• Home
  • BLOG
  • What is Amazon FBA (Fulfilment by Amazon)?

What is Amazon FBA (Fulfilment by Amazon)?

October 13, 2023

Acronyms are great, if you know what they mean. If you don’t they can be really, really annoying. You start to read something and pretty soon you hit ‘I started using BBHNG, after trying NNHIJ, but found that the PPPOKI was a far better proposition, so I stuck with the TTYGHR service.

Grhhhh (not an acronym).

FBA means ‘Fulfilment by Amazon’.

In a nutshell you send the products that you sell to Amazon to ship, which they do very cheaply, and very quickly, that’s Amazon FBA.

But, fulfilment by Amazon means a little more than just shipping, it includes warehousing, dealing with returns, and a whole lot more.

It works like this:

You send your products to an Amazon fulfilment centre (Amazon tell you which one).

They sort and store your products in one of their state of the art fulfilment centres; they’re not called warehouses any more.

When a customer orders one of your products, Amazon picks, packs, ships and tracks the order for you.

Amazon also handle returns and refunds.

Amazon charges both storage fees and fulfilment fees.

However, those fees include Amazon’s amazing 24/7 customer service, you know, the service where you click a button on the website that says ‘get a call back’ and the phone rings instantly with a real person on the other end. The service also includes the cost of shipping goods to customers and access to one of the largest and most advanced fulfilment networks in the world.

But it gets better, research shows that using FBA will increase your Amazon sales by between 30% and 50%.

And perhaps the most important of all, access to Prime, either one day, or next day delivery. We’ll cover Prime in another article, but suffice to say a very large percentage of orders are prime.

According to the Daily Telegraph:

Estimates compiled by Ovum show that UK subscriber numbers for Amazon’s on-demand delivery and streaming service, Prime, have grown almost 400% in the past seven years, from 1.1 million users in 2011 to 5.3 million in 2018.

FBA, or Fulfilment by Amazon is one of the key components of Amazon’s not so slow march to dominate Ecommerce. Together with Amazon Prime, one click ordering, and Amazon’s stellar customer service, customer pathways to purchase now have virtually no pinch points.

If you are an existing Amazon seller, or brand, and if you don’t already, FBA is one of the most effective ways to give your store an Autumn lift, particularly as we near Christmas, one the most profitable times of the year to be selling on Amazon.


Insights to help grow profit

Don't miss out on the latest strategies for growing your brand sustainably on Amazon. Subscribe now!

About the Author

James Wakefield is an Amazon Vendor expert and the founder of WAKE Commerce.

Having been involved in the internet since year dot (com), James established WAKE in 2015 to share his passion for data, branding and online retail strategy.

Since then, WAKE has helped leading consumer brands build a more profitable relationship with Amazon, navigate the many complexities of the platform and scale their business on the world’s biggest marketplace.

With a particular focus on Vendor Central, James consults with scaling businesses that want to make Amazon work for their brand.