Amazon FBA is one of the most popular e-commerce methods launched by the Amazon company. Which allowed tens of thousands of Internet goers to be merchants without large capital or the need for shipping warehouses and stores of the goods and products sold.
What is Amazon FBA?
Amazon is the biggest e-commerce organization in the world. It is not one company, but more than 70 companies that deal by selling and shipping through the Internet. In the recent period, the Amazon company entered the Arab region and bought the Souq.com website, which was considered the largest site For online selling in the Arab region. The company launched the Amazon FBA platform to attract more customers to it.
FBA stands for Fulfillment by Amazon, an idea launched by Amazon in 2006. After shipping these products to Amazon warehouses, the company packs the product on your behalf. It ships it to the customer you want to sell the product to, returning for a commission that Amazon collects from you.
Amazon FBI has allowed many Internet users to practice e-commerce and buy and sell through a largest e-commerce organization in the world, which is Amazon.
Also read: What is drop shipping, its benefits, and how do you start selling through it?
Amazon FBA and traditional trade
In the world of traditional commerce there are three types of merchants:
B2B Merchants: They are wholesalers who buy products in bulk and then store them in their warehouses and then sell them to smaller merchants.
B2C Merchants: They are the retailers who buy from a wholesaler in specific quantities and then sell them by piece or more as desired by the customer.
Importers: They are larger than wholesalers, as the importer travels to the country that produces the goods he wants to deal with, which is mostly China because it is the largest and cheapest country in the world as well, then the importer buys the product in large quantities and ships it to his country and leaves it in Warehouses and stores, then sells them to wholesalers.
Advantages of Amazon FBA
Amazon FBA allows you. in short, to be one of the importing merchants. But without the need to travel to the country producing the goods or the need for warehouses and warehouses for the product. But Amazon performs this task on your behalf and leases. Its stores to you and ships it to customers who order the commodity via the Internet for a fee It is acceptable in the world of e-commerce.
That distinguishes the amazon wholesale FBA platform it offers many storage options, as the company has warehouses in America, warehouses in China, and warehouses in Germany and Europe in general and in many other countries, and thus it saves a lot of time in shipping the product upon request.
What does it take to be a subscriber to Amazon FBA?
In fact, you do not need much to become an Amazon FBA customer. It is simply required of you:
- A computer or laptop to use it.
- Direct connection to the Internet.
- Medium capital, and it is not required that the capital be large.
- To open a seller account on Amazon FBA.
- A good study of the commodities and products you want to deal in the market situation. And the best places to sell them.
- Searching for merchants in the country from which you want to import the product. Which is mostly China. And paying attention to this step is of a high degree of importance so that you do not fall victim to fraud or deal with a dealer who deals with the dropshipping system.
- While searching the Internet for the best price for an item and negotiating with the merchant to get the best price advantage to compete and promote the product.
An example of an Amazon FBA sale
I logged into an Amazon account as a customer. I want to buy a specific item from Amazon, which is a wireless gaming headset. The price of these headphones on Amazon is 26 euros, and it written next to the Prime speaker, which means that it is in the Amazon warehouse, meaning that the headset included in the Amazon FBA. When entering Alibaba, a Chinese site specializing in selling products and goods at the wholesale price, I found that the headset with the same specifications and shape costs 8 euros if you buy 500 pieces of the product.
This price is not final, but negotiations can be entered into with the merchant to reach the lowest possible price. Here we have a headphone, the sales price for the customer on Amazon is 26 euros and a wholesale price of 8 euros, meaning that the difference is 18 euros.
In the case of purchase through Amazon FBA, the company ships the product to its warehouse in the country that I specify and stores it, packaging it and delivering it to the customer upon purchase. Suppose that each piece costs 2 euros for shipping charges, and Amazon FBA also receives a commission and packaging of 6 euros.
You will find that the item costs: 8 purchase price + 2 shipping cost + 6 Amazon commission = 16 euros. While selling it at 26 euros. So if you calculate taxes for the country in which you sell the product. You will find that the profit for one piece may exceed 6 dollars profit. Net, and you do not need stores, warehouses, or travel and accommodation costs with him.
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