What is Amazon FBA?
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The History of FBA (Fulfilled by Amazon)
FBA (Fulfillment by Amazon) was introduced on September 19, 2006. For the first time, small businesses could take advantage of Amazon's order fulfillment and customer service infrastructure. This allowed customers to visit Amazon’s site and purchase products supplied by 3rd party companies, delivered by Amazon.
This changed the used book market and led to a large portion of used book sales taking place online. As a result, brick-and-mortar operations had to compete with online one-click shopping. Before FBA, most online sales were handled by third-party sellers who stored and dispatched inventory. FBA offered sellers the option to forgo in-house fulfillment. As an added benefit, Amazon handled returns and customer service. Sellers can now devote more time to other tasks such as sourcing, operations, and business development.
Amazon Prime
Amazon Prime, a membership that provides free two-day shipping, was introduced in 2005. Prime comes with the ‘A-Z guarantee’ - which ensures quality assurance and refunds for unwanted items. These benefits, along with 2-day (sometimes same-day) shipping, made the FBA marketplace a strong market for books. Customers were willing to pay a premium for FBA items. This phenomenon is referred to as the Prime Bump.“In other words, Prime offerings sell for a higher price than Merchant Fulfilled (MF) offerings. Customers generally accept the price difference and prefer to buy products that are eligible for Prime.
How Amazon Shipping Works
The fulfillment and logistics process Amazon pioneered is arguably the most efficient in the world today. Their systems rival and compete with those of UPS, FedEx, and DHL. Watch the video below to learn how Amazon ships items.
