What is Amazon FBA?

Acronyms are all around us. We use them to communicate in many situations and e-commerce is no different. Each week I'll pick a different acronym or word to define, and discuss, that is relevant to online sales, marketing and/or business in general. This week I'll start with one of the biggest acronyms in e-commerce today:

FBA = Fulfillment by Amazon

Amazon is the biggest e-tailer in the world run by founder, CEO and mastermind Jeff Bezos with the vision “to be earth's most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.” To meet that vision Bezos began allowing third party sellers to sell on the Amazon platform starting in 2000. In the beginning these sellers could list their items for sale on Amazon.com but fulfilled them from their own warehouses and distribution channels.

To meet the demand of its growing customer base Bezos implemented warehouse automation and increased the number of fulfillment centers nationwide and added the Fulfillment by Amazon (FBA) program for third party sellers . This program offers:

Storage  – Third party sellers  can send their inventory to one of Amazon's state-of-the-art fulfillment centers where Amazon will store it for a monthly fee until it sells or the seller requests it back or has the item destroyed. [More on storage fees can be found here.]

Fulfillment – When an item sells Amazon takes care of the pick, prep, pack and shipping to the customer for a fee. [More on fulfillment fees can be found here.]

Customer Service – When a customer buys an item from a FBA program member they get Amazon's trusted customer service and hassle-free returns.

Other Benefits – Any items in the FBA program are eligible for Amazon Prime Free Two-Day Shipping and FREE Shipping for orders of $35 or more for non-Prime customers.

Amazon has produced a great video about the program. If the video doesn't show up below, you can find it here.

To find out more information about the benefits of joining the Amazon FBA program head over here.

What intrigues you most about the Amazon FBA program? Please add your thoughts in the comments below.

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