over 150 lbs.): Starts at $158.49 + $0.83/pound for each additional pound above the first 90 pounds
Keep in mind that Amazon changes these rates from time to time. These are the rates at the time of this post’s writing, but you’ll want to check their fee tables and calculator to make sure you have the most current rate information.
Fulfillment by Amazon Inventory Management
When you sign up for an Amazon seller account, you will get access to FBA’s inventory management functionality, which will help you list products and create shipping plans. You can also send, track, and monitor shipments and remove any inventory from Amazon fulfillment centers.
FBA has an inventory dashboard that allows you to track your inventory age, fix stranded inventory, and restock inventory. It also displays your inventory performance index (IPI) score. A low score means you’re paying excess fees. You can also manage excess inventory and optimize your inventory levels to get the best return on your investment.
To store and manage your inventory, FBA will expect you to pay a few fees. Here’s a quick breakdown:
- January to September (non-peak): $0.75 per cubic foot (standard size) or $0.48 per cubic foot (oversized)
- October to December (peak): $2.40 per cubic foot (standard size) or $1.20 per cubic foot (oversized)
Fulfillment by Amazon International Ecommerce
FBA’s international ecommerce solution is excellent for anyone wanting to expand their business to reach a global audience. Not only can you accelerate your international sales with Amazon, but you can grow and diversify them by taking advantage of peak seasons in different countries.
FBA lets you expand to Europe, Asia, the Middle East, and Central and South America. If you want to expand to Europe, FBA lets you ship to a European fulfillment center at no extra cost.
Amazon doesn’t currently disclose pricing for a wide range of categories. However, it does offer international standard and expedited pricing for entertainment-related orders to give you a ballpark of what to expect:
- Books: $16.95 for one lb or $24.95 over one lb
- Music, Videos, and DVDs: $14.95
For FBA’s international expedited pricing, the above categories cost $46.50 across the board.
Fulfillment by Amazon in Summary
Fulfillment by Amazon has some excellent features for sellers, such as free shipping and convenient ways for your customers to order. But it is riddled with complicated fee structures that can cause fulfillment to get pricey if you’re not mindful of them.
FBA is a solid fit for an Amazon seller, but there are other platforms we recommend first for those with their own online stores or who prefer other channels. Shopify Fulfillment Network doesn’t have any upfront costs and offers free storage for six months. ShipBob is an excellent alternative if you are looking for omnichannel fulfillment with a 99.96% delivery rate. And if you want to reach a global audience with ease, Easyship is the best platform to use.
Want to read more about the best ecommerce fulfillment services? We reviewed dozens of options and narrowed it down to the top five. If you want to scope out all of your options, see all of our top picks here.