Amazon FBA, or Fulfilment by Amazon, is a way for independent suppliers to distribute their goods via the number one retailer. Amazon’s initial business model began in the traditional way, making purchase orders from the supplier whenever product is required. So a conventional supplier/retailer relationship.
The advent of the Amazon Marketplace enabled them to also compete on the same terms as Ebay, with individual sellers placing their products on the site. Effectively, the membership and transaction fees represent a trade of digital real estate rather than moving any goods.
The introduction of Fulfilment by Amazon enables sellers to take advantages of the economies of scale achievable in an Amazon Fulfilment Centre. Instead of the seller dispatching each parcel to individual customers, they send a given number to their designated hub and Amazon fulfil each order as necessary.
However, if your operation relies on more than one retailer to sell your goods, you may need to use a supply chain solution that can work with different formats.
Amazon won’t store more than their demand facilitates, because this would be an inefficient use of their resources. If a seller needs to import and store in bulk, then a secure storage and fulfilment facility is a good option.
How Amazon FBA Works
- Purchase your stock, either as ready finished products or components
- Rework the stock with special Amazon labels
- Send to a UK Amazon Fulfilment Centre
- Amazon sends out each order to customers
- Amazon handles customer service and returns
If you need help with storing, reworking or transporting your Amazon goods, The NX Group can help. Our secure facility in the Midlands is within a few hours drive of all Amazon locations in England and Wales. NX can store large loads and create a solution tailored to your Amazon project.