Fulfilment by Amazon

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Launched back in 2006, Fulfilment by Amazon (FBA) enables sellers to use Amazon’s own fulfilment infrastructure and offer the same two day delivery service as Prime. By 2017, 5 billion items were shipped with Prime, half of these from 3rd Party sellers. Amazon has just announced that Prime has 100 million subscribers so it’s becoming imperative that sellers can offer Prime delivery for products.

Among Amazon UK marketplace sellers 41% are using FBA to fulfil at least 1 product. In many cases this enables the seller to offer Prime for the product. This greatly increases the chances of their product being purchased.

FBA sellers have 3 options available; European Fulfilment Network (EFN), Multi-Country Inventory (MCI) or Pan-European FBA. The latter launched in 2016 aims to help boost SME exports.

EFN – offer sellers the choice of Amazon EU distribution center to store products & ship to other countries when ordered. Prime is available.

MCI – seller can store products in multiple countries distribution centers & Prime is available when stock is held in the country of order received.

Pan-European FBA – Products sent to sellers European distribution centre of choice and Amazon redistributes products to other countries centers based on demand. Prime is available in all 5 Amazon European Marketplaces.

Fulfilment and price are the two key factors influencing the buy box – the important area where customers can add the product to cart or buy now. Fulfilment by merchants (FBM) can still lead to achieving the buy box for products, but it can take time as Amazon needs proof of seller capabilities through feedback & ratings.

FBA is becoming increasingly important especially among Top Rated Sellers and FBA usage by sellers varies by product categories. For example, 64% of sellers whose main category is electronics use FBA & 51% in the computer category. This is partly due to the lower commission fees for these products.

50% of Home & Kitchen sellers use FBA and 49% of Toys & Games sellers. Fulfilment by Amazon comes with a cost but outsourcing enables sellers to focus on selling and it seems likely more sellers will start to use FBA.

See which Amazon UK Sellers are using FBA or FBM and find out their current ranking position here.

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