Amazon FBA (otherwise known as Fulfillment by Amazon) is one of the most powerful partners you can choose for your business.
Why? Because shipping matters. And it matters a lot to consumers.
The 2019 UPS Customer Experience Study found that “a whopping 96% of online shoppers have used a marketplace,” and that globally, “38% of shoppers visit a marketplace from once a week to multiple times daily.”
Of that, free shipping is the second leading reason for online shopping customers to choose to purchase from a marketplace rather than a retailer.
But, delivery experience is key to those shoppers returning again and again.
In the 2018 study, Last Mile Delivery: What Shoppers Want and How to #SaveRetail, “83.5% of shoppers are unlikely to shop with a brand again after a poor experience,” nearly a 40% increase over the year before. With the effects of COVID-19, it's expected that number to jump significantly in 2020.
Shipping, packaging, and delivery are pivotal to the success of any business in today’s marketplace—and this happens to be an area where Amazon FBA not only shines, but thrives.
How Amazon FBA Works
IMAGE: Amazon Prime Delivery Trucks
“You sell it, we ship it” is the hallmark of Amazon’s fulfillment network promise.
Fulfillment by Amazon (FBA) is one of the world’s most advanced networks. It guarantees fast, accurate, and affordable shipping for your customers.
But how does it work for Canadian sellers?
- Send your inventory to Amazon to be stored in one of their fulfillment centres (located in Alberta [2], British Columbia [3], Ontario [5]*, or Québec [1]).
- Once your inventory is in Amazon’s system, you can monitor it through their tracking system.
- Customers can then order your items through an e-commerce platform such as Amazon or your own custom designed Shopify store.
- Amazon picks and packs your item for you.
- Amazon ships your item according to customer specifications and provides tracking information.
- Amazon provides customer and return management for your order.
*Amazon also announced plans to build a second fulfillment centre in Ottawa on June 20, 2020.
How Amazon FBA works with Shopify
You don't have to sell on Amazon to access Amazon FBA services. Amazon has taken their proven delivery system and opened it up to sellers on other e-commerce platforms such as Shopify.
This means that you can sell products through your online store - or Amazon - and have Amazon handle all of the shipping for you.
OR, if you prefer, you can have a mix of your own inventory in your own warehouse and inventory stored at Amazon so that you can draw from different stockpiles of inventory as needed.
Amazon FBA Benefits for Sellers
For a small business, the tedious process of shipping out orders can be a time consuming effort that takes away from your ability to generate more revenue.
“Save time and help grow your business with FBA” is Amazon’s assurance to sellers.
But the benefits to Canadian sellers go even deeper than that. Much deeper in fact.
Here are the most celebrated benefits of joining fulfillment by Amazon:
FBA Benefit #1 - Save on time
“Time is the most important resource in business precisely because it determines everything else,” says entrepreneur.com contributor and high-performance growth marketer, Chris Porteous.
As online shopping increasingly dominates the Canadian marketplace, processing these orders takes valuable time and resources away from businesses.
Amazon FBA gives you the peace of mind of knowing your items are backed by their world-renowned customer service experience, return management policies, and fast shipping experience.
Without having to worry about storing, picking, packaging, or shipping your inventory, your company not only increases capital but reduces time management costs of processing individual orders.
All of this means more time to focus on strengthening and growing your business!
FBA Benefit #2 - Get the most efficient shipping
Amazon FBA is the most efficient delivery and shipping service out there.
With an enormous fulfillment network, Amazon continues to streamline its shipping processes, resulting in the most dynamic shipping model in the world.
They have nearly a dozen fulfillment centres strategically placed through Canada, allowing for the quickest shipping available. They are also partners with Canada’s biggest names in shipping, including Canada Post, Purolator, FedEx, UPS, and DHL express.
All FBA orders are processed in the exact same way that Amazon handles its own merchandise. This standardized shipping allows customers to buy items from your Shopify store, and then let Amazon do the heavy lifting from there—all while providing the fastest shipping experience to your customers.
FBA Benefit #3 - Multi-channel fulfillment
You don’t have to sell through the Amazon marketplace to reap the benefits of Amazon FBA.
Sellers using the Shopify platform or other e-commerce tools can also take advantage of Amazon’s network.
Your customers can enjoy Amazon’s flexible shipping options (free, one-day, two-day, and standard) delivery times.
Amazon FBA, although vertically integrated, is a stand-alone service that Amazon provides to sellers, and is the only way your products can display the Prime badge and gain exclusive access to Prime shipping options.
FBA Benefit #4 - give the best customer service
Another incredibly valuable asset to this fulfillment network is access to Amazon’s famed customer service.
Your buyers can contact Amazon’s customer support by phone, email, or chat 24/7.
When Amazon launched in 1995, their mission was “to be Earth’s most customer-centric company.” Over 25 years later, they continue to set the benchmark in customer service.
With Amazon FBA, your customers are well taken care of—from the time of purchase to item receipt and beyond.
FBA Benefit #5 - access Amazon Prime audience
For items being sold on Amazon, qualified FBA listings are Prime-eligible and displayed with the coveted Prime logo.
With over 150 million paid Prime members worldwide (as of January 2020), and a 29% increase reported in Q2, this is a huge audience.
Partnering with Amazon FBA enables you to reach new and existing customers who are looking for free, one- or two-day shipping, or customers who filter exclusively for Prime-eligible products.
In Canada, the Amazon FBA market is much less intense than south of the border markets because there are simply just fewer sellers. This puts the power in your hands over buyers, leaving you with flexibility in pricing, and giving you the opportunity for potentially higher profit margins as well.
FBA Benefit #6 - Return management
One of the most overwhelming tasks of selling online is processing returns, but it remains an important aspect of an overall successful online experience.
With Amazon FBA, your customers can conveniently return items through Amazon’s Online Return Centre. This way, they receive a consistent customer service experience.
A study by trend tracking firm comScore shows that “95 percent of customers will go back to an online merchant and make additional purchases after a positive return or exchange experience”.
FBA Benefit #7 - No cost receiving and storage
As long as your inventory is selling, with Amazon FBA you can avoid long-term storage fees.
Long-term storage fees apply only to inventory that has been in an Amazon fulfillment centre longer than 365 days.
So if your products are selling, you can save huge on storage throughout the year.
Also, with Amazon FBA, you have access to unlimited storage, no matter the product size tier your inventory falls in.
Why Selling on Amazon FBA is Worth it for Canadian Sellers
Amazon FBA is by far the most cost-effective choice for Canadian sellers, based on the sheer volume of Amazon’s buying power.
By linking your brand to Amazon’s reputation, you gain access to:
- Super-fast delivery
- Return management
- Exceptional customer service
- Access the coveted Prime audience
- Unlimited storage space
- Multi-channel fulfillment
- Easy scalability - be as small or big as you like!
While Amazon FBA is not always the right choice for every business, it's the best choice for companies that are ready to grow.
