What is Amazon FBA? (Fulfillment by Amazon)

What is Amazon FBA?

FBA Fulfilled by Amazon

Amazon launched the FBA (Fulfillment by Amazon) service on September 19, 2006. For the first time, small businesses could use Amazon's order fulfillment and customer service infrastructure. From that point, it was possible for customers to visit Amazon’s site and buy products not only from Amazon but also 3rd party vendors.

This changed the used book market and led to a majority of used book sales moving online. As a result brick and mortar operations had a hard time keeping up with the convenience of online one-click shopping. Before FBA, most online sales were fulfilled by 3rd party merchants who stored inventory at home or warehouse. FBA gave sellers the option to discontinue fulfilling their orders in-house. As an added benefit, Amazon handled returns and customer service. Sellers could now dedicate more time to other tasks like sourcing, operations, and business strategy.

 

Fulfilled by Amazon Process 

Prime

Amazon Prime, a membership offering free two-day shipping, was launched in 2005. Prime came with the “A-Z guarantee” - which guarantees quality assurance and refunds on unwanted items. These benefits along with guaranteed 2-day shipping fostered a premium market for books sold via FBA. This is known as the Amazon “Prime Bump.” In other words,  Prime offerings (FBA) sell for a higher value than Merchant Fulfilled (MF) offerings. The price difference is widely accepted by customers - and some choose only to buy products that are Prime eligible. 


Amazon Warehouse


Is it too late to Start?

I've spoken to and heard plenty of tales from booksellers who were selling on Amazon during the early days of Prime. They often refer to it as the “golden age” of bookselling. At that time, there were very few sellers compared to today and a fee structure that made almost any book profitable as an FBA listing. Sourcing was different too. You could find more inventory than one person could handle, simply because there weren't many people who understood the opportunity in online bookselling. As FBA became more popular, others saw this opportunity, and eventually, large well-funded organizations got involved. There was a time when Goodwill, The Salvation Army, thrift stores, and libraries did not sell online. But that is no longer the case.

Today most of these organizations have fully developed online sales operations. In my opinion that is a very good thing for libraries and non-profit organizations. This provides a new source of funding to support community programs. Although it is harder for an individual seller to find inventory today, there are still plenty of opportunities.

In the coming sections, we will talk about strategy, how to find books to sell online, how to process and ship books to Amazon, and how to build an eCommerce business in today’s environment.



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